TAX NEWS - 2010

Indiana Tax: Supreme Court denies Wendts' petition

LA PORTE — All five Indiana Supreme Court justices voted Friday to deny Long Beach residents Bill and Dalia Wendt's petition to block a settlement in La Porte County's property tax dispute.

According to an order posted on the court's website, motions to reconsider or rehear the petition will not be not allowed.

The Wendts' Indianapolis attorney, Thomas Atherton, said Friday he didn't have anything to say about the ruling yet.

"At this point, we haven't really evaluated what to do or anything," he said. "We got e-mail notification about 2 o'clock my time (1 p.m. central time). So, I'm sorry, but I just can't comment at this point."

La Porte County Attorney Craig Braje had little to say as well.

"I think they have another petition pending, but I think this obviously is a good sign," he said Friday afternoon.

Atherton said he also filed a notice of appeal to the Indiana Supreme Court regarding another tax court case involving Michigan City Area Schools. He said this gives him and his clients another opportunity to appeal in the future, although Atherton couldn't say whether they would do it or not.

In the settlement now upheld by the Supreme Court, all parties except the Wendts agreed to use corrected 2006 retrended assessed property values for the 2006-pay-2007 tax year, subject to further corrections on 5,640 properties. These properties were identified by Crowe Horwath, an independent accounting firm that reviewed the retrended property values presented by Nexus Group. The county also agreed to pay $35,000 of County Assessor Carol McDaniel's legal fees.

The Wendts claimed this will raise property assessments by about 25 percent countywide. Individual assessment appeals would not provide complete relief because, they have said, tax rates were set using faulty 2006 assessment data, which can't be remedied through an assessment appeal of the property's true tax value. Only accurate assessments can distribute tax burdens equally, he said.

The Wendts' petition to the Supreme Court maintained the Tax Court did not have the authority to hear McDaniel's lawsuit against Auditor Craig Hinchman and the Indiana Department of Local Government Finance. McDaniel sued Hinchman based on the auditor's refusal to certify assessed values he considers to be inaccurate and unlawful. The Tax Court upheld McDaniel.

The Wendts also intervened in the case that Michigan City Area Schools and the cities of Michigan City and Long Beach brought against Auditor Craig Hinchman and the Indiana Department of Government Finance. All the parties to that case except the Wendts were part of the settlement that calls for using 2006-pay-2007 assessed values.

The dispute over which assessed valuations to use for computing property taxes has raged for some three years. In the meantime, taxpayers have been sent provisional tax bills, based on earlier assessed values and subject to reconciliation.

The Wendts and some other beach-area property owners found that the 2006-payable-2007 assessments increased their property values substantially, but that was because they had been undervalued previously, the county assessor's office determined.

Most taxing units in the county warned that use of the 2005, not 2006, assessments would leave tax collections significantly below their budgets in previous years, including an $8 million a year shortfall for Michigan City Area Schools.