Trouble in valuing paradise
Admittedly, “reproduction cost minus depreciation” is recognized as a method for determining the “just value” or market value of real property, . . . [h]owever, as the State Board admits, its method of “reproduction cost minus depreciation” is designed to secure “true tax value,” which is unrelated to market value. Because this court holds that the “just value” of real property is its market value, the State Board’s method of calculating “true tax value” cannot withstand constitutional attack. [A] method of cost valuation which does not move towards the goal of securing a just valuation of all property cannot withstand constitutional attack.
Town of St.John v. State Bd. of Tax Comm’rs, 665 N.E.2d 965 (Ind.Tax 1996) (citations ommitted). Over the course of the rest of the 1990’s, the Indiana Supreme Court more or less agreed with judge Fisher, and Indiana was forced into a “market value” system for valuation, implemented as of 2003.
Today we have a report from the Indiana Fiscal Policy Institute on the impact of the new system, which was supposed to bring fairness to the property tax system. The net results: unfairness and chaos. From the Star today:
Despite a massive overhaul of the state’s property tax system, wide disparities remain in 85 percent of Indiana’s counties between what a home is assessed at and what it actually sold for. . . . The disparities mean the owner of a home that would sell for $100,000 might find his home assessed at $80,000, while the owner of another home with the same sale price might find her home assessed at $120,000 — even in the same county or township, said Steven Johnson, a former state senator who is president of the institute.
The study focuses blame for the continued disparities squarely on the township assessors, advocating for the elimination of the township assessor positions, leaving the assessment function to appointed “professionals” at the county government level. That is likely to be a very controversial proposal as it would gore a host of oxen.
