Counties, state await ruling
By JEFF PARROTT
South Bend Tribune
EVANSVILLE, Ind. — St. Joseph County and the state of Indiana moved closer Thursday to resolving their long-standing dispute over who should pay for juvenile detention costs by arguing their cases before the Indiana Court of Appeals.
The property tax overhaul bill signed into law this year by Gov. Mitch Daniels shifts those costs to the state, and reduces the county tax levies by which counties raised those funds, effective July 1. But the legal case covers costs incurred in 2003, 2004 and part of 2005.
The county, along with co-plaintiff Marion County, sued the state in 2005 after the state tried to recover $75 million it had spent in operating juvenile detention facilities. The state said Marion County owed it $67 million in arrearage, while St. Joseph County owed more than $7 million.
A Shelby County trial court judge last spring ruled in favor of the state, prompting the counties to appeal.
The state pays to house adults in prison but traditionally has made counties share half the costs of detaining juveniles.
The state constitution declares that “The General Assembly shall provide institutions for the correction and reformation of juvenile offenders.” But the legislature in 1953 enacted a law allowing the state to charge counties for housing juveniles in the Indiana Boys’ and Girls’ Schools.
The counties say that law violated the constitution.
The state argues, among other things, that the counties lack legal standing to sue the state over such a constitutional claim, and that the counties are instead trying to assert the rights of their residents, according to a synopsis of the case provided by the Court of Appeals staff. The counties have standing only to assert rights belonging to the counties as entities, the state argues.
The counties argue they are asserting their own rights because the money for juvenile facilities is paid out of money lawfully belonging to the counties’ treasuries. Because they are financially responsible for paying for juvenile facilities, the counties believe they have demonstrated they are injured by the law, and therefore have standing to argue that the law is unconstitutional and has been misapplied.
But to cover its bases while the case plays out, St. Joseph County has decided to enter into a payment plan with the state. In 2005 the County Council unanimously approved an $8 million bond issue and used the proceeds to pay off its arrearage. The county has tried to keep current on making regular payments since, budgeting $2.1 million for that expense this year, said Cindy Bodle, the county’s chief deputy auditor.
That three-year, $8 million bond issue, which the county will pay off by December, is costing the owner of a $100,000 home, factoring in standard deductions and local/state property tax replacement credits, about $13 a year, Bodle said.
Should the counties win the lawsuit, the state must repay the $8 million to St. Joseph County, along with an undetermined amount of money the county has paid since 2005.
The three-judge appeals panel heard the arguments, limited to 20 minutes by each side, at the University of Southern Indiana in Evansville. The court took the case under advisement and will issue a ruling later.
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