Calumet Township property taxes set to rise, prompting questions, challenge from landowners

Property taxes for many residents of Calumet Township are on track to increase significantly after the 2023 Lake County Land Order recorded property values substantially higher than in previous assessments.

News of the order prompted one of Gary’s largest landowners to bring a formal challenge to state level regulators, who will make a decision on whether to uphold the order later this month.

Lake County Assessor LaTonya Spearman said that the order is the product of new assessment methods aimed at correcting the long-term undervaluation of properties in the area. At a Monday community forum organized by Gary City Councilman Darren Washington, D-At Large, and held at the Gary Public Library, Spearman fielded questions from frustrated landowners who decried the order as excessive.

“I am not here to mislead you in any way or give you any false hope,” Spearman told the crowd of over 100, “there are going to be increases.”

Property taxes, which fund an array of government services provided by counties, townships, municipalities, school districts and other government bodies, are based on the value of a property as determined by the assessor’s office. In Indiana, property assessments are conducted in a four-year cycle, with 25 percent of a county’s properties assessed each year. Properties are assessed using mass appraisal techniques, which use data from an area to determine base property values.

The preferred and most common method of assessment is the sales comparison approach, which uses the amount paid for properties in an area as evidence of the value of similar properties. Through the process of annual adjustment, also called “trending,” property sales data is used to determine if the appraised value of properties should be adjusted to match the market value reflected in nearby recent sales.

Challenges arise, however, in areas with limited sales data, such as Gary. Without adequate sales figures, assessors need to employ alternative assessment methods, including using data from comparable neighborhoods elsewhere or attempting to determine how much a property’s improvements would cost to rebuild.

Unlike in previous years, the 2023 land order was produced by the Lake County Assessor’s office, rather than the Calumet Township Assessor’s office. Spearman said that the decision to take over the 2023 process was made after discussions with the Indiana Department of Local Government Finance (DLGF), which oversees assessments in the state.

“Statutorily it has always been the county assessor’s responsibility,” Spearman told the Post-Tribune. “but, historically, township assessors participated in a way that statute didn’t really call for, and so during the 2022 land order review process and my conversations with the department, I determined that it was in the county’s best interest for me to assume that responsibility to be closer in adherence to the governing statue.”

Lake County is one of just nine Indiana counties with one or more township assessor’s offices. In 2008, the Indiana state legislature gave voters the choice of whether to give sole responsibility over determining the value property and land for tax purposes to county assessors. Subsequent referendums held across the state abolished more than 950 township assessors’ offices.

One key difference between the 2023 process and previous years, Spearman said, has to do with which property sales are included in the analysis.

“The assessing officials review the sales and they determine whether or not those cells are valid or invalid for trending purposes for development of the land order,” she said “And what was happening in Calumet Township is that a lot of those sales were invalidated so as not to skew the number o because of that sales that should have been taken into consideration were not.”

The revised assessment process yielded substantially higher base property values than in previous years. In one neighborhood area that includes lakefront lots in the city’s relatively affluent Miller area, the base rate per front foot increased 101% from $3,531 to $7,100. Two other neighborhood areas in Miller saw increases of 233% and 263%.

Spearman stressed that base rates included in the land order do not represent a complete appraisal of individual parcels, the value of which might be impacted by specific circumstances, and that individuals’ tax liabilities will not increase by the same percentage amount as their appraisals. Though the change in appraisals was dramatic, she said, the figures are accurate, reflecting both an increase in property values and a correction from past assessments.

“The reason you see significant increases is because for a very long time those areas have been undervalued,” she told event attendees. “The land rates are market-driven, and so these aren’t numbers that we’re just pulling out of thin air.”

The substantially higher property taxes portended by the land order have prompted outrage from landowners.

George Rogge, president of the Miller Citizens Corporation, told the Post-Tribune that while property values in his neighborhood have undoubtedly increased, the assessor’s office has overvalued them.

“I don’t think anybody should not agree that it is better now than it was four years,” he said. “but not excessively, not to this extent, and taxation is supposed to be fair and comparable.”

Mary Ann Best, a Gary native who moved back to Miller in the 2010s, said at the meeting that her decision to return was based in large part on Gary’s affordability.

“The community that we have right now that has a very diverse economic range,” Best said. “It’ll destroy that diversity if we’re continuing to increase (taxes) and price people out.”

The land order’s discontents have an opportunity to contest the 2023 land order. Andy Young, a Wadsworth, Illinois resident who owns hundreds of real estate parcels in and around Gary, secured the signatures of 171 Lake County taxpayers on a petition challenging the order that was filed with the DLGF, which oversees tax assessments, earlier this year. The petition triggered a rare review process as prescribed by Indiana law.

The DLGF will host a virtual public hearing on Oct. 10, during which Lake County taxpayers and the assessor will have the opportunity to speak on the land order. The department will accept written testimony via email from taxpayers who signed the petition until 5 p.m. on October 24. After reviewing the testimony, the DLGF will decide whether to uphold, overturn, or modify the land order.

A similar series of events played out last year when Young, along with 191 taxpayers who signed a petition, brought an unsuccessful challenge to the 2022 Lake County Land Order, the first such challenge to be brought in the state.

Young argued that property values had been assessed inconsistently and using outdated information. The DLGF ultimately concluded, however, “that taxpayers submitted no evidence to demonstrate that the Department should modify or disapprove the order.”

Once a land order is approved, landowners can exercise their legal right to appeal their property taxes with the Calumet Township Assessor’s office. Individuals who can provide evidence that their property’s estimated market value is inaccurate or that they are eligible for one or more tax deductions can see their tax liabilities reduced.

Indiana curbs the amount of property tax owed through tax caps which were enshrined in the State Constitution in 2010. State law limits the amount of property taxes owed annually to 1% of property values for owner-occupied properties, 2% for other residential property and farmland, and 3% for all other property.