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Tuesday, May 11, 2004

Indiana Decisions - More on Lake County reassessment ruling, and impact

The Northwest Indiana (Munster) Times today is filled with stories about the impact of Lake County Superior Court Judge Robert Pete's decision last Friday finding Lake County's reassessment unconstitutional and ordering its treasurer to withhold mailing new tax bills (see this 5/9/04 Indiana Law Blog entry for more background). Here is a sampling:

"Lake County faces uncertain future: Officials look for relief after judge rules new tax bills unconstitutional," available here, discusses how "government officials across the county are scrambling to determine how to keep government -- municipalities, schools, the county and others -- afloat past summer without added tax revenue reaching government coffers. * * * 'Regardless of how you interpret this, by September, all units of government, including schools and municipalities, will be in trouble,' said county attorney John Dull. In Indianapolis, Indiana Attorney General Steve Carter was weighing whether to appeal. Others were watching and considering how they might be involved in facing the traumatic ruling by Judge Pete. For instance, the Indiana Bond Bank began mobilizing a group of lawyers to determine how the state might help keep governments operating in Lake County." More:

In the worst-case scenario, which officials talked about privately on Monday, courts and public safety offices would be closed, schools shuttered, social services suspended, thousands of employees laid off, and government contracts canceled. The county, with its costs making up about 16 percent of any tax bill, has reached its cap for borrowing from Indiana's Bond Bank, according to the county council's financial adviser Dante Rondelli. The county already has borrowed some $97 million and currently is getting its cash flow from insurance reserves.

Although Lake County already has collected more than $47 million in 2003 tax dollars and has another $66 million in property tax replacement dollars coming from the state, that money cannot be touched until the tax rates are set and the lawsuit is resolved, officials said. * * *

[Attorney General] Carter is expected to appeal Pete's decision on behalf of the state, but no officials really know when and if that will happen -- or what the outcome will be. The judge's decision may be overturned quickly on appeal, or it could stand -- taking months or years to wind its way through Indiana's legal system.

Attorney general considers appeals options: Local governments could run out of money if courts don't resolve reassessment suit, official says," available here.
"The state has three options -- including doing nothing, said Staci Schneider, a spokeswoman for Carter's office. The regular route would be the Indiana Appeals Court, which has a 30-day time limit to file an appeal. Or the state could appeal to the Indiana Supreme Court to rule on the jurisdictional issue as a way to speed up the process."
"Treasurer to taxpayers: Stash your money," available here.

"Ruling concerns local assessors: Township assessors believe they'll be responsible for conducting another assessment," avalable here.

"Lawmakers defend outside reassessment: Special legislation common before high court decision last year," available here. Some quotes:

INDIANAPOLIS -- Lake County lawmakers Monday defended a 2001 law hiring an outside firm for property reassessment even though it was struck down as unconstitutional last week.

Lawmakers passed House Bill 1902 three years ago so the state could hire Ohio-based contractor Cole Layer Trumble to perform the reassessment instead of elected township assessors. The intention, lawmakers have said all along, was to ensure the integrity and uniformity of a process that had been plagued by inconsistency and politically motivated underassessment for years. * * *

On Friday, 10 homeowners and the Miller Citizens Corp. successfully challenged the outside reassessment as special or local legislation that the Indiana Supreme Court has since called unlawful.

Special laws apply to only one city or county rather than the whole state, but legislators often get around the prohibition by writing bills that list specific parameters, such as population without naming the city or county. Past examples include riverboat gambling legislation for Lake County and the financial bailout of Porter County after the bankruptcy of Bethlehem Steel.

In January 2003, the Supreme Court ruled against an annexation law that only applied to St. Joseph County. The decision did not invalidate any of the state's 526 special laws, including at least 88 in Lake County, but it threatened all of them by opening the floodgates to lawsuits testing their constitutionality.

"Are we going to strike all those laws and start over?" asked Rep. Bob Kuzman, D-Crown Point. "You want to talk about special legislation, look at the gaming boats."

Note: The case referred to is City of South Bend v. Kimsey, et.al. (Ind.S.Ct. 1/15/03). See Indiana Law Blog discussions here and here. And here are the digest to HEA 1902 from the 2001 session, and House Enrolled Act 1902 itself.

Posted by Marcia Oddi on May 11, 2004 01:11 PM
Posted to Indiana Decisions