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Clark County v. Indiana Dept. of Local Gov't Fin.

Tax Court of Indiana

June 25, 2014

CLARK COUNTY, INDIANA, Petitioner,
v.
INDIANA DEPARTMENT OF LOCAL GOVERNMENT FINANCE, Respondent

ON APPEAL FROM A FINAL DETERMINATION OF THE DEPARTMENT OF LOCAL GOVERNMENT FINANCE.

ATTORNEYS FOR PETITIONER: C. GREGORY FIFER, APPLEGATE FIFER PULLIAM LLC, Jeffersonville, IN; R. SCOTT LEWIS, ATTORNEY AT LAW, Jeffersonville, IN.

ATTORNEYS FOR RESPONDENT: GREGORY F. ZOELLER, ATTORNEY GENERAL OF INDIANA, JOHN D. SNETHEN, DEPUTY ATTORNEY GENERAL, Indianapolis, IN.

OPINION

Page 1001

WENTWORTH, J.

Clark County, Indiana has challenged the Indiana Department of Local Government Finance's (DLGF) final determination denying its petition for an excess property tax levy for the 2011 budget year. The Court affirms the DLGF's final determination.

FACTS & PROCEDURAL HISTORY

Clark County is located in southern Indiana, directly across the Ohio River from Louisville, Kentucky. Clark County's fiscal governing body is the Clark County Council. See Ind. Code § 36-2-3-2 (2014). The Council is responsible for establishing Clark County's tax rates and for making appropriations from the county treasury. See, e.g., Ind. Code § § 36-2-5-2, -11 (2014).

In 2007, the Council determined it would not levy the maximum amount of property taxes permitted by statute for the 2008 budget year because it had nearly $4 million in a rainy day fund and wanted to " take some of the burden off of the homeowners." (See Cert. Admin. R. at 374-75, 382.) The DLGF advised the Council at that time, however, that such action would negatively impact what Clark County would be able to levy in the future. (See Cert. Admin. R. at 380.) More specifically, the DLGF explained to the Council that if it reduced its levy for 2008, the county's maximum levy in 2009 would be, pursuant to statute, reduced by one-half of the difference between 2008's maximum levy and

Page 1002

actual levy. (See Cert. Admin. R. at 380.) Despite the DLGF's warning, the Council approved a property tax levy for $2.7 million less than what was statutorily allowed in 2008. (See Cert. Admin. R. at 374.)

By 2010, Clark County not only had depleted the cash reserves in its rainy day fund, but also had suffered several unexpected financial expenditures and setbacks. (See Cert. Admin. R. at 12, 375.) Consequently, Clark County attempted to reclaim the property tax revenue the Council previously declined by petitioning the DLGF for permission to impose an excess property tax levy in the amount of $7,206,383 (" levy appeal" ).[1] (See Cert. Admin. R. at 1, 339.) Clark County's petition stated that the DLGF could approve the levy appeal because the Council made a " data error," which was correctable under Indiana Code § 6-1.1-18.5-14, when it failed to consider

the continuing effect of its determination to forego taking $2,754,548 of its allowed maximum property tax levy in order to lower county property taxes for budget year 2008. The effect of that miscalculation, or error, has resulted in a calculated loss of over $5.6 million in property taxes through 2010 and will total more than $7.2 million through 2011 because of the maximum levy formula[.][2]

(Cert. Admin. R. at 12 (footnote added).) On December 22, 2010, the DLGF issued a final determination denying Clark County's levy appeal, stating that " no error occurred, but rather that Clark County intentionally lowered its levy in 2008." [3] (Cert. Admin. R. at 367.)

On February 4, 2011, Clark County initiated this original tax ...


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