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In spring 2004, new assessments of property values were released in Lake County, Indiana. Changes over time in the uses and market values of land and a new method of assessment mandated by the Indiana Supreme Court caused the assessed value of some properties—especially in the northern portion of the county—to rise by unprecedented amounts. These property assessments were used in calculating property tax bills for the 2002 tax year.
In addition, beginning in the 2002 tax year, state legislation had the effect of shifting a portion of the tax burden from certain industrial taxpayers to the owners of residential and commercial property.The cumulative effect of these changes was that some of the new property tax bills were significantly higher than they had been in the past—in some cases, 700 to 800 percent higher. Some residents and business owners expressed concern that they might lose their properties as a result of the higher taxes.
The subject of what to do about high property taxes—customarily a low-level concern—moved to the front burner. Some observed that the most direct way to reduce taxes would be to reduce local government budgets. Turning this simple proposition into reality, however, is a very complicated and long-term undertaking. In the view of the authors of the studyt, any comprehensive effort to address the challenge of financing local government should be based on credible data and careful analysis, not on simplistic assumptions.This study was based on that principle.
The Study Team
A study team was assembled with expertise in taxation, government finance, economics, and data analysis to carry out the needed research. The team members, who are identified in the Acknowledgments section of the report, were drawn from Partners for Good, LLC (a Gary, Indiana, consulting firm), the Indiana Business Research Center (a unit of Indiana University’s Kelley School of Business), and two units at Indiana University Northwest: the Center for Sustainable Regional Vitality and the Northwest Indiana Local Government Academy.
The Project
The team developed a comprehensive proposal that was presented to the business community, professional organizations, community groups, and local governments in search of funds to carry out the work. The planned research would generate data and comprehensive analyses to guide policy recommendations for consideration by taxpayers and by business and government leaders committed to equitable property taxation.
Newspaper Articles, Report, and Website
As the team pursued its research, early findings were published in a series of twenty articles that appeared in local newspapers, authored principally by Dan Lowery. Several of the articles explored different aspects of local government spending, while the others addressed such topics as tax relief and tax rates.The report that follows presents the ultimate findings and conclusions of the study.
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