Kokomo, Howard County officials in talks with Chrysler about tax payment

ken.delabastide@kokomotribune.com

The door remains open for ongoing talks between local officials and Chrysler Group LLC regarding taxes owed to Howard County.

Unpaid 2009 and 2010 personal property taxes were the focus of a meeting Tuesday that stretched on for several hours.

Included in the meeting were representatives from Howard County, Kokomo, Northwestern and Kokomo-Center Schools, as well as Chrysler Group representatives Brian Glowiak, senior vice president of Regional Government Affairs, and Bill Barrett, property tax manager.

In June, Chrysler Group LLC informed county officials that the company was not responsible for the personal property taxes owed by Chrysler LLC, which filed for bankruptcy in April.

The "new" company paid the real estate taxes due in the spring and will make the November payment of $2.2 million.

The "old" Chrysler owes Howard County taxing units $12.9 million in personal property taxes and penalties this year and will owe an additional $12.3 million in 2010.

"The door is open to us trying to collect all or a part of the taxes owed," said Jamie Shepherd, county assessor.

Shepherd said additional meetings will take place with Chrysler Group, possibly as soon as next week. She described the initial meeting as" fact-finding."

"The goal is to get this resolved as quickly as possible," Howard County attorney Larry Murrell said.

Dick Miller, president of the Howard County Council, said Chrysler Group officials heard clearly from all the taxing units the impact of the non-payment of taxes on government and school operations.

Miller said the Chrysler Group representatives didn't offer to pay any percentage of the taxes.

"We're not authorized to negotiate," Miller said of the tax liability. "We need 100 percent of the taxes paid."

Chrysler Group has an appeal pending to lower the assessed value of the two newest transmission plants opened in Kokomo. The assessed value for the two plants is $106 million, and Chrysler wants that lowered to $55 million.

Shepherd said Chrysler Group wants to finalize the appeal first, or both issues together. She said the majority of the taxes owed is personal property.

Murrell said Glowiak and Barrett are representing the Chrysler Group, but they are also trying to assist Chrysler LLC with the tax issues.

Murrell said no one is able to discover what Chrysler LLC is worth since it went through the bankruptcy process.

"Their position is that the new Chrysler is not responsible for the taxes," he said. "Our position is that they're responsible."

Murrell said the county can lower the tax amount when a company is in bankruptcy but any amount over 75 percent has to be approved by the state.

"Our responsibility is to collect taxes," he said. "We have partnered with all the major stakeholders. If it comes time to settle, we want their blessing.

"We are pulling together and putting aside any differences," Murrell said of the combined efforts of county, city and school officials.

Miller said with the unpaid personal property taxes, the county has several options available to make up the revenue shortfall this year.

One is obtaining a loan from the state of Indiana, a second is requesting an excess levy appeal, and the third is reducing spending.

"We're able to weather the storm for this year," said council member James Papacek.

How the county would handle a revenue shortfall in 2010 because of the unpaid taxes was not as clear, he indicated.

County officials noted the assistance provided to Chrysler LLC in the past via tax abatements for the expansion and upgrading of the local facilities.

Miller said Chrysler officials were informed that both Haynes International and Delphi Corp. have gone through bankruptcy and paid all the taxes.

"Our persistence has paid off," Shepherd said. "We're not going away."