$8M Revenue Shortfall Blamed on Bad DB Entry

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."

The homeowner

[WebHostingGuy]

I think the homeowner probably just laughed. In this day and age when you see a computer generated report which is totally outside the norm you can assume error. Maybe one day in the past someone would have sweat but it seems there are so many errors nowdays (we have accepted a certain level of fault with all things computer) that it just was -- they screwed up again.

If it were my house...

[Murphy's Paradox]

I'd just shrug and make a phone call. Who in there right minds would really believe that they owe anyone $8 million? It is like this woman in England that got a utility bill for some $240 million. There is no way any person even mildly associated with reality would believe these to be legitimate and correct bills.

Read the article yourself...

[expro]

The home was 400 million. The taxes were 8 million.

I know taxes are high there but damn

[Immercenary_2000]

Kind of OT, but as a resident of NW indiana, I can definately say that it's not a place you'd want to be buying a new home. About a year or so ago, Lake County sent out a bunch of appraisers and re-appraised every house in the county. The problem with this was that the people they hired to do it really had no idea knowledge of the area. A lot of people had their tax bills shoot up 100%-300%. The kicker is that a lot of these are in Miller, just a stone's throw away from the murder capital of the world, Gary, IN (Gary got the title back this year because New Orleans was underwater for a chunk of last year). On top of that, Miller really isn't much nicer than Gary.

They didn't notice

[mac123]

If the county doesn't notice a sudden increase of $400 million...nearly half a billion in the grand list (which I'd imagine would be a significant figure), they may have many fundemental issues in the tax assesor's office that need to be addressed.

Time required to catch mistake

[Dan East]

The slashdot story is incorrect - the house was incorrectly valued at $400 million, not $800 million (meaning that the tax rate is double what the story made it appear to be - not 1% but 2%).

According to the article, the real problem was that while the error was caught in a timely manner by the tax people, the bad data had already made it into other systems. Those other instances were never corrected.

I'm curious why those involved with budgeting never questioned why they suddenly had an extra $8 million to play with. Someone more in touch with government and their community should have wondered what was going on.

Also, it seems a lot like counting their chicks before they've hatched. They had already distributed funds that hadn't even been collected yet. If any big player (particularly businesses) were to fail then the same problem would have arisen - funds were distributed and budgeted against that could not be collected.

Dan East

Re:If it were my house...

[Vellmont]

My thoughts exactly. I'd pretty worried if the error was for 50%, or even 100% more than my home value because that might be a major pain to correct. You'd have to get someone to re-assess the value, all kinds of dumb paperwork, etc to prove that there's an error. But a ridiculous error of 660,000% is an easy fix.

Re:They didn't notice

[MindStalker]

More importantly they SPENT the 8 million dollars extra that they probably didn't make the previous year, then say they have to layoff people to correct the problem. In a small town 8 million extra in a year would be big news.

It doesn't have to be that way

[msobkow]

Compared to the effort and expense of doing data range and argument validation, I don't think it's a big deal to have sanity-check warnings in assert-driven code. Just because a field can store a couple dozen digits doesn't mean that a flag shouldn't be raised when you see numbers more than 6-7 digits.

There are already similar checks in business code -- you can't sell a negative quantity at a cash register, you have to do a return. Operating systems make similar checks, asking for confirmation of "dangerous" or unusual situations (like permanently removing data.)

Why wouldn't a financial management/accounting system have similar rules enforced and monitored?

Not surprised...

[alyawn]

One would think that the government officials would have noticed the dramatic increase in their available budget from the previous year. Of course they only saw dollar-signs. Sounds like every other local government I've known. How much do you want to bet that they won't reduce their individual budgets completly below the $8 million overage. Anyone?

Re:Simple programming?

[alyawn]

I doubt it. I'm sure they use Access or Excel as their "DB" implementation.

Stop Blaming the Database!

[Proudrooster]

I get sick and tired of everyone blaming everything on the database. It's not the databases fault people! The programmers that wrote the front end should have done better checking on the data entry. Something like,

if (home=single_family_dwelling AND new_appraisal >= current_appraisal *1.30) then
' Don't UPDATE THE DATABASE and contact data entry employee manager
' Send warning message to data entry operator
else
' Update the Database
endif

This county should spend some time and money looking for other data entry holes. Also, exception and audit reports should probably be implemented as a stop gap. Maybe report on parcels that have appreciated more than 30% and do a manual double check before publishing the tax revenue numbers to the budget office.

And at the risk of repeating myself, "This problem was not caused by the Database! Call it "human error", "programmer error", or "lazy auditors" but calling it a "database entry error" implicates an innocent database doing it's job properly. Thank you, you may now return to Slashdot and STOP BLAMING THE DATABASE!

My thoughts on the story

[Antony-Kyre]

First thing I notice is how much property taxes a cheap $121,900 home would have to pay. That amount doesn't seem progressive, $1,500 in taxes.

Second thing I notice is the spending issues. Didn't the government realize that a lot more tax revenue was coming their way this year than in previous years? Didn't that raise some eyebrows? Shouldn't they be trying to spend less, instead of spending 100% of what they think they will get?

Re:Stop Blaming the Database!

[iggymanz]

when most people speak of "the database", they are talking also talking about the front-end, middleware, back end services and routines, and maybe even the machines that host these things. Just like "the network" is used to mean file, email, internet and print services by most people. Get used to it.

Re:If it were my house...

[kimvette]

Both (informative AND funny) work, because it is obviously in reference to our government, but unfortunately we keep voting the same cretins into state legislatures and into Congress. Our government IS pretty much clueless when it comes to the real world - or they simply just don't give a shit because they're not reliant on social security and have nice fat pensions for life after serving even just ONE term.

Don't assume "troll" when "funny" works.

The sad thing is, many property owners are victim of over-valuation when it comes to property taxes. My business partner's home was just valued at a half million, but there is NO way it would have fetched even $375,000 during the real estate bubble because the lot is undesirable and small. He fought it and won, however so many people over-value their property in their own minds that they don't consider reality and don't catch those errors - and when there is a pattern of reevaluations rising significantly on small lots (even a very nice house on a tiny lot doesn't help resale value all that much) it's obviously intentional and not by accident, because the folks whose paychecks depend on tax revenue keep pushing to increase spending and try to sneak in unnnoticeable tax increases, and rely on people's egos saying "Oh wow, my home is worth a lot. This rocks, this means I have power!" resulting in their not doing a damn thing to hold a crooked system in check.

Re:They didn't notice

[puetzc]

If you had read the article, you would find out that the error was noticed by the County office, and was corrected. Unfortunately, the programming was defective, as the corrections were not properly carried forward into the data that was used to set tax rates.

I don't know about Indiana, but in Iowa, subject to limits, the budgets are set in dollars, and the tax rate is calculated to raise the specified amount. The city didn't necessarily get a real increase in dollars, but now it will see a real decrease due to the error. Bad management - yes, bad programming - worse.

Re:property tax system

[jombee]

I'm not certain about your situation, but as for me, I think my local property taxes are about the most fair and well-used taxes I pay. What I pay each year in property taxes is much more meaningful to me, my family, and my community compared to what I pay per WEEK in federal taxes.

My current property tax is ~1% (was ~2% before a primary residence credit) of the value of my land and home. Of that tax >50% pays for the local school system, ~20% for firefighting and police protection, and the remainder goes to the local library, roads, parks, and government offices. Honestly, I'd be willing to pay more if it was used for an even better library, well maintained roads/sidewalks, parks, more teachers, firefighters, and policemen/women. I've known many teachers, firefighters, park rangers, and members of the police force... I have no doubt that they all deserve more money/equipment for the outstanding work they perform for my community.

Not long ago, the local library proposed an expansion project and was voted down because property-owners were in uproar about the 34-cent property tax increase/year. Apparently the public held similar principles as you... it seems a pittance to me. Hell, in comparison, I'd pay an extra $5/year (or more) if it meant the firefighters/police could get to my property faster with better equipment to save my family or my neighbors life in an emergency!

IMHO, property taxes are not the first place to start when trying to reduce the public's tax burden. Look anywere else.

= jombee

Re:Similar thing happened to me once

[Anonymous Coward]

Wait, you bought a house for x, then it was reassessed at x+$100,000. So if you'd immediately sold the house you'd be $100,000 richer... and you argued against this?

Not Blaming the Database!

[brown-eyed slug]

calling it a "database entry error" implicates an innocent database doing it's job properly

No it doesn't. It suggests that there is an error in a database entry.