In 2005, assessors valued the 559-acre Indianapolis Motor Speedway at $34.4 million for property tax purposes. According to
the latest Marion County reassessment, it now has a market value of $170 million. Thousands of other businesses also would
see extraordinary spikes in property values, according to an IBJ analysis of the latest assessment data.
Here’s a political hot potato that so far has received little discussion in the rancorous debate over property-tax reform:
Should the enormous costs of helping impoverished Hoosiers continue to be funded county by county, or spread to taxpayers
statewide?
Many called it “the perfect storm.” But in retrospect, the dark clouds of Indiana’s 2007 property tax crisis had been forming
for years. Legislators caught wind early that something was amiss and spent all spring preparing to weather the impact.
As legislators prepare to overhaul the state’s property-tax system, Marion County’s future hangs in the balance. Indianapolis
residents–particularly in the city’s older, urban core–already pay far higher taxes than their suburban counterparts. And
arguably get less bang for their buck. Changes on the table could make Marion County an even tougher sell.
The art of the deal is to get more than you give up. If Gov. Mitch Daniels convinces the General Assembly to pass his property
tax plan intact, he’ll meet the definition of deal-maker, and then some.
The property-tax reassessment process that Gov. Mitch Daniels ordered last month will take five months and cost up to $3 million.
But don’t expect it to significantly alter the property-tax equation, warns Franklin Township Assessor Becky Williams, who
also serves as president of the Indiana Assessors Association.
When it comes to advertising and marketing, the city’s two tallest skyscrapers are Class A, all the way. But throw out that
notion at tax time. The owners of Chase Tower and OneAmerica Tower–and some of the city’s other large office buildings–have
successfully lobbied for lower building “grades” that save them big bucks on property taxes.
Indiana’s property tax woes are already a headache for Marion County homeowners. Now the cure is becoming a migraine for area
businesses, local elected officials and regional economic developers, too.
Indiana deliberately chose not to invest the tens of millions necessary for technology that could provide an accurate property-tax
forecast. Instead, the state relied on an aging patchwork of property tax software that allows officials only to guess whether
assessed valuations of homes and businesses are correct.
A former head of the Indiana Department of Local Government Finance says some Marion County homeowners soon could see property-tax
increases of as much as 50 percent–far higher than government officials estimated. In part, that’s because of Indiana’s decision
five years ago to abolish the inventory tax.
Taxes on Marion County commercial and industrial properties soon may go up sharply. The Indiana Department of Local Government
Finance, which oversees the state property tax system, has ordered a complete reassessment of the county's commercial
and industrial properties.
Local officials say a new state law that caps property tax bills for homeowners and businesses will send the city into a financial tailspin if legislators don’t modify it in an upcoming session.
