The state has determined that Porter County’s assessments used in the most recent 2008 tax bills are justified and that it will not order the county to re-work the data, as favored by some property owners facing huge hikes in their assessed values.

But, in a highly anticipated report released Tuesday, the Indiana Department of Local Government Finance doesn’t completely let Porter County off the hook.

The DLGF is ordering the Porter County Assessor’s office to redo its ratio study that will be used for this year’s tax bills to include residential areas that have been under-assessed or omitted from the county’s original study recently submitted to the state.

The Shorewood Forest subdivision west of Valparaiso is singled out in the DLGF’s report as one residential area that’s under-assessed or omitted in the study.

The DLGF is requiring the assessor’s office to submit the new ratio study by June 1. If the new study doesn’t meet the state’s standards, the DLGF will proceed on its own with re-trending Porter County’s property values needed for the 2009 tax bills.

Further, the DLGF found that the data management and recordkeeping in both the assessor’s and auditor’s offices are “substandard and must be addressed immediately.”

In addition, the DLGF announced that it will conduct the trending of Porter County’s properties for the taxes payable in 2010. Trending is the annual process of adjusting property values based on actual sales; the DLGF will essentially take over this duty of the county assessor’s staff for the 2009 taxes payable in 2010 and will expedite the process. The DLGF has recently announced that it will handle the trending work for neighboring LaPorte County as well.

The DLGF will hold a public meeting Thursday at 6 p.m. at the Harre Student Union in Valparaiso University to discuss its findings.

Porter County’s 2009 tax bills are already projected to go out several months late. Unless it conducts a re-re-trending if the revised ratio study is unsatisfactory, the DLGF’s order that Porter County re-submit its ratio study shouldn’t further delay the tax bills, said DLGF spokesperson Amanda Stanley.

Stanley said the DLGF has not yet reviewed the county’s 2009 ratio study, in part because of delays with the reassessment process in LaPorte County, which has held up setting the tax rates for portions of Pine Township.

Once the county’s new ratio study is approved, the assessor’s office can roll the assessment data to the auditor’s office to prepare the 2009 tax bills.

“There should be no further delay than what already exists,” she said.

The DLGF’s report was prompted by outcry from taxpayers, particularly business owners, who saw their assessed values skyrocket after the county sent out the 2008 property tax bills.

Because of the pending DLGF review, the state and county twice agreed to extend the property tax payment deadline. The final deadline is this Monday.

The DLGF initially determined that the higher values were justified, after finding that the trending process was not conducted properly the year before, for 2006 taxes payable in 2007. But after a heavily attended meeting in March organized by Strongbow’s owner Russ Adams, the DLGF agreed to re-open its review of Porter County’s tax and assessment data, prompting widespread speculation that the state might order a full or partial re-trending of the values used for the 2008 tax bills.

The DLGF decided against that, essentially letting the 2008 tax bills stand. It upheld its earlier finding that the new commercial values are correct, but that the county’s trending was improperly conducted for the tax bills payable in 2007 because not all valid sales were used to arrive at the new assessed values.

Specifically, the DLGF found that three sales from 2005 and one from 2004 were used in the 2007/08 ratio study, but not in the ratio study for the year before.

“Since the sales were eligible to be included in both years, this finding suggests that the tactic of ‘cherry picking,’ or selecting only certain sales, occurred,” the DLGF report says.

The errors with the 2007 tax data were then corrected for the 2008 tax bills, but this resulted in the steep increases that hit property owners all at once instead of spread out over two years.

The DLGF report also says that not all of the sales used in the county’s ratio study can be verified with a hard copy of the sales disclosure forms.

“Poor recordkeeping and data management in the county assessor’s and auditor’s offices prolonged the Department’s review and made this review more difficult,” the report says.

The DLGF said it will provide guidance to the county offices to improve their recordkeeping. It also notes that it has the authority to audit the offices of county assessors and that it will be “pursuing more frequent reviews” of county offices.

The DLGF report also addresses several other topics that the agency studied. One is the assessed values set by the auditor’s office. The DLGF found that the correct values were used for the tax billing, except in a few cases in which the auditor and treasurer have re-issued the tax bills.

The report also notes that property owners have the ability to appeal their assessments. In addition, the state and the county are working on a tax payment installment plan to ease the burden of the higher tax bills.

That installment plan is expected to be discussed at today’s special Porter County Council meeting at 5 p.m.

The state’s full report about Porter County is available online at www.in.gov/dlgf:

Posted 4/8/2009