One day after the Indiana Department of Local Government Finance put the kibosh on a plan to waive back taxes on multi-family dwellings, the Porter County Council said it may approve an ordinance in a few weeks that would in fact give the county the option to offer amnesty plans to delinquent property taxpayers.

Several County Council members attended Tuesday’s County Commissioner meeting where Commissioner President John Evans, R-North, veered off the agenda to address reaction spurred by County Auditor Robert Wichlinski’s move last week to excuse homestead credit violators from paying back taxes if they corrected their homestead credit records with the auditor’s office. After learning there is no state law that allows counties authority to do that, Evans asked council members and State Rep. Ed Soliday, R-Valparaiso, what can be done to straighten out delinquent tax issues.

“Since this has come up in the last few days, not many of us know what our options are,” said Evans.

Soliday said there is a law just put into place, House Bill 1090, which he co-authored, that allows the county council to grant a one-year moratorium on all interest and penalties on real property, businesses and residencies, owed before Jan. 1, 2012. The taxpayer can have their fees dropped if they are able to pay up all current and back taxes through a payment plan agreed to by the county treasurer by July 1, 2013.

The bill, Soliday said, was based on a system which Lake County already had in place to keep properties from winding up on tax sales in these “terrible economic times” and applied it statewide. Often counties would be stuck with properties they could not sell because the taxes exceeded the actual value of the property, Soliday said.

HB 1090 gives delinquent taxpayers an incentive to settle delinquencies with the county from the last three years, and in turn a way for the county to collect more revenue owed to taxing units. That includes delinquencies from homestead violators.

But Soliday said every county is different in the way they collect revenue which makes the HB 1090 measure “extremely complex.”

County Assessor Jon Snyder said he hopes to reassess as many buildings as possible that have a homestead violation. Multi-unit properties are the most difficult because assessor workers in the field do not have authority go inside and measure the units, he said.

Soliday said he has been in communication with the DLGF hoping it can render an opinion on multi-unit exemptions. He said the law really is intended for “one-two-three-four” places, where 25 percent of a multi-unit property is a residence which receives the homestead credit and the other 75 percent is run as a business and should receives no exemption. A scenario that is not as black-and-white is when “the little old widow rents out a room to a college student,” said Soliday.

The part of the law requiring counties to recoup unpaid taxes is easier to understand. “The law is clear. You must collect the taxes,” Soliday said.

The county has collected over $1.4 million in revenue from homestead violations, Evans said, which has been put into a non-reverting fund in the auditor’s budget. Soliday questioned whether the money should be stored in a non-reverting fund as state lawmakers never anticipated that type of fund accumulating such a large amount.

A few County Council members have posed the same question including Karen Conover, R-3rd, who feels the money should be returned to the taxing units hit hard by the tax caps. “It should be shared,” she said.

Evans said he would like to see the money go into the county’s general fund once the auditor’s expenses are covered. Soliday said he would be interested in drawing up a bill that could accomplish that.

Soliday disputed Auditor Robert Wichlinski’s claim the $120,000 in penalties on homestead violations would go to the state and said the taxes should all go back to the county.

Wichlinski later told the Tribune that the Indiana state auditor’s office does indeed ask that counties give them the penalty fees. A phone call to the Indiana auditor ‘s office for verification was not returned by deadline today.

Council President Dan Whitten, D-at large, said he supports the payment plan option in HB 1090, as did Council member Laura Blaney, D-at large, and they plan to discuss it at the council’s upcoming meeting on May 22. The ordinance would need approval by July 1, Soliday said.

“We will get it on the agenda,” Whitten told the commissioners.

Meanwhile, County Treasurer Mike Bucko said he has no authority to give tax amnesty, but is considering payment plans that make it easier for delinquent taxpayers to catch up on taxes and eliminate the risk of appearing on the list for a sheriff’s sale.

In regards to possible amnesty plans, Bucko said the nature of those would have to be determined by the county council.

Wichlinski noted this morning that HB 1090 is about delinquent tax payments, not homestead violations. Taxes become delinquent once they are not paid for over a year and are subject to auction at a tax sale.

Posted 5/2/2012