Assessment mistake will cost East Chicago TAXES : Tax shortfall and state-mandated freeze may jeopardize pay raises
BY BILL DOLAN
bdolan@nwitimes.com 219.662.5328
Date posted online: Friday, January 04, 2008
EAST CHICAGO | The North Township assessor made an error that will result in an estimated $11.5 million shortfall in East Chicago's tax revenue, the assessor confirmed Thursday.
Assessor John Matonovich publicly acknowledged the mistake in a letter released Thursday by his chief deputy, Margot Miller. Miller said Matonovich would have no further comment on the matter.
Sherry Stone, an assistant to Lake County Assessor Paul Karras, said the error apparently occurred when the township's assessment of the ArcelorMittal steel plant was mistakenly entered twice into the county's database under the separate names of Inland and Mittal.
Inland changed its corporate name after merging into ArcelorMittal, the world's largest steelmaker.
Matonovich states in the letter, "As you are aware, a data input error in my office has erroneously produced a $151 million assessment notice, which will result in a $11.5 million shortfall in tax collections for the City of East Chicago.
"I assume full responsibility for the error. I apologize to Mayor Pabey, the elected officials of East Chicago and to the citizens of East Chicago for this gross error."
In the letter, Matonovich also promised added levels of review to ensure similar situation will not reoccur.
James Bennett, a financial consultant for East Chicago, said he is trying to determine the impact of the error but believes Matonovich's multimillion dollar estimate may be too high.
"We don't know all the facts. We are going to have everyone sit down in the same room and figure it out," Bennett said.
Bennett said the city budget already is under stress because of a state-mandated property-tax freeze that will deny $2 million to the city budget this year. He said proposed pay raises for employees may be jeopardized.
Stone said the township assessors have been struggling with the new system of linking property taxes to real estate market values.
Last month, Ross Township Assessor Randall Guernsey said his office is correcting an undervaluation of Westfield Southlake mall, more than doubling the shopping center's tax value to make it right.
And last spring, a vacant lot in East Chicago was mistakenly given a $1.2 billion value because of a clerical error, with a North Township assessor's employee mistaking square feet for acres, the township assessor reported.