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County looks to set clock on hospital’s tax abatement

Updated: July 30, 2013 7:49AM



VALPARAISO — Porter County Assessor Jon Snyder said Wednesday he expects an appraisal of Porter Regional Hospital will be complete by late summer or early fall, providing one of the pieces of information the county needs in granting the hospital its tax abatement.

The tax abatement, and where the county and the hospital stand with it, came up during the county council’s meeting Tuesday. The abatement would give the hospital a tax break that diminishes over 10 years.

At issue is when the abatement should have started; county officials say it was supposed to kick in March 1, 2012, the start of last tax year, even though the hospital didn’t open until late August.

Hospital officials don’t want the abatement period to begin until the facility actually opened. Officials with Porter Regional Health have not yet responded to a request for comment from the Post-Tribune.

“Why or why not the abatement didn’t kick in last year, I don’t know,” Snyder said, adding that the facility was 90 percent complete last March, and had an assessed valuation of $34 million. “It did have some value on March 1, 2012, so I think the question is, when does the abatement clock start, and if not, why not?”

County Auditor Bob Wichlinski, who also threw around the clock analogy, said the hospital reaps a greater tax break the more the facility is worth when it comes to sheer dollars. A 30 percent off coupon, for example, will save a shopper more cash on $300 than it will on $3.

“The issue is, when did the clock start,” Wichlinski said, adding the hospital argues that the abatement shouldn’t start until they moved into the new building.

The council granted the abatement to the hospital, at U.S. 6 and Indiana 49, in 2009. Though the abatement is for 10 years, the terms are different for real and personal property, said Vicki Urbanik, the county’s budget and finance specialist.

In its original application for the abatement, Urbanik said hospital officials claimed $20 million in personal property — in this case, information technology equipment — would be eligible for the abatement.

The abatement would grant the hospital a tax break on all of that $20 million the first year, on 90 percent of it the second year, and so on until the hospital paid the full amount of taxes.

The schedule for a 10-year tax abatement on real property under state statute is trickier, Urbanik said, as the percentage fluctuates after the first year.

Further complicating matters is the fact that the resolution the council passed four years ago notes that the council can, with the consent of the hospital, charge an annual fee equal to a percentage of the taxes the hospital would have paid without the abatement or $100,000, whichever is less. The fee would go to promote economic development in the county.

“I cannot tell you when the fee should have kicked in,” Urbanik said.



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