Home-price appreciation has never happened this fast: A data-entry error on a county computer system in Indiana changed the value of a home to $400 million from its original value of $120,000, according to news reports.
The error led to an erroneous tax bill of about $8 million for the property, and a failure to fully correct the data problem has created a boondoggle for the city, county and area schools that have to pay millions of dollars that should have been collected in taxes but was not.
The Chicago Tribune reported that the city, county and schools “now find themselves in the position of having to return to the county an advance of $3,090,287.33 that was never collected.”
The report states that around October 2004 an unidentified computer user – perhaps a real estate agent or title company employee – may have been checking the value of a property on a county computer system and “apparently tapped the wrong key. Officials figure it was an accident.” The user accessed a restricted screen and changed the value of the property, according to the report.
Another report, published by the Northwest Indiana Times newspaper, states that the value of the home was changed “by an authorized user from a tax company who was in a county computer service that accesses, for a fee, public documents not available on the Web.”
An employee in the county spotted the problem the next day, the Chicago Tribune reported, though in May 2005 the bank that held the home’s escrow account received the flawed tax bill for the improperly valued property and reported the error to the county. The Associated Press reported that the home usually carried a property tax bill of about $1,500
The problem was not fixed, and the error was built into the county’s tax assessment formula. “Budgets were built around the phantom figures,” according to the Chicago Tribune report.
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