Continuously serving Kosciusko County since 1854
INDIANAPOLIS (AP) - State budget officials are reviewing claims by several assessors that the state has made another mistake in how the homestead tax credit is applied.
Kosciusko County Auditor Sue Ann Mitchell said today the error won't affect the provisional tax bills that Kosciusko County residents should begin receiving as early as today. The eight counties affected are counties that have printed and sent out their actual tax bills and in some cases, according to Mitchell, have collected their taxes.
"That is big. That is huge," said Mitchell of the state's mistake. The eight counties affected by the state's mistake include Marion, Hamilton, Howard, Jennings, Monroe, Vanderburgh, Wabash and Wells.
In recent weeks, Marion County officials have complained to Gov. Frank O'Bannon's administration that the credit was not delivering the level of property tax relief the General Assembly promised when overhauling the state tax system.
The homestead credit is a tax break that reduces the bottom line of homeowners' tax bills.
State budget officials said they were reviewing how the credit has been applied. They are scheduled to meet with state and county officials to discuss the issue Friday.
'We are looking at the calculation of the homestead credit as a result of various officials bringing up questions,' Beth Henkel, commissioner of the state's Department of Local Government Finance, told The Indianapolis Star for a story today. 'It seems like there's a basis for concern.'
If state officials acknowledge that an error was made, hundreds of thousands of tax bills in those eight Indiana counties would have to be refigured.
It also would be the second major mistake in how the homestead credit is calculated to be caught this year.
In January, House Democrats searching for ways to plug the state budget deficit uncovered a 17-year error in how the homestead credit was applied to bills. The discovery prompted state officials to issue new guidelines intended to save the state treasury about $280 million.
The money was to come from homeowners' pocketbooks, but local assessors said the homestead fix was costing taxpayers even more.
Upon learning of the possible mistake, the Marion County treasurer's office on Wednesday halted the printing of all tax bills. The office had started printing bills Saturday.
'It's very frustrating,' said Monty Combs, chief deputy treasurer. 'But we want to make sure they are accurate.'
O'Bannon had not been briefed on the situation Wednesday. But a spokesman suggested any adjustments could be made this fall when the second round of tax bills go out.
'It's been a stressful time for everyone involved, especially taxpayers,' said Andrew Stoner, an aide to the governor. 'But we'll keep working on it.'
