There goes the neighborhood: Misvalued house causes budget problem

VALPARAISO, Ind. -- A house erroneously valued at $400 million is being blamed for budget shortfalls and possible layoffs in municipalities and school districts in northwest Indiana.

An outside user of Porter County's computer system may have triggered the mess by accidentally changing the value of the Valparaiso house, said Sharon Lippens, director of the county's information technologies and service department. The house had been valued at $121,900 before the glitch.

County Treasurer Jim Murphy said the home usually carried about $1,500 in property taxes; this year, it was billed $8 million.

The homeowner, Dennis Charnetzky, declined to comment about the situation on Friday.

Lippens said her agency identified the mistake and told the county auditor's office how to correct it. But the $400 million value ended up on documents that were used to calculate tax rates.

Most local officials did not learn about the mistake until Tuesday, when 18 government taxing units were asked to return a total of $3.1 million of tax money. The city of Valparaiso and the Valparaiso Community School Corp. were asked to return $2.7 million. As a result, the school system has a $200,000 budget shortfall, and the city loses $900,000.

Officials struggled to figure out how the mistake got into the system and how it could have been prevented. City leaders said Thursday the error could cause layoffs and cost-cutting measures.

Lippens said the outside user changed the property value, most likely while trying to access another program while using the county's enhanced access system, which charges users a fee for access to public records that are not otherwise available on the Internet.

The county treasurer said his office spotted the $400 million error after it caused an improper billing, but apparently it wasn't corrected elsewhere.

"It didn't get fixed all the way," Murphy said.