5/4/2017 3:00:00 PM Property tax assessment at center
of issue with County and Belterra
A long running dispute between the county and Belterra Resort Indiana, LLC may result in the county repaying property tax money to the Casino.
At the April meeting of the Switzerland County Council, county officials discussed the situation, which has been going on since 2009. At the center of the controversy has been Belterra's assertion that the property is assessed at a greater value than it should be. The casino contends that if it had been correctly assessed at the lower rate it maintains, then it would not have paid the amount of property taxes that it has - and the county should repay that overrage amount to the corporation.
"They've been disputing their assessed value every year," County Auditor Gayle Rayles said. "We have been working with them all of these years. They've appealed every year, but there is a package of years that was grouped together, and the county has made every effort to settle with them, and nothing came of it. We could not come to an agreement."
At that April meeting of the council, Auditor Rayles told the members of the council that the matter had gone before the Indiana Board of Tax Review, and involved assessed tax years 2009 through 2014. After that hearing, the state board determined what the value of the property should have been assessed at over that six year span.
In essence, the board determined that Belterra had over paid property taxes in three of those years; while the county was correct in the other three years.
"They gave us a value for every year," Rayles said. "Three of the years were higher and three of the years their assessed value was lower than what the state said," Rayles said. "So it is a compromise, a 'We owe you, You owe us' type of deal. So what happens is, with the net, we owe them; which isn't awful, because we really thought this was going to be much higher. The problem is the interest. The interest is all based on state interest rates for refunds, and at one time, that interest rate was nine-percent, so that happened to be a year that we owed them, so that's how that got as high as it is; but it's not nearly as bad as I thought it was."
The end result is that after the findings of the Indiana Board of Tax Review, the county owes Belterra approximately $239,577.40, plus interest. At the April meeting, the council was told that the amount of interest that had accrued was $639,634; but Auditor Rayles said that after consulting with attorneys hired by the county, that the amount of interest and the daily amount of interest that is accruing is much less.
She expects that amount to be confirmed in time for her to present it to the County Council at its upcoming meeting on Wednesday, May 10th, and that the adjustments will be in the county's favor.
"They've been arguing that they have been over assessed since 2009," Rayles said. "At one point, Joanie (Switzerland County Assessor Joan Armstrong) did agree to an adjustment, but that didn't satisfy them. So now what's happened is there's going to be an appeal to that decision."
Currently, Rayles said that Belterra is assessed at approximately $95 million; but that figure is much higher than what Belterra maintains the property should be assessed at, which has a direct impact on the amount of property taxes paid each year - just like an individual property owner when they get their property tax bill.
In the minutes of the April meeting, county attorney Wil Goering said that Belterra maintains that the assessment should be in the area of $45 million.
"Imagine the tax consequence of that going down to $45 million," Rayles said.
At the April meeting, the council directed Rayles to pay Belterra the principle due in order to stop the daily accrual of interest; but that amount has not yet been paid, because there is the possibility that the matter will be appealed to The Indiana Tax Court, and if that happens, the findings of the Court are final.
Rayles said that this is happening at other locations around the state, and stems from the sale of the casino property at Rising Sun. She said that it's not uncommon that county's that have casinos settle with those casinos on this matter; but the situation here with Belterra is highlighted because of the deal that was agreed to with the Rising Sun property.
"They had had some issues up there (Rising Sun) with ownership and where they're located, and the loss of revenue," Rayles said. "Belterra's not experiencing all of that stuff. Maybe the revenue went down a little, but not like it did in Rising Sun, we appreciate that; but they settled for such a huge difference, it wasn't minor. So Belterra just said, 'If they're only worth this, then we're only worth this', and that's unrealistic."
Rayles said that Armstrong has been dealing with this since the tax assessment of 2009, which would have been paid in 2010.
The money that will be paid back to Belterra will initially come out of the county's Rainy Day Fund, but ultimately it will be repaid by the county entities that received those funds. The county will develop a plan for those entities to pay the county back; which means that the County General Fund, the Switzerland County School Corporation, the Switzerland County Health Department, Solid Waste, Mental Health, Cum Bridge Fund, Cum Cap Fund and York Township.
The biggest repayment will come from the school corporation, which is the largest benefactor of property taxes collected by the county.
"If we refunded money to anybody, anybody at all - even you; whoever received the tax benefit to begin with, those people will have a reduction in the amount of taxes they receive at settlement in June and December," Rayles said. "Proportionate to what they receive. So if I reduced your taxes by half, and it costs the county $100, then that $100 would be split among all of the entities that received the money. Everybody who received a piece of that money the first time has to give it back."
Rayles said that because of the size of the settlement, the repayment will probably be broken down across two tax settlements; but that has not yet been specifically approved by the council members.
"The county council realized that it was impractical to ask people for a lot of money back all at one time, especially the schools - they get hit the hardest," Rayles said. "The biggest part of all of this will come out of the schools, not the General Fund or the county, because proportionately the schools get more of our taxes."
Rayles estimated that the settlement will cost the school corporation over $125,000.
"In this case, we're just saying, 'you got tax money in the past that we shouldn't have given you, so we need our money back so we can give them their money back; and they're charging us interest on that money, so you have to pay your part of the interest, too'," she said. "That's the worst part. Giving back money you've got, but giving back money you never got because of the interest, that's a whole other thing, but that is how all refunds work."
This involves property taxes, not the riverboat revenue sharing funds that the county receives.