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The Almighty Buck United States

$8M Revenue Shortfall Blamed on Bad DB Entry 220

Posted by CowboyNeal
from the data-integrity dept.
SierraPete writes "Yahoo! News reports that an improper database entry, most likely caused by an external user, has created an $8 Million USD revenue shortfall for a northwestern Indiana county because a house that was supposed to be valued at $121,000 showed a value in the database at $800,000,000. There's no specific suggestion that this erroneous entry was done maliciously, but it is leading to big problems in the local governments as they try to figure out how to drop that much money out of their respective budgets. As an aside, how would you like to be in the homeowner's shoes when he opens up his mail box and finds an $8M property tax bill? I'm sure there was a trip to the emergency room or the dry cleaners involved."
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$8M Revenue Shortfall Blamed on Bad DB Entry

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  • Simple programming? (Score:5, Interesting)

    by Anonymous Coward on Saturday February 11, 2006 @10:49AM (#14694164)
    Do they not have a trap for super low or high amounts, adjusting these traps over the years as values go up or down?

    One would think these simple things are in place.
  • Tax Rate? (Score:3, Interesting)

    by bmoon (721018) on Saturday February 11, 2006 @10:52AM (#14694180)
    That's quite some tax rate... where does an $8M home translate into $8M of revenue for the county?
  • Re:The homeowner (Score:3, Interesting)

    by bheer (633842) <<moc.liamg> <ta> <reehbr>> on Saturday February 11, 2006 @11:09AM (#14694251)
    Good point. Example: $3 Million Comcast Cable Bill [flickr.com].

  • Re:The homeowner (Score:2, Interesting)

    by Anonymous Coward on Saturday February 11, 2006 @11:09AM (#14694252)
    I find it a shame that the government can take away your property if you cannot pay its yearly 'protection' money. Error or not it's sad that the government has such abusive power.

    This confiscatory policy hurts more than you would think. Ask the retired or any fixed income homeowner in areas with a high gentrification rate. If they still can live there of course.

  • by ChaoticCoyote (195677) on Saturday February 11, 2006 @11:34AM (#14694320) Homepage

    The software system is badly designed. Internal verification should have caught such a ridiculous value, producing an audit trail or alert.

    Of course, a human auditor should have been looking at the numbers as well, but the real human error is in failing to create software that recognizes potential problems.

  • Data entry problem (Score:4, Interesting)

    by linebackn (131821) on Saturday February 11, 2006 @11:48AM (#14694369)
    Lippens said the user probably tried to access a real estate record display by pressing R-E-D, but accidentally typed R-E-R, which brought up an assessment program written in 1995. The program is no longer in use, and technology officials did not know it could be accessed.

    And this is why you shouldn't make potentially modifiable live data available to just anyone. And why you need to audit and maintain any such programs very closely, which apparently they didn't. And then you still should audit the data because even an experience user can make a simple typo that throws everything off. Who knows what kind of people they had entering data.

    They indicated this person wasn't supposed to be doing data entry but I get a never ending laugh out of how some folks would rather have every blow joe enter their own data rather than use an experienced data entry clerk. And then those same folks expect the data to be 100% correct!
  • by Anonymous Coward on Saturday February 11, 2006 @11:53AM (#14694394)
    I'd just shrug and make a phone call.

    And be legally stuck with the tax bill, no matter how absurd it is.

    I've been stuck with absurd tax assessments on many occasions. As the manager for a regional wireless data company, I've encountered tax abuse that includes:
    • being assessed a tax on a city-owned water tower: One county in Iowa hit us with a tax for the water tower and its property. When we notified them in writing (registered mail, always - these people will lose your mail and lie in court if you don't if their job depends on not being exposed as incompetent) that we didn't buy any city water towers but instead only had a single $400 antenna on top, connected to a radio down below, they switched gears and hit us with a made-up $20K "improvement value" to the tower. Where'd the $20K number come from? "That's what we figured it outta cost." Yikes, try that with your taxes! We disputed it and took the receipt in for the antenna to show its real cost. They rejected it and told me they have to because they need the tax money.
    • being assessed 10 times the value on property: We bought a 50-year-old tower for $30K. Discovered it was assessed at $300K. Appealed and got it lowered to $90K - not worth fighting in court. Next year, they raised it to $500K by counting all the old horn antennas and pretending they're each making tens of thousands of dollars of revenue (they're all dead and have no waveguide to connect anything). Disupted and rejected - told "we need the tax money" - now we're suing them and costing them thousands in legal fees too.
    • getting hit for use tax: The state of Nebraska sent a tax statement claiming their estimate of a business like ours was over a hundred thousand dollars in online purchases, and issued a tax bill on that made up amount. The only thing we don't buy local is for resale, and is taxed when sold to the customer (and paid to the state). Disputed and rejected again. Probably need the tax money.

    It seriously offends me that we have bureaucrats making laws like Sarbanes Oxley to tell us business people what we can and can't do, while the same government agencies are cooking the books and making up numbers based on their alleged need for more money. Bernie Ebbers is in jail for making higher sales numbers up because he "had to" but when the department of revenue or the IRS does it, its OK.

    My advice is to fight them for every dime. Eventually the local governments learn the lesson. I put up with a false 3x valuation and three times the tax because it wasn't worth the fight - now they're going to end up at the true value and spend three times that amount in legal fees. Only when they realize we're going to fight will they start to clean up their act.
  • by acaben (80896) * <bstanfield @ g m a i l .com> on Saturday February 11, 2006 @12:12PM (#14694473)
    If you refused to overpay, why did the country refund the money you overpaid?
  • Tragic system design (Score:3, Interesting)

    by dbdweeb (598548) on Saturday February 11, 2006 @12:14PM (#14694477)

    A friend of mine was suffering iron toxicity because he took too many iron supplements. He went to the doc to find out what was wrong and went through a battery of tests. A week later he got the report in the mail saying that he had liver cancer. He had a week before his next appointment and started reading up on liver cancer only to find out that it's almost always fatal and it involves a long drawn out time of excruciating suffering before the ultimate demise. So for a week he lived with that knowledge until he went to the doc only to find out that it was a "data entry error."

    It turns out that the code behind the checkbox for liver cancer defaulted to the affirmative and the data entry person had just clicked submit after they complete a separate section of the form. So what programmer bozo would default such a data entry field to yes? Was he/she not thinking or was it sadistic humor?

  • Both Ends (Score:3, Interesting)

    by Karma Farmer (595141) on Saturday February 11, 2006 @01:02PM (#14694748)
    It sounds like the county has multiple databases, and the database available to the public records, and the database used to compute the actual tax bills, were separate databases. And, it sounds like there was a single property valued at $121,000 in one system, and $400,000,000 in the other.

    This is interesting to me, because I suspect I bet the totals in both systems come up pretty close to the same. In other words, I bet there's one property "accidentally" valued at $400,000,000, and a lot of properties "accidentally" valued at $0. Who in the county might actually own one of those accidentally undervalued properties is left as an exercise to the reader.
  • by kimvette (919543) on Saturday February 11, 2006 @01:18PM (#14694840) Homepage Journal
    being assessed 10 times the value on property: We bought a 50-year-old tower for $30K. Discovered it was assessed at $300K. Appealed and got it lowered to $90K - not worth fighting in court. Next year, they raised it to $500K by counting all the old horn antennas and pretending they're each making tens of thousands of dollars of revenue (they're all dead and have no waveguide to connect anything). Disupted and rejected - told "we need the tax money" - now we're suing them and costing them thousands in legal fees too.


    Sue them for:
      - conspiracy
      - fraud
      - abuse of power
      - racketeering

    And hit them up for HUGE punitive damages to double their budget requirements, which will prompt layoffs and turnover of elected and appointed officials because the rest of the citizens in town won't stand for tax increases and cuts in services over this.
  • Validation... (Score:2, Interesting)

    by hotarugari (525375) on Saturday February 11, 2006 @02:08PM (#14695046)
    If their software was smart enough to do validation checks, it would flag things that were outside of the standard deviation per size and area.
  • by Saxophonist (937341) on Saturday February 11, 2006 @05:59PM (#14696116)
    There are several problems with going to a consumption tax as the sole basis for revenue. By consumption tax I think you are referring to what is generally called sales tax where I am. Another poster pointed out (in so many words) that sales tax is regressive. A greater percentage of a poorer person's income goes to sales tax than of a wealthy person's income simply because the poorer person does not save much money and because wealthier people probably spend a greater percentage of their income on services (and real estate!), some or all of which is not subject to sales tax, depending on the state's tax laws. This regression happens (to a lesser degree) even if there are exemptions on basic needs like food.

    Further, property taxes do affect the poor more disproportionately than one might imagine. Often, they do not own real estate, but rent instead. You can be sure that landlords pass along the property tax bills to tenants through their rent. In my state, homeowners qualify for a homestead exemption for their primary residences (limit one per homeowner), which reduces the property tax bill some. Since the poor are more likely to be renting, they do not benefit from the homestead exemption and therefore pay a greater share of taxes.

    It probably looks as though I am arguing for the income tax. In a way, it seems fairest, but the fairness of the income tax system in the U.S. is certainly debatable. Is income tax a good way to fund municipalities? I don't know; it seems like it would cost more for most small- to medium-sized cities to administer than it would be worth. In my state, school districts can charge a surtax that is tacked on to the state income tax bill. The surtax can be up to 20%, but it has to be approved by voters (actually, the school board can pass the surtax, but if enough citizens petition, a vote is required; the vote almost always happens in practice). There are still many problems with the income tax system, but it seems quite preferable to using sales tax for everything.

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