Tippecanoe County’s assessor brought local officials together earlier this year to “raise the alarm” about changes to Indiana tax assessment law that could have a massive impact on the region's revenues.
According to the Tippecanoe County assessor, a change to state law last year would impact how apartment complexes are assessed - significantly lowering taxation rates below the market rate.
Local officials hoped the legislature would take up the issue - but that doesn’t appear to have happened.
Tippecanoe County assessor Eric Grossman said during the most recent session, lawmakers appeared to have locked in the change - instead of working to correct it.
“They did nothing to solve that issue,” he said. “...The solution they found solidified the poor wording that created this mess but they also made it worse by legally precluding the easiest path to a solution.”
Grossman said the Department of Local Government Finance (DLGF) likely doesn’t see the change as a problem.
“We feel like they crossed a line from market assessments into arbitrary assessments for a big part of the county and have left mostly homeowners and certain commercial industrial owners holding the bag,” he said.
But not everyone seems to feel the same way.
Senator Spencer Deery (R-West Lafayette) said the change was being pushed in part by the Indiana Apartment Association. He said the lobbying group seemed to feel that Tippecanoe County had been over-inflating apartment values.
“In their view the county has been taxing more than was the law,” Deery said. “I’m not saying that’s the case, I’m just telling you that’s some of the resistance that’s being encountered there.”
The Indiana Apartment Association did not respond to our request for comment.
Deery said there’s one thing both parties can agree on.
“The cost tables that are used by the DLGF are out of date and that’s a big part of the problem,” he said.
Grossman pushed back on the idea that Tippecanoe County had been over-inflating apartment values.
“I find this absurd that they feel their clients are being over-assessed,” he said. “Their clients haven’t made a single official claim from the Indiana Board of (Tax) Review that says that.”
Grossman points to data on the county website showing that in some cases apartment units remain under assessed in the county.
“I think you can statistically, demonstrably refute the claim that compared to any stretch of market value they have not been systematically over-assessed and in fact the opposite is actually true.”
Grossman believes that the new change cements a flawed tax system in Indiana that is likely to face legal challenges.
“If there isn’t a coherent system and it’s all about your feelings then everyone can feel like they are over assessed,” he said. “We are absolutely set up for a ton of litigation.”
Regardless of what happens, local officials are likely to see tax revenues impacted by the change.
Lafayette Mayor Tony Roswarski said the city has a number of apartments that would be impacted. He said he’s hopeful the Department of Local Government Finance will ultimately update some of its cost tables.
“That should help make a difference in some of the losses we might have,” he said. “It certainly I don’t think will bring us back to par, will bring us back to even…. We’re really just trying to get this fair.”
West Lafayette’s Mayor did not respond to our request for comment.
The Department of Local Government Finance did not respond to our request for comment.
