Lebanon — Some Boone County land owners may pay property taxes on an installment plan.

The Boone County Council voted 4-3 to allow land owners to spread payments over four dates — if state officials approve the proposal — at a special meeting Monday night.

Persons whose property taxes increased 75 percent or more are eligible to apply for installment payment schedules, the council decided.

Council members Jeff Heck, Kerry Kries and Marcia Wilhoite voted against the proposal. Bill Soards, Debbie Shubert, and Butch Smith voted yes, leaving council president Steve Jacob to break the tie.

After a sigh, he voted yes.

There are four exceptions: Persons who have an escrow mortgage; persons who have paid the first installment of their property taxes; anyone who is delinquent in payment, and anyone who put a new building on what had been bare land this year.

Property taxes are usually collected in just two installments — spring in May and fall in November.

The spring tax bills were delayed this year for several reasons.

Those included conflicting interpretations of House Bill 1001, the property tax relief bill passed in March by the Indiana General Assembly and a new way of figuring the additional homestead credit.

Tax bills also increased because the state mandated the use of market value, rather than estimated value, in determining how much a property is worth.

Persons who qualify for the four-installment plan will be allowed to pay 50 percent of their spring installment by Sept. 30; the other 50 percent of the spring installment by Oct. 30, half of the fall payment by Nov. 21 and the other 50 percent by Dec. 22.

Applications for the installment payments are available at the treasurer’s office on the second floor of the Boone County Courthouse. “If they call, we’ll e-mail it to them,” Wilhoite said. She was going to try to have applications posted on the county’s Web site.

Any county property owner who is not in one of the four exclusions is eligible to participate. The application deadline for the spring installment is Oct. 30; the fall installment application deadline is Nov. 21.

The inability of many persons to pay stunning increases in their property taxes was a big concern in prompting the council to take the unusual action, Kries said.

County Treasurer Deanna Willhoite told the council that Friday Cheryl Musgrave, commissioner of the Indiana Department of Local Government Finance, said her agency would approve the installment plan if the county council passed a resolution by midnight Monday.

Retail building owners in Zionsville saw shocking increases in their tax bills this year, in part because property values had been artificially low. Most of downtown Zionsville was excluded in a 2002 reassessment.

“They had been under-assessed for a number of years,” Jacob said. “Then they got whacked.”

Owners of commercial, industrial and agricultural property were the hardest-hit this year, and downtown Zionsville commercial building owners saw their property taxes increase an average of 166 percent, said Michael Shafer, CFO of Zionsville Community Schools. (see related story page A1)

Others saw higher, almost paralyzing, increases in tax bills.

“We could see Main Street ... shutting down if these tax bills were due,” without installment relief, Zionsville Town Council member Michelle Barrett said.

Bob Harris, who owns several commercial buildings in Zionsville, told the council he feared Carmel would poach businesses from Zionsville and from Lebanon if no way was found to ease the tax bill impact.

Harris said the taxable value of a vacant lot between Main and First streets in Zionsville increased from $1,400 to $10,000 this year.

Taxes for the building housing Love Furniture soared from $10,000 to more than $37,000, Harris said.

He, and other commercial building owners, will have to pass increases on to their tenants, Harris said.

Some of those businesses will find it hard to find the extra money in a slumping economy.

“We are absolutely going to lose tenants over this,” Harris said, slapping a podium with his open hand for emphasis.

Harris said the council had to figure out a way for property owners to pay the higher bills without triggering “a mass exodus to Carmel.”

Michael Andreoli, a Zionsville attorney, said people weren’t expecting this jump and weren’t ready to pay the higher bills. He said people may have trouble borrowing money to cover the unexpected expenses.

Credit was difficult to find before the Dow-Jones Industrial average fell more than 770 points Monday, following the failure of Congress to pass a finance package to bail out banks stressed to breaking by bad mortgage debt.

That failure is expected to tighten access to credit harder than before, financial experts have said.

More than 60 persons attended a Sept. 23 meeting in Zionsville demanding action be taken to ease their tax burdens.