The Howard County Council has hired attorneys to help collect the $24 million the county says Chrysler owes in property taxes.
The legal help has already cost the cash-strapped county hundreds of thousands of dollars. But county officials say they’re taking a worthwhile gamble chasing the property taxes, even if it means a duel with the carmaker in legal spending.
Attorneys representing the automaker have told Papacek and other county officials the corporation is exempt from paying property taxes because the company went through bankruptcy earlier this year. Fellow Councilman Paul Wyman says if the automaker doesn’t pay those taxes, the county’s services, including public safety, will be devastated.
Nineteen percent of Howard County’s total income comes from Chrysler, according to Councilman Jim Papacek.
Wyman says the county is prepared to battle in court to collect the $24 million. He says county officials are unanimous in their decision, even though the county’s finances are suffering.
“You have to make a decision: do you fight or do you not fight? And we’ve made a decision to fight and we’re going to go after every penny that we feel is owed to us,” Wyman said. “I mean, it’s a tremendous impact on the community when you have a major corporation that doesn’t pay its taxes. So we’re going to fight tooth and nail to get that money. But you know, if you choose not to fight and roll over, that sets a precedent for the future.”
When Chrysler officials came to Howard County recently to discuss the issue, Papacek says there was a stalemate. He says county officials were under the impression Chrysler’s emissaries had the authority to make decisions on the matter….
“When they got down here they told us they did not have the authority. Since then we’ve talked to Chrysler a couple of times and they still have not given us the name of anybody that can make some decisions,” Papacek said. “So we’re in a holding pattern right now waiting on them to get back. Have some individuals who can make some decisions, as far as what they’re going to do and when and how.”
Wyman says county officials were encouraged by a recent decision by Delphi – a subsidiary of General Motors — to pay more than $10 million it owes in back taxes. The county borrowed more than that amount from the state in order to pay legal expenses associated with the case.
Delphi will pay in installments, and Wyman says the county will earn interest on the principle and use that money to pay the legal fees associated the Chrysler case.
Papacek says the county’s legal bills are so high because it has hired expensive counsel in an effort to keep up with Chrysler’s high profile legal team.
The ordeal hasn’t permanently soured the relationship with the automaker, but both sides are holding firm to their positions, Papacek says
“We’ve helped them by giving them tax abatements and they’ve also been good corporate citizens. So we’re hoping that they continue to do that. I don’t know if there’s any other county that I’m aware of; I know there’s none other in Indiana where so much of their budget is ended on one big firm like Chrysler,” he said.
County officials anticipate some sort of agreement with Chrysler in the next three to four weeks. The battle with Delphi on a similar issue remained in court for four years.