Evansville Courier & Press staff and wire reports
INDIANAPOLIS - A group of Indiana taxpayers challenged the constitutionality of the state property tax system in a lawsuit filed Thursday.
The petition filed in Indiana Tax Court questions statewide assessment methods, the use of tax abatements and other aspects of the state system. It argues Indiana's tax structure does not comply with a state constitutional requirement for a "uniform and equal rate of property assessment and taxation."
Multiple taxing districts can lead to vastly nonuniform bills for people living in the same county if they are in different school districts or townships, the suit claims.
"This is a statewide issue," said John R. Price, a Carmel, Ind., attorney who filed the lawsuit on behalf of 11 taxpayers and seven taxpayer associations. Price said many of the lawsuit's plaintiffs would like to see property taxes abolished. "This case could ultimately be used to help accelerate that," he said.
The plaintiffs seek to have the suit declared a class action, meaning it could encompass an estimated 2 million residential property owners in the state. Whether class-action status would be granted or not will be up to Judge Thomas G. Fisher, who presides in Indiana Tax Court. Price has requested an emergency hearing.
The 32-page lawsuit (with another 19 pages of exhibits) asks the Tax Court to do several things:
Void the deadline extensions ordered by Gov. Mitch Daniels that would have given counties more time to adopt local-option income taxes. Daniels twice has extended the statutory deadline - from Aug. 1 to Oct. 1 and then to Dec. 31 - to give counties additional time to consider adopting an income tax as a property-tax relief measure. The plaintiffs contend that violated the separation of powers as listed in the state constitution.
Overturn a recent 1.65 percent income-tax increase in Indianapolis because one of the Indianapolis City-County Council members who voted to adopt it was disqualified over his residency. Patrice Abduallah one of 15 votes on the 29-member council that allowed the tax to pass; he had to resign from the council soon after, when it was discovered he did not reside in the district he represented.
Order the Marion County treasurer to issue immediate refunds to Marion County taxpayers who overpaid their taxes before reassessment, rather than waiting five to six months.
Seeking a declaratory judgment, the suit alleges assessors use a flawed and inconsistent methodology.
This is the latest in a series of constitutional challenges to Indiana's property tax system filed over the past decade and a half.
In 1993, a group of Lake County homeowners and the Indiana Civil Liberties Union challenged the constitutionality of the previous "true-tax value" assessment system. In 1996, Fisher agreed and ordered Indiana to adopt fair-market value standards. Six months later, the Indiana Supreme Court sent the case back to Fisher, instructing him to determine whether the property-tax system creates uniform and equal assessments. He ruled it did not.
In 1998, the state Supreme Court reversed Fisher, leaving partially intact the property-tax system, but finding that the way it was administered was unconstitutional. That led to the state issuing new guidelines to assessors to implement a catch-up process called "trending" - to track the change in value of a class of properties over time.
Named as defendants in the lawsuit are the Indiana Department of Local Government Finance, Gov. Mitch Daniels, the consolidated city of Indianapolis-Marion County, Indianapolis Mayor Bart Peterson, the Indianapolis City-County Council and Marion County Treasurer Michael W. Rodman.