Lake County taxing--a case study.

• Author: Marcus, Morton J.

Parcel-level property data for the years 2002 (before assessment) and 2003 (new assessment practices) were analyzed to examine what happened in Lake County to bring about the tax shifts that have been of such great concern in that part of the state (see Figure 1). By examining the county as a whole, (the aggregation of all taxing units in the county) the basic pattern became clear: The small increase in business personal property values shifted more of the taxes to real property, where there was a major increase due to reassessment. Among real property taxpayers, there was a shift from industrial and other taxpayers to residential taxpayers.

Findings

Levies rose by $9.6 million or 1.2 percent. The modest 1.2 percent increase in levies for all governments in Lake County masks significant differences among the various communities. Of the nineteen cities and towns in Lake County, only four had percent changes less than the countywide average of 1.2 percent. These were Gary (0.3 percent), Schneider (-3.3 percent), Whiting (-10.3 percent), and East Chicago (-41.1 percent). All the rest had increases ranging from 3.6 percent in Schererville to 61.6 percent in New Chicago.

Gross assessed value of property rose by $13.5 billion or 97 percent. Although both personal and real property values increased, the balance between the two sectors shifted. GAV for real property rose 127 percent while GAV for personal property increased by only 15 percent. The growth in real property GAV accounted for 96 percent of the increased GAV of the county and the share of real property rose from 74 percent to 85 percent of total GAV. This shift of 11 percentage points in GAV was a prime factor in increasing the share of the tax burden on real property owners, including residential taxpayers (see Figure 2)

[FIGURE 2 OMITTED]

Number of parcels increased by 1,083 or 0.4 percent. Reassessment and economic development together increased the number of parcels in the county. The number of parcels not identified by type of use (unallocated) fell a dramatic 27 percent as those parcels were more properly identified in the reassessment process. At the same time, new housing units on previously identified agricultural land increased the number of residential parcels by 1,513. This change in classification alone causes an apparent shift of taxes to the residential sector.

Gross assessed value of real property rose by $13 billion or 127 percent. The doubling of GAV in the county was...