Kokomo Tribune; Kokomo, Indiana

August 20, 2009

Chrysler cancels meetings

Automaker owes county $12.9 million in taxes and penalties

By KEN de la BASTIDE

Earlier this month, Howard County officials were optimistic there would be a quick resolution to discussions with Chrysler Group LLC concerning personal property taxes. That optimism has now changed to concern after talks with the automaker appear to have stalled.

Representatives from Chrysler Group LLC met with representatives from Howard County, Kokomo, Kokomo-Center Consolidated Schools and the Northwestern School Corp. on Aug. 4 to try to reach an agreement.

In June, Chrysler Group LLC informed Howard County officials 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.

A second issue in the discussions is an appeal filed by Chrysler Group 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.

Following the Aug. 4 meeting, county officials said additional meetings would take place with Chrysler Group LLC.

Since then Chrysler has canceled two meetings with county officials, including one that was scheduled for Thursday.

“We were assured the number one task was to get this completed,” Howard County Council president Dick Miller said Wednesday.

He said Brian Glowiak, senior vice president of Regional Government Affairs for Chrysler Group, said the company was trying to determine who is authorized to reach an agreement with Howard County.

Glowiak told Miller there is a meeting in Detroit Tuesday that could determine that answer and a meeting could take place in Kokomo by the end of next week. A phone call to Glowiak was not immediately returned.

Miller said Chrysler Group wants to link the reassessment appeal and tax issues together.

“We have agreed to that, we believe that is the way it should be,” Miller said.

Miller said he is concerned because the county council begins work on the 2010 budget next week, and the possible loss of $2 million in tax revenues to the county is important in the budget process.

“I’m concerned about this,” he said. “I hate to say it is a stall; the primary goal from the beginning is to get this resolved.”

Miller said local officials have the authority within the limits of state laws to negotiate with Chrysler Group on the tax issue.

Jamie Shepherd, Howard County assessor, said local officials had hoped the issues would have been resolved before the 2010 budget talks began.

“It directly affects the services we can provide if the money is not received,” she said.

County Treasurer Martha Lake said she was disappointed with the postponing of the Thursday meeting but is still hopeful the issues can be resolved.

“I’ve always respected the way they do business with Howard County,” Lake said. “It would have been nice to know something before the budget hearings. They are crucial to the county’s finances.”

Shepherd said Chrysler Group has failed to provide the requested information on its pending appeal of the assessed value of the two transmission plants.

“I have given them some estimates based on sales, cost and income,” she said. “I’m trying to show them there will be a decrease in future years.”

Miller said Rep. Joe Donnelly, D-2nd District, and Rep. Dan Burton, R-5th District, have been checking regularly on the effort to resolve the issues with Chrysler Group.

“We understand a few delays along the way,” Miller said of the talks.

• Ken de la Bastide is the Kokomo Tribune enterprise editor. He can be reached at (765) 454-8580 or via e-mail at ken.delabastide@kokomotribune.com