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Friday, January 14, 2005

Ind. Decisions - Even more on yesterday's Indiana Supreme Court tax rulings

Several stories today from the NW Indiana papers on the Supreme Court's tax rulings yesterday. The Gary Post Tribune's story is headlined "County wins tax ruling, but MCC group loses." Some quotes:

A citizens crusade to undo the countywide property reassessment was rejected Thursday by the state Supreme Court. The court also ruled in favor of Lake County in its tax fights with BP and U.S. Steel, in rulings local officials hailed as major victories for taxpayers.

In one of four rulings related to Lake County property tax disputes, the court found Lake Superior Court Judge Robert Pete did not have jurisdiction to hear the Miller Citizens Corp.’s challenge to the 2002 reassessment. The court ordered Pete to dismiss the complaint. * * *

In the BP and U.S. Steel findings, the court ruled the industries had failed to follow proper procedure in filing appeals of personal property assessments at the companies in the mid-1990s. The county could have owed BP as much as $80 million if the court found in favor of the oil refinery.

U.S. Steel was seeking $15 million in back taxes, contending local tax officials had illegally lowered the taxes of other property in the district from 1994 to 1996, driving the company’s taxes up. U.S. Steel would not have been eligible to collect its money in the event of a victory, however, as the company agreed to drop the appeal as part of a tax settlement in which the county was paid $53 million.

The court found the 2001 statute that mandated the state Department of Local Government Finance to hire a private firm to reassess 250,000 parcels in Lake County was unconstitutional special legislation. But the majority decision said the state General Assembly fixed the problem in 2004, by passing a “curative” statute allowing the DLGF to take similar steps in other counties.

“(I)n 2004 the General Assembly passed a statute authorizing the assessment conducted pursuant to the 2001 legislation,” Justice Theodore R. Boehm writes in the decision.“This 'curative’ legislation validated the acts taken under the unconstitutional special legislation.”

[Note: Those following the Court's position on special legislation issues may want to read these last two paragraphs again.]

The Munster Times today has two stories on the decisions. This story on the Miller Citizen Corp. decision reports:

The Indiana Supreme Court failed to rescue homeowners who sought respite from steep property taxes with a lawsuit last spring. The state's high court on Thursday threw out the Miller Citizens Corp.'s claim that state legislators and officials unlawfully required an outside firm and the state Department of Local Government Finance to reassess Lake County's property in 2002.

In its 34-page decision, the Supreme Court ruled the county judge who temporarily stopped tax bills from going out in May had no jurisdiction to hear the case. In a split decision, the justices ordered Lake Superior Court Judge Robert Pete to dismiss the residents' lawsuit. * * *

The five justices agreed the 2001 laws requiring an outside firm and the Department of Local Government Finance to conduct the reassessment violated the state constitution's ban on special, or region-specific legislation. They said the General Assembly passed "curative" legislation in 2004 that "validated the acts taken under the unconstitutional special legislation."

In his sole dissent, Justice Robert Rucker said the new legislation was hardly a cure for an old problem. "It is small comfort to these homeowners for the Court to declare in one breath that the challenged statutes constitute unconstitutional special legislation, a proposition with which I agree, and in the next breath declare the functional equivalent of ‘so what,'" Rucker wrote.

Re the U.S. Steel and BP cases, the Times reports:
Property taxpayers in Lake County dodged a $95-million bullet Thursday, after the Indiana Supreme Court rejected two long-standing tax claims by U.S. Steel Corp. and BP's Whiting refinery. U.S. Steel and BP sought $15 million and $80 million, respectively, in tax refunds, county attorney John Dull said.

"This really is a grand slam for us. It really does seem like we are on a roll," Lake County Assessor Paul Karras said. "We have a lot of work to do with our industrial appeals, but this is a big, big plus."

The court's 5-0 rulings do not jeopardize U.S. Steel's $53 million tax settlement with Lake County. * * *

Both corporations had argued that township assessors in the mid-1990s failed to count hundreds of millions in assessed value in Calumet and North townships. They alleged low assessments elsewhere resulted in unfairly high tax bills at U.S. Steel and BP. U.S. Steel attorneys asked for a refund of the property taxes they believed were illegally imposed and overpaid from 1994 to 1996. BP wanted a refund from taxes paid from 1995 to 1998.

Posted by Marcia Oddi on January 14, 2005 12:08 PM
Posted to Ind. Sup.Ct. Decisions