STATEHOUSE—A bill amended by State Rep. Tom Dermody (R-LaPorte) to address the ongoing property tax problems in LaPorte County was signed into law by Gov. Mitch Daniels. With the amendment, Senate Enrolled Act (SEA) 19 establishes taxpayer protections, incentivizes responsible leadership from local officials, and gives the LaPorte County commissioners more control to remedy the situation.
Recently, taxpayers were notified they had a limited amount of time to pay property tax bills from 2007. SEA 19 will give the county council the authority to allow taxpayers 6 months or more to send in their payments or to set up a payment plan. Additionally, the county will be prohibited from placing a property on tax sale for at least one year after the payment deadline. In an effort to encourage prompt payments, for those that can afford to pay immediately the council will have the option of granting a tax credit of up to 2 percent of delayed property taxes if the taxes are paid within 30 days. To make payments easier, the county treasurer will be required to accommodate individuals using a debit or credit card.
SEA 19 also allows taxpayers that are receiving bills for property when they didn’t own it to appeal the assessment. And makes provisions for homeowners to apply for the mortgage deduction for the years when they tax bills were delayed.
“Requiring people to pay a tax bill from five years ago within a short amount of time is completely unreasonable,” said Rep. Dermody. “The taxpayer protections built into this legislation will ensure everyone has adequate time to adjust their budgets.”
Due to lack of property tax revenue, cities, towns, schools, and libraries were forced to take out loans and use taxpayers’ funds to pay the interest on those loans. To encourage county officials to fix the property tax issue in a timely manner, the county will not have to pay a penalty back to local units for borrowing if property tax bills are sent out by January 15, 2013. If not, SEA 19 will require the county to pay $1 million towards the interest. If the bills are still not sent out by February 28, 2013, the county will have to pay $4 million over a period of four years.
Another measure in the legislation will allow the county commissioners to remove the treasurer, auditor and assessor from the property tax collection process and appoint a ‘special master’ to handle the duties. The commissioners will directly oversee the person responsible for property tax collection, ensuring the job is done correctly.
“This issue has plagued LaPorte County residents, local units of government, schools and cities for far too long,” said Rep. Dermody. “It’s difficult to bring jobs and increase economic development when we are unable to tell potential businesses what their tax liability will be. This will allow businesses to see a solution on the horizon.
“Ninety-one other counties send out their property tax bills on time and laying blame is not productive at this point. We need a long-term solution that will remedy our current situation and prevent similar occurrences in the future.”
SEA 19 went into effect upon signature by Gov. Daniels on March 19, 2012.