Sticker shock: Higher tax bills and assessed property value, but why?
ST. JOSEPH COUNTY, Ind. --- Homeowners in South Bend and St. Joseph County are reeling over the aftermath of higher tax bills and assessed property value, claiming sticker shock and confusion.
What is driving the hike and who is to blame?
“My taxes have roughly doubled in the last four or five years, that’s pretty expensive,” South Bend resident Vern Mehler said.
Mehler has lived in the same South Bend neighborhood for decades. Mehler’s latest tax bill brought a 36% hike.
“Shock! Sticker shock. It was like, I knew it was going to be bad,” Mehler said. “I knew they were going to charge me a whole lot more than they said…I knew all of that. But I didn’t prepare for what I got.”
St. Joseph County residents, who have property within the South Bend Schools district, are seeing a higher tax bill because of what was passed on election day.
Voters passed the South Bend Schools referendum back in June with two questions on the ballot—one to be used for expenses and teacher salaries, the other to revamp buildings.
Question one passed with nearly 60% of the vote and question two passed with about 57%.
“You cannot claim the South Bend school board was open and transparent in their way they handled that referendum,” Mehler said. “I think it would be very hard to find a single person to pay what they’re paying in taxes.”
That could be because South Bend Schools used an online calculator to show taxpayers how their bills could change, except it was based off of the 2019 tax year.
“We didn’t want to put a 2020 tax calculator up because the 2020 tax bill was coming out in that year and we didn’t want to cause too much confusion,” SBCSC Chief Financial Officer Kareemah Fowler said. “You know, lead people on to say ‘hey your taxes are going to be this,’ but when they actually get them there’s something else, it’s something else and that’ll cause a lot of confusion.”
Now keep in mind, that is the year many people saw a break in their taxes because of the circuit breaker.
“You have commercial enterprises taxed at 3%, agriculture 2% and then homes at 1%, except for St. Joe County and Lake County was at 3 ½, 2 ½ and 1 ½ and it was all supposed to phase out in 2020, which it did,” St. Joseph County Auditor Michael Hamann said.
“So that’s why we said, we’re asking you to restore that 38 cents for South Bend schools because we need the money,” Fowler explained. “That 38 cents, we lose $12.5 million dollars; so we’re asking you to restore that so we can keep that $12.5 million next year and we’re asking for an additional 2%.”
Still, some taxpayers said they felt blindsided by the sticker price.
“Two-thirds of my increase went directly for the referendum,” Mehler said. “Okay, that’s a big chunk of change. It’s really easy to talk about transparency and openness and physical accountability after you have the money.”
“What I found was that most of the people that call and said ‘hey my taxes went up because the corporation, I don’t understand this, you told us it wouldn’t be that much,’” Fowler said. “Most of the people, when I asked them, did they come on our website and go into the tax calculator and put their information and they said no.”
Fowler said that the corporation could not have been more transparent, holding more than 82 meetings, including forums and providing examples such as the tax calculators, to give taxpayers an idea of what the referendum meant for them.
“We went out into the community, we went to community organizations, I mean, you name it, we were there,” Fowler said.
Still, Mehler believes if taxpayers knew what they do now and the referendum was held now, it would not pass with flying colors.
“My bet is it would be even more extreme than Elkhart came in,” Mehler said. “I think it would be really extreme because I think you’d have a whole lot more people making sure they made it to the polls and making sure they knew when the vote was.”
Now it is not that Mehler does not support the schools.
“I think education is key to the country,” Mehler said. “South Bend has a real problem. They’re fighting an uphill battle. I won’t argue that either, but I don’t have a lot of confidence in their physical responsibility. But you have to be fair. When they started this, they were short of money, they had issues. This couldn’t have been planned. I mean, I can see how that happened, so you have to be reasonable about it.”
Another reason for big tax bills is a hike in assessed property value.
“It’s nationwide, you know, you’re seeing a housing market unlike any I’ve seen in the 24 years I’ve been in the business,” Stewart Realty Broker Allen Stewart said.
“It’s really a seller’s marketplace out there so those sales do affect properties in various ways,” St. Joseph County Assessor Rosemary Mandrici said.
Combining a hot real estate market with a referendum price tag could mean a surprise for taxpayers.
“It’s kind of a perfect storm,” Hamann said. “And that’s where they caught a lot of Indiana, or at least St. Joe County taxpayers off guard a bit.”
“We have over 118,000 parcels in St. Joseph County, so about 4 to 5% annually appeal,” Mandrici said. “The increase last year was 58% overall and went to 62%.”
62% of properties in St. Joseph County are seeing higher assessments, according to Mandrici.
“What assessors do is they assess the entire neighborhood,” Stewart explained. “So they’re going to look at sales and the last six to 12 months that have happened in that neighborhood, so as they’re seeing prices going up, the assessments come up as well.”
“Do I think it’s reasonable?” questioned Mehler. “No, I think it’s crazy, but do I think it’s accurate? Do I think it reflects what the real estate is selling for? Do I think this reflects the world? Yeah, it does. I think that’s fair.”
Any renovations or improvements to your home can increase the property value, but it is not just an individual’s home that goes into the decision.
“But a lot of times the assessments doesn’t really necessarily tie into what you do, but what happens in your entire neighborhood,” Stewart explained. “Those drive those up as well. So you may not have done anything and your tax assessment went up because your neighborhood went up as a whole and you got kind of, drug along with that, unfortunately.”
Stewart said Michiana is a part of the most affordable housing market in the nation, which means this big upsurge could also be seen as a market correction.
If any taxpayer feels like something is wrong with their assessment, there are ways to appeal and fix any errors by looking at your gross assessed value.
“We want the data to be correct, we want the information to be correct and, you know, if there is something that is not correct then we need to be notified of that,” Mandrici said.
Form 11’s were sent out at the end of April for next year’s billing cycle. Taxpayers have until June 15th to appeal.