The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-06-20
$20o,4& Tax Due
From Water Plant
BAvIS EXPOSES TAX D0DCINC PLAN
Board Of Review PoWer|ess to Reassess
For Valuations Which Were Made For
Property in Previous Years

County board of review cannot
make original assessments of property
for taxation for previous years, nor
can current year assessments be in
creased because assessments have
been omitted for previous years"
This law was cited by County Aud
1tor Bowman at the board of review
meeting today as the reason why the
board could not comply with the re-
quest of Alfred Bavis president of the
Richmond board of public works, for
reassessment of the property of the
Richmond City Water Works company
tor previous years.
Mr.. Bavis made the startling state
ment before the board that the water
works company in sworn statements it
had made to the Indiana Public Util
tiles commission to the valuation of
its property, year by year, during its
life, had convicted itself of failing to
list during that period, twenty-siX
years, a total of $9,500. goo of taxable
property, thereby avoiding, during
that period, the payment of 5000, 446
for taxes.
Legal Authority Missing.
Members of the board of review eX
pressed the opinion that if it could act
on its moral right Mr.. Bavis request
could be complied with but that un-
to take such action, citing the statute
quoted above as proof of their con-
tentiOn.
Thursday the Indiana Public It'll
tiles commission in its decision on the
Richmond water rates case placed a
valuation of $750,O0O on the property
of the water work company. In pre-
viOuS years the company has never
listed its property valuation for tax
ing purposes more than S215, 600. al
though in a brief filed with the state
commission it listed its property. for
rate making purposes, at a valuation
OF nearly 81 ,0O0, 900, which incOnSiSt-
ency drew forth Caustic comment from
the commission.
Taxing officials of the county say
that it has for years been customary
to tax property at from fifty to sixty
per cent of its full valuation but the
assessments of the water cOmpany'S
property has been less than that per-
Centage Several years ago Engineer
Maury fixed the valuation Of that cor
poratiOn at over $500, 900, but this had
no Influence in increasing the COM
panN'S assessment.
Board Is PoWerless.
There appears to be no doubt that
the board of review is pOwerless to re-
>
for previous years. as the board CON
tends. If it was vested with such atl-
thOrity it is believed it would now be
in the mood to re-assesS other cOrpOr- !
atiOns believed to be paying too low
taxes.
City Attorney Bond, however. is Of
the opinion that although no action
in the case can be taken by the board
of review, the county assessor. county
auditor and county treasurer can act
in the matter.
He cites the fact that the power to
tax is one Of the sovereign rights of
the state and even though an assess
ment has been formally approved by
the county board Of review and the
state taxing board. the state. should it
ascertain il has been deprived of a full
tax return in any specific instance,
has the right to collect such tax.
Bond Takes Issue.
1t is the custom for corporations to
file with the county board of review
a list of its taxable property. When
such list is approved by the board
the corporation is taxed on this basis.
Nr Bond holds. however, if any tax
ables are omitted by the corporation,
or the statement sworn to is otherwise
untrue then the taxing officers of the
the offending corporation to make full
tax returns.
The state utilities commission, in
its rate decision. allows the water
works six per cent return on its plant
valuation" Mr.. Bond said. but ! do
not believe tn" commission would en-
force this rule should it be detcrm-
ined that the corporation has in pre-
NiOus years evaded paying its full
share of tax and be required to make
a settlement for the same.
ON the other hand. do believe
that in the future if the corporations
assessment is fixed at too high fig
nre it will be injurious rather than
beneficial to the interests of the tax
payers Of Richmond. | mean that if
the corporations tax is fixed at such
a figure as will prevent it earning its
six per cent, then the state commits
sion will permit it to increase its
rates. In its ruling on the water rate
case the commission includes as an
item of fixed charges $4,000 per an
mum for taxes, or not quite half more
than the taxes paid by the company
last year
City's Share S4,e5o.
"If the company is assessed this
year at valuation of $3.50 600 which
is sixty per cent. or the NaluatlOn flN-
ed by the commission, taxes on this
$3.50 900 would amount to $14.310, the
citys share being s4950, or $2,5S5
more than received from this source
last year. But this total tax on a
S450O00 valuation would be S4,310 in
excess of the 900 tax item in the
corporations list of fixed charges.
Possibly that increase might be in
strumental in preventing the company
making its six per cent. return. in
which event it could appeal for rate
increase Personally | do not believe
such a thing would result from in
creasing the company's assessment to
sixty per cent. of its valuation but |
am no familiar enough with this phase
of the case to make any positive state
ment.
II do want to call attention to the
fact however. that this matter should
receive careful attention from the tax