Tax Court reverses denial of Goshen library budget for $60 overage

The Indiana Tax court has reversed a decision that cut a Northern Indiana public library’s funding after it was found to be $60 over budget for the 2018 tax year. The tax court ruled the Department of Local Government Finance abused its discretion in its decision.

In February 2018, the Goshen Public Library appealed a 1782 Notice issued by the Department of Local Government Finance for the library’s 2018 proposed budget. The library’s budget, the DLGF claimed, was not adopted because it exceeded the maximum allowable limit by $60.

As a result, the DLGF reduced the library’s general fund, improvement fund and property tax levy to the prior year’s budget amount. In its appeal, the library contended that the reductions were improper because its 2018 proposed budget contained a correctable error in data. Specifically, the inadvertent adoption of a budget of $3,342,399 rather than a budget of $3,342,339.

The DLGF denied the library’s appeal, arguing that the budget needed to be adopted by the county fiscal body, which never happened. It subsequently certified Elkhart County’s 2018 budget that included final budgets, tax rates, and tax levies for the library and other taxing units within the county.

The Indiana Tax Court reversed in Goshen Public Library of Elkhart County, Indiana v. Department of Local Government Finance of the State of Indiana, 18T-TA-11, ruling in favor of the library upon finding an abuse of discretion by the DLGF.

On appeal, the library argued that the DLGF abused its discretion by inflicting a disproportionate financial consequence on the library when it determined that the library had exceeded the assessed value growth quotient by just $60, a de minimis amount.

“The DLGF has argued that the injury here is the ‘practical consequences’ of the ‘dispute over tens of thousands of local public library budget and levy dollars,’” Judge Martha Blood Wentworth wrote for the court. “Without more, however, higher levy dollars to fund the Library could be viewed as benefit just as easily as harm, particularly in light of the evidence that shows the Library would have received the higher levy but for its inadvertent mistake.

“While the Library did not strictly comply with the statutory requirement in Indiana Code § 6-1.1-17- 20.3(a)(2), its unintentional $60 overage is so insignificant that it substantially complies,” Wentworth continued. “This conclusion is further supported by the significant harm to the Library that the loss of $85,426, a large percentage of its funding, would cause. Finding an abuse of discretion, the Court reverses the DLGF’s final determination on these grounds.”

The case was remanded for the DLGF.