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The Journal Gazette

Wednesday, January 10, 2018 1:00 am

City tax fight to return to court

2016 suit was over fire district issue

MATTHEW LEBLANC | The Journal Gazette

A long-running dispute over millions of dollars in tax money the city of Fort Wayne says it is owed will continue in Allen Superior Court.

That's after the Indiana Supreme Court last week left in place a lower court ruling from August that said the trial court has jurisdiction in a lawsuit the city filed against the Southwest Allen County Fire Protection District and former county Auditor Tera Klutz.

At issue are more than a dozen areas the city annexed in 1987 that the fire district served. Although city firefighters began serving the areas, Klutz continued to direct tax dollars to the fire district.

The city filed a lawsuit in 2016 against the fire district and Klutz, arguing taxes collected from 1987 to 2006 should have gone to the Fort Wayne Fire Department.

John Perlich, a spokesman for the city, estimates the city lost nearly $640,000 in tax revenue each year.

“We want to ensure the proper allocation of property taxes,” he said in an email.

Allen Superior Court Judge Craig Bobay threw out the lawsuit months after it was filed, saying his court did not have jurisdiction. The city appealed the dismissal, and the Indiana Court of Appeals sided with city officials and sent the case back to Allen Superior Court.

No hearings have been scheduled, online court records show.

State Supreme Court justices on Jan. 2 denied transfer of the case, which keeps the appeals court decision in place. Klutz, who was appointed state auditor by Gov. Eric Holcomb last year, states in court documents the dispute centers on taxes and should be decided by the Indiana Tax Court.

Appeals court judges rejected the claim, stating the argument is about which entity is entitled to tax dollars and not a specific portion of state tax law.

“Here, there is no tax law that needs interpreted or applied for the trial court to declare whether the city is entitled to property tax revenue derived from the annexed territories,” the ruling from the appeals court said. 

mleblanc@jg.net