Indiana counties paying for bureau of motor vehicles mistakes

The impact on Daviess County may not be large but it will be felt. The Daviess County Auditor's Office has received notice that the county's refund total will be $126,440.22. Already $36,438.44 has been recaptured. Starting in June of 2015 the amount of excise tax coming to the county will be reduced for two and a half years until the final $90,001.78 is paid. "It is frustrating but we will deal with it," said Daviess County Auditor Gail Doades. "The good news is that they gave us a six months heads up and that gives us time to make adjustments."

Daviess is not the only county in the area that will be dealing with reduced funding through the next two and a half years because of the goof in Indianapolis. The impact in Pike County will be $35,982.74, in Martin $24,806.48, for Knox $116,884.48, Greene $70,421.45 and Dubois $161,710.39.

While the impact in rural southern Indiana may be measured in the thousands in some of the more urban areas in the state the hit will be in the millions. Hamilton County faces excise withholding of almost $1.5 million, Lake County $1.5 million, and Marion County nearly $3.3 million.

Excise taxes do not go all to just the county. Instead they are distributed to various local governmental unit throughout each county. For instance some of the smaller flow will be felt by Daviess County, some by the City of Washington and other towns and all the way down to the township trustees. "Once you get down to the individual taxing units hopefully it's not something that anyone will have trouble dealing with," said government affairs director for the Indiana Association of Counties Andrew Berger, "but that is an individual question because budgets are tight."

In Daviess County that is why the lead time will be important. "The county itself is lucky, " said Doades. This will not be a hardship. There are other units in the  county that do depend on every dollar that comes in so this will have an impact on them. With the six month lead time those taxing units can be thinking about changes to their budgets."

Because of the repeated problems created by the BMV some officials believe that changes may need to be addressed in Indianapolis. Newly elected State Senator Eric Bassler says the mistakes by the agency raises concerns about the effectiveness of government in general and about the credibility of the BMV in particular. "We've got to get it right," said Bassler. "No one expects perfection, but they do expect competence."

The BMV announced the refunds to motorists earlier this fall. Last year the BMV settled a class-action lawsuit that accused the agency of overcharging customers by $30-million. More than 4.5 million Hoosiers were refunded $3.50 to $15 as part of that settlement, but the individual counties were not impacted by that refund.

The problems in the refunds has not completely ended. Another accounting error by the BMV now has the agency asking some drivers to return excessive refunds that received after being overcharged on excise taxes. The agency has overpaid 254 drivers $60,000. The agency cited human error for the latest mistake. "It was caught immediately and addressed," said Gillespie.

The BMV has sent letters to the drivers asking them to return the excessive refund checks or, if they have already cashed them, to send the agency the overpaid amount.

Those mistakes are not readily correctable by the legislature, but lawmaker can have an impact. "Those errors were all made on the administrative side," said Bassler. "It may turn out to be interesting to see how the new legislators will have. We can definitely rattle the BMV's cage. The owe it to the taxpayers and their customers to get it right and if they don't then someone needs to be held accountable."

The Associated Press contributed to this story.