Officials in Howard County 'optimistic' Chrysler will pay some taxes

ken.delabastide@kokomotribune.com

Local officials said talks with Chrysler Group LLC over the collection of unpaid personal property taxes are moving forward.

Representatives from Howard County, Kokomo, Kokomo-Center and Northwestern schools met Wednesday with Chrysler Group LLC representatives for a second face-to-face meeting to resolve two issues.

Being discussed is $12.9 million in personal property taxes owed for 2009 and $12.3 million owed in 2010, and an appeal filed by Chrysler over the assessed value of Indiana Transmission Plants I and II.

Howard County Council president Dick Miller, the designated spokesman for local officials, said the group is pleased with where the talks are at.

"This is something none of us have been through before," Miller said. "I'm encouraged."

Another meeting with Chrysler Group LLC representatives is imminent, he said.

"They made a proposal," Miller said. "We're looking through the fine print. I have great confidence we are going to get this behind us."

Miller said the unpaid personal property taxes and the assessment appeal continue to be linked, which is how both sides want to proceed.

Howard County's task as required by law is to collect the taxes but the county officials want the other government entities involved in the process, he said.

Miller said there were no "red flags" raised by Kokomo Mayor Greg Goodnight or the superintendents of the two school systems involved in the talks.

He said an option is for the local government entities to borrow the amount of taxes owed from the state.

"There is no alternative other than borrowing the money," Miller said. "I'm open to giving Chrysler a little bit of time to pay the taxes."

The two biggest concerns facing local officials is how to continue operating government, which is borrowing the money and safely believe we're going to get paid back, he said.

"We're close to resolving both points," Miller said. "I'm optimistic we are going to get this done."

Chrysler wants the assessed value of the two plants, which is currently $106 million, lowered. The initial request was to lower the assessed value to $55 million.

County Assessor Jamie Shepherd said additional information was provided at the meeting and Chrysler will continue to provide documentation.

"We're working together to come to an overall agreement on the assessed value," said.

Chrysler LLC, which filed for bankruptcy protection this year, owes the $12.9 personal property taxes due in 2009 and for 2010.

The discussion on payment of those taxes is with the newly formed Chrysler Group LLC, which was formed when the company left bankruptcy with a partnership involving Italian automaker Fiat.

This is the second time local taxing units have had to deal with tax issues as the result of a major employer in Howard County.

Delphi Corp. filed for bankruptcy in 2005. The state allowed local taxing units to borrow money from the Rainy Day Fund at no interest, with the loans to be repaid by 2015.

The New York bankruptcy court signed an order in August requiring payment of the personal property taxes due to the county. Property assessed March 1, 2005, for $4,615,399 must be paid in full by March 1, 2011, with an interest rate to be set by the court.

The real estate taxes for 2005 in the amount of $1,881,860 will be paid over the next seven years, with an interest rate of 5 percent.

General Motors agreed to purchase the Delphi facilities in Kokomo as part of the bankruptcy agreement. GM will be responsible for paying $3,769,193 in personal and real-estate taxes due in November and $7.6 million in taxes due during 2010.