The Indiana Department of Local Government Finance doesn’t expect to complete its review of Porter County’s assessment and tax data until sometime later this week at the earliest.

In the meantime, taxpayers who haven’t yet paid their 2007 payable ‘08 property tax still have through this Friday to pay their bill. The original tax deadline was March 13, but an extension was granted due to the state’s review.

The DLGF is conducting a comprehensive review to see if errors were made in Porter County’s most recent tax bills. The state’s review comes in response to outcry from business owners and others who saw huge increases in their assessed values, which in turn caused some tax bills to skyrocket.

One possible outcome is that the state could find that the new values are correct. On the other hand, it could order a full or partial reassessment in Porter County, a process that could result in all new values and new tax bills.

DLGF spokesperson Mary Jane Michalak said the DLGF is reviewing hard copies of sales disclosure forms, a process that is taking longer than originally anticipated.

The DLGF is also reviewing the certified assessed values that the county submitted to the state to make sure that what was billed matches with what the DLGF approved in the county’s ratio study, which was the basis for setting the new assessed values.

The DLGF initially determined earlier this month that the new assessed values were justified, but agreed to reopen its review of Porter County’s data at the urging of State Rep. Ed Soliday, R-Valparaiso.

“I did weigh in,” Soliday said. At first, he said, the DLGF was under the impression that the problems dealt with only a few disgruntled business owners in Valparaiso. He said that once the DLGF Commissioner learned that the unusually high assessments occurred countywide, the agency agreed to take a closer look.

Soliday predicted last week that with each passing day, there is a “much higher probability” that the DLGF will order a reassessment, just as it has done in several other counties.

He said some areas may have been properly assessed while others were not and that it will be important to have fair assessed values across-the-board, particularly because of the upcoming state tax caps.

The tax caps are directly tied to property’s assessed value. Property taxes for businesses, for example, will be capped at 3 percent of the property’s assessed value. So if a business AV goes up, so too does the cap.

One issue prompting scrutiny is that only one commercial sale from 2005 was used to set the values for Valparaiso in Center Township for taxes payable in 2007, while five sales from ‘05 were used for the following year.

Because more 2005 sales were used in the second of those two years, the DLGF has said that Porter County’s trending process might not have been properly applied for the tax bills payable in 2007. The DLGF has said that it would have expected to see more adjustments in the assessed values on the ‘07 tax bills than those issued for last year.

Soliday raised a few other concerns with Porter County’s data. He said it appears that an income method for rental properties may have been used, but that no one has been able to identify rental owners who said that they supplied income information.

Beth Henkel, the former DLGF commissioner who was retained last year to help correct longstanding problems with Porter County’s tax data, said the DLGF has ordered reassessments in other counties where there were very few sales used to set the values.

Henkel agreed with the sentiments expressed by others that trending is probably not the best tool for annually adjusting values; she instead voiced a preference for rolling reassessments, in which assessors conduct onsite inspections of property on an ongoing basis.

However, she also said that several other states have trending, and that the process is supposed to bring the values close to market conditions. If property owners disagree, the appeal process provides the remedy.

Henkel was cool to the idea of a full-blown reassessment.

She cited the situation facing Marian County, which was one of several counties ordered to go through a reassessment in 2007. The county’s tax bills that normally would have been gone out in May of 2008 are not expected to go out until this June or July. Henkel estimated that the borrowing costs for local units of government have soared to as much as $30 to $40 million.

The delayed tax bills are so bad in Marian County that it’s now projected that there will be three tax bill installments in 2010.

“The remedy of reassessment is the last resort,” she said. “Delay doesn’t help anyone.”

Posted 3/24/2009