County auditor responds to state's $200M tax mistake

PLYMOUTH — Thanks to an alleged “programming error” at the Indiana Department of Revenue, Marshall County is being reimbursed today for money it should have received over the last two years, in the tune of $1.4 million. Although the amount is not as dramatic as other Indiana counties — Marion County, for example, will be reimbursed $33 million — it’s all relative when the county population is taken into consideration, said Marshall County auditor Penny Lukenbill.
“The $1.4 million to us means as much as the $33 million does for Marion County,” said Lukenbill.
Lukenbill said that the money isn’t extra funds for the county — it’s funds that were rightfully theirs all along.
“It was actually our own money, that was supposed to come back to us,” said Lukenbill. “One percent of local income tax (should) come back to the county. In 2004, we added an additional quarter percent to that, to pay for the jail construction.”
She continued, adding that the funds being reimbursed by the state are those tax percentages from 2011 and 2012, plus interest. County officials were not aware of the discrepancy because the state gives them a projected number as to how much money they will be receiving each year. They now know that in 2010 and 2011, the projected amounts presented by the state were off significantly.
Because of conservative financial planning by Marshall County officials, Lukenbill said that county departments probably did not go without because of the error. However, she said that the effect the situation might have on future tax rates is still being determined.
“Mistakes happen, we realize that,” said Lukenbill. “But this is an egregious error that has shortchanged a lot of county budgets. When you trust a government agency to collect your taxes and pay them back to whom they belong (this situation) is disconcerting.”
Usually, “extra” money received by the county would go into the rainy day fund. But in this situation, Lukenbill said that it’s unclear as to whether or not the money can be spent.
“We are still in the process of getting direction from the state as to how we are going to account for this,” said Lukenbill.