ANDERSON — For the second consecutive year, the Madison County Council will conduct budget hearings for the 2009 fiscal year before its 2008 budget is approved by the state.

As Tuesday’s regular meeting of the County Council started, President John Bostic started the meeting by saying, “There’s no new money. Anything that has to do with new money will have to come back when we get new money.”

With no relief in sight, these words were no surprise to department heads in the county, some of whom have waited since January for employee raises, new supplies and other needs not included in the original budget.

Last year, the 2007 budget was not approved by the state until October, when the deadline for approval is Feb. 15, said Patty Mauck, first deputy auditor. The county is more than five months behind in having an approved budget for 2008, and it is already behind for the 2009 budget, according to Mary Jane Michalak, director of communications from the Indiana Department of Local Government Finance, or DLGF.

The reason for the delay sits somewhere between the state’s constantly-changing requirements to align property identification numbers and the county’s inability to meet those requirements, Mauck and Michalak both said.

“The way a property-tax system works is like a machine,” Michalak said. “So one step has to happen before another step. If there is a delay in one part of that process, there’s a domino effect.”

For Madison County, the delay started early in the 2007 budget process, when county assessor Tom Broderick Sr. passed away. There were also data software problems.

“So here we are, in the first step, and there are already some delays,” Michalak said.

In regards to the 2008 budget, the delay started in the first step of the six-step process.

According to Michalak, the county assessor should have sent all the sales data, which are example properties that are used to indicate the value of a property that is being assessed or appraised, to the DLGF by March 1, 2007, for the 2008 budget.

Then the ratio study, which is a comparison between the sales data and assessed values in the county, should have been submitted to the state sometime in May or June 2007, Michalak said. The ratio study is done to ensure the market values are being used to determine the assessed values, she added.

Madison County did not turn in its ratio study until March 11, 2008, a month after the entire 2008 budget should have been approved by the state.

Cheryl Heath, county assessor, said the office got a late start on the study because of changes required by the DLGF.

Once the DLGF approves the ratio study, the assessor sends the county’s gross assessed values to the auditor. The gross assessed values are the values of a property before tax abatements, deductions and exemptions are applied, Michalak said. The auditor should receive these numbers by July 1.

Mauck said the auditor’s office had yet to receive the gross assessed values from the assessor’s office.

“We’re pretty much caught up,” Heath said on Monday. “We just have got to get the figures down to them. We’re just so busy. (The state) has just put so much on us, and there’s only eight of us in here.”

On Aug. 1, of the year prior to billing, the auditor should submit certified assessed values, including exemptions, deductions and abatements to the state.

However, Michalak said, counties often are late in this stage because four weeks is not enough time to apply necessary information.

Once the information is provided to the DLGF, it can begin processing the county’s budget and calculating preliminary rates. There is a two-week window for units to comment on the rates and correct information.

After those two weeks, the DLGF holds public budget hearings for anyone wanting to comment on the rates. This typically happens around October, Michalak said. After the public hearings, depending on what actions are taken, the DLGF can issue a final budget within days, Michalak said.

If Madison County were to submit its information to the state within the next two weeks, the state could possibly have the budget set before the county council begins 2009 budget hearings, Michalak said.

Mauck said she did not expect to have everything ready within the next two weeks.

“It’s possible, but I don’t think it will happen,” she said.

So far this year, the county government has borrowed $4,494,718 from the Indiana Bond Bank to make up for the lack of funds. However, Mauck said, this is not an abnormal amount compared to years past.

“It all started in ’03,” she said. “That was the first year we’ve ever borrowed, and we’ve never been on time since.”

Because the 2008 budget has not been approved, the county council has not approved any new appropriations for any department in the county government.

This has caused problems in several departments, such as the clerk’s office.

“I’ve been around in politics in the courthouse for 30 years, and this office is one of the busiest in the building,” said Ludy Watkins, Madison County clerk.

In February, Watkins requested raises for some of her employees so they could be paid the same as others in the office who are partially paid with state funds.

“One way that it’s affecting us is we’ve lost employees from the office to other offices because they are paid more,” said Becky Gary, chief deputy clerk.

Employees quit and go to other departments, such as the prosecutor’s office or the auditor’s office, because positions in those offices make more money, Watkins said, “I don’t blame them.”

When employees leave, “that backs up everything,” Gary said. “And we’ve got to pull other people off of their specific jobs to help.”

The clerk’s office is not alone. Juvenile court, the sheriff, emergency management, the election division, the commissioners, the drainage board and soil and water have all had requests tabled since as early as January because of the delay.

The delay does not only affect county government. It affects all taxing units in the county including the library, schools and municipalities, Mauck said.

“One thing that is going to make it hard is that the council has to review all the other taxing unit’s budgets because of the new law,” she said, referring to the property tax reform bill. “It’s going to be hard for the county council to review their budgets if they don’t have a 2008 budget to compare to, so they have to base it on a 2007 budget.”

The delay also pushes back the ability for the county to send out property tax bills that have the final figures on them. The bills collected on July 10, for example, were provisional and were based on the 2007 data.

Robert Marsh, former president of the Madison County Taxpayers Association, said property taxes were a burden in general for many people, including low income and retired people.

“It’s an archaic way to get money, but I’d hate to have a job to make it fair,” Marsh said. “If you’re in county government, let’s say the courts or whoever, if you’re spending money, how do you know how much to spend?”

Marsh said he blamed both the county and the state for the problems.

“The changes that were made were probably a whole new ballgame for (the county), and sometimes the state didn’t certify the tax rates soon enough for (the county) to get them out on time,” the Jackson Township resident said. “I don’t know if you can blame anybody or if you can blame everybody that’s associated with it.”

Currently, 55 out of 92 counties in the state have approved 2008 budgets. This includes Henry, Hamilton, Hancock, Tipton and Grant counties, which surround Madison County. Thirteen other counties in the state sit on the same step as Madison County, Michalak said.

“Every county has experienced problems,” she said. The first budget to be approved was on April 24, 2008, for Vanderburgh County.

However, Michalak said, the state is working to cut down the problems.

“Every county is sending out late tax bills this year, and in many cases it is a result of delays in trending,” she said. “The new system was implemented last year, so there is a learning curve involved.”

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Amount of money borrowed from the Indiana Bond Bank by the county each year:

2003: $9.4 million

2004: $5.8 million

2005: $7.7 million

2006: $4.2 million

2007: $10.7 million

So far in 2008: $4.5 million