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$8M Revenue Shortfall Blamed on Bad DB Entry

CowboyNeal posted more than 8 years ago | from the data-integrity dept.

The Almighty Buck 220

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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Yes, but there is good news (-1, Offtopic)

Anonymous Coward | more than 8 years ago | (#14694149)

They just saved a lot of money on car insurance.

Re:Yes, but there is good news (1)

catwh0re (540371) | more than 8 years ago | (#14694618)

since when was $800,000,000 $8M?

How about being 100x off the mark.

Re:Yes, but there is good news (1)

Loconut1389 (455297) | more than 8 years ago | (#14694647)

Article says house was listed at 400,000,000, summary says 800,000,000. Apparently property tax is 2% -> 400,000,000 * 0.02 = 8M

Article says $8M tax.

So basically, the city was expecting to get another $8M that they now wont.

Re:Yes, but there is good news (0)

Anonymous Coward | more than 8 years ago | (#14694684)

The home's VALUE was $800M (actually $400M in the article)
The TAX on the home was $8M.

That means that there's a tax rate of 1% (or 2% if you RTFA and get the home's price right.)

The homeowner (4, Insightful)

WebHostingGuy (825421) | more than 8 years ago | (#14694153)

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.

Re:The homeowner (3, Interesting)

bheer (633842) | more than 8 years ago | (#14694251)

Good point. Example: $3 Million Comcast Cable Bill [flickr.com] .

Re:The homeowner (4, Funny)

FidelCatsro (861135) | more than 8 years ago | (#14694457)

Yeah nobody would believe that one , unless Comcast had reduced their prices recently

Re:The homeowner (2, Informative)

The-Bus (138060) | more than 8 years ago | (#14694517)

No... those are just their current regular charges for cable and internet. I should know, I'm a Comcast victim (customer).

Re:The homeowner (2, Interesting)

Anonymous Coward | more than 8 years ago | (#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.

Re:The homeowner (0)

Anonymous Coward | more than 8 years ago | (#14694761)

Property taxes pay for public schools. Should we just tax working people, or include those that have land property?

I think that we should tax property. You live on the societies land, and you pay society for that priveledge. You can do what you want with it to an extent, as long as what you pay reflects the value.

Its the little socialist things that make this country work. It doesn't work as well as we might want, but if we want to complain we'll have to find an alternative.

It doesn't have to be that way (4, Insightful)

msobkow (48369) | more than 8 years ago | (#14694324)

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?

Re:It doesn't have to be that way (1)

plopez (54068) | more than 8 years ago | (#14694710)

Why wouldn't a financial management/accounting system have similar rules enforced and monitored?
Because most of the DB monkeys/req. analysts/programmers hired are clueless. We are currently looking for a DBA/Data modeler and when you talk about data integrity in an interview many of them get the 'deer in the headlights' look in their eyes.

Re:It doesn't have to be that way (1)

timeOday (582209) | more than 8 years ago | (#14694870)

Agreed. On the other hand, it's all too easy to ridicule a bug after it's discovered.

Re:It doesn't have to be that way (stock trading) (1)

mikael (484) | more than 8 years ago | (#14694874)

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

That's one issue I can't understand - there have been several stories reported recently where traders mixed up the number and price of the shares they were trading:

Traders typing error costs Japanese brokerage firm millions [www.cbc.ca]

You would think it would be possible for the system to check the selling price against the current going price.

Re:The homeowner (1)

remmelt (837671) | more than 8 years ago | (#14694635)

Isn't it strange that we now talk about "computer generated reports" with a lot of disdain, almost assuming error by default, shrugging it off, while the good old human made reports are potentially much more prone to error? Isn't that why we went to automated systems in the first place?

I guess it's still the human factor though, like here, a mistake in the database, and the laziness of trusting computers to be right, all the time. No checks or double checks.

If it were my house... (5, Insightful)

Murphy's Paradox (585454) | more than 8 years ago | (#14694154)

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.

Re:If it were my house... (0)

Anonymous Coward | more than 8 years ago | (#14694202)

RTFA - The city/county Treasurer's Office WAS notified of, and corrected, the error in their systems, but this correction did not propagate to whatever systems the Revenue & Taxation and Budget & Planning folks used. Poor, poor design.

Re:If it were my house... (3, Funny)

MrWa (144753) | more than 8 years ago | (#14694256)

Have you interacted with real people in the US anytime in the last 6 years? Very few people seem to be mildly associated with reality...

Re:If it were my house... (0, Offtopic)

gears5665 (699068) | more than 8 years ago | (#14694500)

informative?! can't we say troll? come on folks

Re:If it were my house... (2, Insightful)

kimvette (919543) | more than 8 years ago | (#14694805)

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:If it were my house... (4, Insightful)

Vellmont (569020) | more than 8 years ago | (#14694258)

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:If it were my house... (1)

kimvette (919543) | more than 8 years ago | (#14694819)

That may be true except when the town officials think that your property that just happens to be next to Wal*Mart is a better use for the town if it could add more parking spaces so that you can have a WallyWorld StinkyCenter in town rather than a regular Wallyworld - then your property value could increase by 2x-3x and you have no way to fight it - and when they take it via eminent domain, they will reassess the value to below actual market value.

Re:What's worse (1)

symbolic (11752) | more than 8 years ago | (#14694288)

Is that there are systems that don't have the means to verify such "out-of-the-norm" transactions by presenting an alert of some kind.

Re:If it were my house... (3, Interesting)

Anonymous Coward | more than 8 years ago | (#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.

Re:If it were my house... (3, Interesting)

kimvette (919543) | more than 8 years ago | (#14694840)

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.

Did you even read the article? (1)

porkThreeWays (895269) | more than 8 years ago | (#14694603)

It's such a short article, please read it...

There's no mention of the home owner getting pissed off. The problem is, they assumed they were getting 8 million dollars in property taxes they weren't. They planned their budget around this and now many departments are being told to give money back. Some departments are saying to accomidate giving money back, they might have to do some lay-offs.

They think that the mistake was made on a public terminal for public information lookups. A typo of a similarly named program that hadn't been in use for years came up and allowed this un-authorized person to make the change. They don't think it was intentionally malicious.

Re:Did you even read the article? (0)

Anonymous Coward | more than 8 years ago | (#14694743)

Did you even read the parent comment or the article summary?

It's such a short comment, please read it...
It's such a short summary, please read it...

There's no mention of the home owner getting pissed off.

So what are you commenting on?

Simple programming? (5, Interesting)

Anonymous Coward | more than 8 years ago | (#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.

Re:Simple programming? (1)

Lehk228 (705449) | more than 8 years ago | (#14694330)

set the trap to require manual authorization by a supervisor for anything outside 2 or 3 standard deviations.

Re:Simple programming? (2, Insightful)

alyawn (694153) | more than 8 years ago | (#14694335)

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

Tax Rate? (3, Interesting)

bmoon (721018) | more than 8 years ago | (#14694180)

That's quite some tax rate... where does an $8M home translate into $8M of revenue for the county?

Re:Tax Rate? (1)

bmoon (721018) | more than 8 years ago | (#14694196)

Ok -- with updated figures...

Where does a $400,000,000 home translate into a $8,000,000 in annual county property tax? Hmm... sounds bogus to me.

Re:Tax Rate? (2, Informative)

grommit (97148) | more than 8 years ago | (#14694268)

You think a 2% property tax is bogus? I guess it would sound bogus if you've never had to pay property taxes before. Personally, my property taxes are at about 1.5%

Re:Tax Rate? (2, Informative)

Midnight Thunder (17205) | more than 8 years ago | (#14694205)

You need to read the article. The house was mis-valued at $400 million, and the tax on that was calculated at $8 million.

Re:Tax Rate? (0)

Anonymous Coward | more than 8 years ago | (#14694208)

8 HUNDRED million, man. Learn to read.

Re:Tax Rate? (1)

hattig (47930) | more than 8 years ago | (#14694228)


$400 million value homes -> $8 million tax income via a 2% property tax (I assume).

Unfortunately the house is only worth $121,000, so the actual owed taxes were $2420, and that's assuming that the 2% tax rate applies at all values. It might only be 0.5% at that low a value, for example.

Why not just add more to the national debt and ignore the $8m shortfall. It'd hardly dent the trillions of debt. :p (sod trying to be responsible with money, hehe)

Re:Tax Rate? (0)

Anonymous Coward | more than 8 years ago | (#14694926)

Sorry to take this seriously, but some people may well wonder: Well, for one thing, it's a county government, not the federal one. For the other thing, the way you increase government debt is through selling bonds. Who the hell would buy a bond from a county or municipal government that made that big a screw up and never noticed it? Not me, for sure. The interest rate would have to be something astonishing - making them classic junk bonds. No thank you.

Re:Tax Rate? (0)

mmkkbb (816035) | more than 8 years ago | (#14694232)

RTFA, that would be 2%.

"A house erroneously valued at $400 million"

Re:Tax Rate? (1)

SierraPete (834755) | more than 8 years ago | (#14694465)

Human Error Acknowledged. Caffeine not found, operator halted. It should have been 400M rather than 800M. About a 2% tax rate. Pretty reasonable all things considered. We're getting ready to move and the tax rate in the country we're moving to is close to 3%. No smoke, no kiss.

400 not 800 (5, Informative)

slinted (374) | more than 8 years ago | (#14694181)

"$121,000 showed a value in the database at $800,000,000"

Did anyone actually bother to rtfa, or is it just cool to make up numbers for post summaries now?

"A house erroneously valued at $400 million"
"The house had been valued at $121,900 before the glitch."

Re:400 not 800 (1, Funny)

Anonymous Coward | more than 8 years ago | (#14694194)

Um, you've been reading Slashdot for what, 9 years? And you've only just noticed that story summaries suck the giant horned choad of Satan?

Re:400 not 800 (1, Funny)

Anonymous Coward | more than 8 years ago | (#14694242)

Did anyone actually bother to rtfa, or is it just cool to make up numbers for post summaries now?

"A house erroneously valued at $400 million"
"The house had been valued at $121,900 before the glitch."


Oh! That settles it then. Nothing to see here.

Re:400 not 800 (1)

Rocketship Underpant (804162) | more than 8 years ago | (#14694378)

Give the Slashdot editors credit for ingenuity; I had no idea they'd come up with a way to misspell numbers. :)

Well, with today's taxes (5, Funny)

ral8158 (947954) | more than 8 years ago | (#14694183)

I mean, that's not a huge error, now is it?

Read the Article.... (4, Funny)

shoemakc (448730) | more than 8 years ago | (#14694192)

Read the article: It says the shortfall occured because the home was incorectly valued; The taxes on an 8 million dollar home are not 8 million dollars...but a fraction of that.

So here on Long Island for example, taxes would only be about 7 million...

-Chris

Read the article yourself... (4, Insightful)

expro (597113) | more than 8 years ago | (#14694201)

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

Get rich quick scheme (4, Funny)

technoextreme (885694) | more than 8 years ago | (#14694212)

Sell the house at $400 million dollars. Pay the taxes and then run away never to be seen again.

I know taxes are high there but damn (1, Insightful)

Immercenary_2000 (863998) | more than 8 years ago | (#14694215)

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.

Honest Mistake (0)

Jetboy01 (550638) | more than 8 years ago | (#14694227)

Of course its an easy mistake to make... the keys are like, right next to each other.

They didn't notice (4, Insightful)

mac123 (25118) | more than 8 years ago | (#14694233)

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.

Re:They didn't notice (1, Insightful)

MindStalker (22827) | more than 8 years ago | (#14694263)

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.

Re:They didn't notice (2, Informative)

yelvington (8169) | more than 8 years ago | (#14694387)

That's not how local property taxation works in the United States.

Local tax districts set a budget based on some assumptions about the tax base (the amount of taxable real property). After the budget is approved, bureaucrats in the taxation department compute the actual rate by dividing the budgeted revenue / taxable base. Generally there's a legal limit on the rate, but the actual rate that is charged is based on that computation and somewhat lower.

So your property tax rate isn't static (like sales tax, for instance), but rather dynamic from year to year.

In this scenario, the governing board sets a budget based on an assumption of base B.

But when the bills are generated, they're computed on a base of roughly B + 400 million.

As a result, everybody else in the county is just slightly underbilled ... and when the mistake in the database is discovered, it's too late to do anything about it.

Re:They didn't notice (2, Informative)

JeffSh (71237) | more than 8 years ago | (#14694444)

i have mod points and i intended to use them because there are alot of great insightful posts, but i had a choice with yours. I could either just mod it down or reply.

I chose to reply.

I don't know what state you're from, and things may work that way there, but in Michigan, local taxes do NOT work that way.

There's an important thing to be said, and that's that alot of states do their taxes differently. Local municipal growth and municipal management was something that was allowed to grow organically. Townships and county's right next to each otehr don't even do the same calculations or use the same methods, sometimes.

In Michigan, there are certain state rules that every municipality follows (like when tax collection ends, for instance) but some municipalities just disregard the established rules. There's atleast one county in Michigan that computes interest completely wrong.

anyway, the point of this post is to say that there is no uniform method, code or law that dictates how local taxes are calculated. that may be the way they are there, but not here or other places necessarily.

Re:They didn't notice (2, Insightful)

puetzc (131221) | more than 8 years ago | (#14694866)

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.

Time required to catch mistake (4, Insightful)

Dan East (318230) | more than 8 years ago | (#14694235)

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:Time required to catch mistake (1)

whoppers (307299) | more than 8 years ago | (#14694302)

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.

Agreed, I do financial reporting for very large engineering and construction projects, I've learned not to jump to be the hero that just uncovered a huge windfall for a project, 999 times out of 1000 it's an error somewhere.

Whoever was supposed to be checking for errors just likely wanted to be a hero and was obviously new. You bet your ass he won't do it again (at this job if he's not canned nor elsewhere if he was).

GIGO (1)

nanojath (265940) | more than 8 years ago | (#14694371)

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.

Maybe it's the same blind acceptance of numbers spit out by computers that will find a slack-jawed, gum-popping cashier blithely telling you you owe $58.60 for your soda, twinkie and magazine.

Re:Time required to catch mistake (0)

Anonymous Coward | more than 8 years ago | (#14694522)

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.

It's called a budget. If you haven't heard of them, the way they generally work is that you predict how much money you will receive (income) and how you will spend that money (expense). Call it counting your chicks if you want, but most people call it budgeting, and governments are required by law to do it. As far as businesses being more responsible, or operating more efficiently ... only people who haven't worked in a large company believe that crap. There is just as much waste, bureaucracy, and bs at a large company as in the government. The company is worse though because you can't vote the managers out. The problems arise from large organizations that have people in control of them -- government or not.

To err is human... (2, Funny)

linebackn (131821) | more than 8 years ago | (#14694261)

To err is human, but to really foul things up takes a computer.

And to make a total disastrous mess takes a computer _operated_ by a human.

Re:To err is human... (1)

wan-fu (746576) | more than 8 years ago | (#14694469)

Ah, but to really really foul things up requires a Slashdot editor.

bad local government (0)

Anonymous Coward | more than 8 years ago | (#14694292)

Any comptroller that didn't notice such an out of character spike in assessments should lose their job. They're so hungry for the money they believe any fantasy. It's part of the illusion of the ever-expanding tax base taking care of the ever-expanding demand for resources.

Maybe it's just me (0)

Anonymous Coward | more than 8 years ago | (#14694293)

but I think they should try to find the hacker that entered the "RER" code into the computer. From a public library, of course, to cover their ISP trail. Nice.

Crack Whore Budgeting (0)

Anonymous Coward | more than 8 years ago | (#14694312)

Government budgeting should be based on objective standards, not "lets make sure we spend up every frigging cent we get in." This type of bad government budgeting always falls apart when some bubble bursts and all those dividends and capital gains disappear. Sounds like any real estate bubble will hit these crack whores just as hard.

Damn 2% tax rate. (2, Funny)

the eric conspiracy (20178) | more than 8 years ago | (#14694315)

I wish my tax rate were that low. I'm paying more like 3%.

Re: Try closer to 50% (1)

Poisonous Drool (526798) | more than 8 years ago | (#14694711)

If you divide the property taxes I paid last year by my house payments, you get 48% and that number is low because property taxes go up almost every year and my house payment will eventually go to zero. If you live in your house for 40 years, the taxes could easily exceed what you paid for your house including interest.

Re: Try closer to 50% (1)

the eric conspiracy (20178) | more than 8 years ago | (#14694791)

Yeah, I hear you. I did the calculation based on current assesed value. My father is living in a house he bought for $15,000 in 1955. He now pays $7,000 per year in real estate taxes - so I'd guess he has paid 10-15 times the original purchase price in taxes. Factor in mortgage interest and it's probably 5 - 8x.

But our National Debt is a-OK? (0)

Anonymous Coward | more than 8 years ago | (#14694317)

It's a well known fact that the federal national debt is outrageous. They can say they're "following the leader" by using Federal Government accounting practices.

Crappy Software + Dumb People = Bad Stuff (2, Interesting)

ChaoticCoyote (195677) | more than 8 years ago | (#14694320)

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.

Re:Crappy Software + Dumb People = Bad Stuff (2, Funny)

El_Muerte_TDS (592157) | more than 8 years ago | (#14694539)

Great Software + Dumb People = Bad Stuff

So it's doesn't really matter in case of dumb people.

Although... we now have a problem.

Great Software + Dumb People = Bad Stuff = Crappy Software + Dumb People
Great Software = Crappy Software

Re:Crappy Software + Dumb People = Bad Stuff (1)

Loconut1389 (455297) | more than 8 years ago | (#14694744)

Overpriced house: $400,000,000
Budget Shortfall: $8M
Ancient Unprotected Auditor Page: $100
Leaving auditor page online and causing the entire city to suffer: priceless

ok.. could be better.. but oh well ;o)

Not surprised... (3, Insightful)

alyawn (694153) | more than 8 years ago | (#14694325)

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:Not surprised... (1)

Peyna (14792) | more than 8 years ago | (#14694785)

To repeat what I said earlier just to clarify this, the city did not bring in more money, they actually brought in less money this year than the previous year. The home values are determined, then the city figures out what they need to tax in order to meet their costs.

The $8 million overage is actually an $8 million shortage, because if the mistake had not been made, they would have had that $8 million. Since they thought this home was more valuable than it really was, everyone elses taxes were lowered by a collective $8 million.

There was no "windfall".

Re:Not surprised... (1)

alyawn (694153) | more than 8 years ago | (#14694814)

Ah.. thanks for the clarification. So this simple mistake actually lowered everyone's property taxes? If so, then watch out for next year's taxes.

Stop Blaming the Database! (4, Insightful)

Proudrooster (580120) | more than 8 years ago | (#14694355)

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!

Re:Stop Blaming the Database! (1)

SierraPete (834755) | more than 8 years ago | (#14694426)

First, Breathe.

Second, read the title of the Article:
$8M Revenue Shortfall Blamed on Bad DB Entry . Data doesn't just flow into a database through the services of FM. The primary way that data gets into a database is through it being entered by a human. Like my human error where it was 400,000,000 valuation instead of 800,000,000 (caffeine not found, operator halted). For it to be an entry into a database (and if it's screwed up) it was probably a human that did it. And even if the db was screwed up, it was a human who screwed up the db.

Databases, like anything else on the computer, does only what it is told. GIGO applies.

Re:Stop Blaming the Database! (2, Insightful)

iggymanz (596061) | more than 8 years ago | (#14694505)

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:Stop Blaming the Database! (3, Informative)

dbdweeb (598548) | more than 8 years ago | (#14694445)

Yeah, why do people always blame the database? I get the "it's the database" accusation all the time from Duhvelopers.

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?

Re:Stop Blaming the Database! (1)

akarnid (591191) | more than 8 years ago | (#14694629)

^^ Wish I had mod points for you. That is truly crappy design.

Re:Stop Blaming the Database! (0)

Anonymous Coward | more than 8 years ago | (#14694552)

According to the article it was a permissions problem. They gave the public access to a program that can change property values.

Were the programmers supposed to forsee this?

Comforting (0)

Anonymous Coward | more than 8 years ago | (#14694356)

This illustrates why we should be uneasy about massive systems like ADVISE, sifting through e-mail, phone conversations, etc. The system complexity will not be understood by those who use the system, and there will be the inevitable errors, false positives, etc. The danger will be when the government has the power to act on what the system is saying ... "You have been detained because ADVISE has given you a class-5 rating as a threat" ... next stop Cuba ...

Data entry problem (3, Interesting)

linebackn (131821) | more than 8 years ago | (#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!

Similar thing happened to me once (1)

laing (303349) | more than 8 years ago | (#14694380)

I purchased a home and it was subsequently reassessed for $100,000.00 more than I paid for it. There was no way to reason with the assessor's office so I had to take my fight to city hall (assessment appeals board). It's very much like a courtroom environment where you are the defense attorney and the assessor is the prosecutor. I had prepared my case well and the "prosecutor" settled and gave me everything I was asking for just before the hearing. He didn't want the board to see how badly he had screwed up. It still took over a year for the proper assessment to take effect (retroactively) and for the tax lein to be removed (I refused to overpay). I eventually got several checks from the county for my overpayments.

I think there is a culture of corruption in some areas where they will deliberately overassess your property thinking that you will not bother to fight it. Obviously in this case it was taken to an extreme.

Re:Similar thing happened to me once (2, Interesting)

acaben (80896) | more than 8 years ago | (#14694473)

If you refused to overpay, why did the country refund the money you overpaid?

Re:Similar thing happened to me once (0)

Anonymous Coward | more than 8 years ago | (#14694734)

...because they put a lien on his house. This means the city *has* been paid, by a type of mortgage, as to clear the lien he will need to transfer the money from those cheques to the city, perhaps plus interest.

My thoughts on the story (3, Insightful)

Antony-Kyre (807195) | more than 8 years ago | (#14694409)

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:My thoughts on the story (1)

JeffSh (71237) | more than 8 years ago | (#14694545)

i pay $2500 on my home i paid $135,000 for. for some reason the village thinks we need 3 full time police officers.

for 900 people..

i hate living in a village.

Re:My thoughts on the story (1)

easter1916 (452058) | more than 8 years ago | (#14694826)

Jesus man, that's high. I paid $1,800 on a property valued at $165,000 here in Maryland Heights, MO (western St. Louis county), and that's jumped dramatically since I bought the place (was $1,250 in 2002).

Re:My thoughts on the story (1)

paeanblack (191171) | more than 8 years ago | (#14694888)

i pay $2500 on my home i paid $135,000 for. for some reason the village thinks we need 3 full time police officers.

for 900 people..


You need at least three of anything if you want 24/7 availability. The town population isn't really relevant.

Re:My thoughts on the story (1)

Peyna (14792) | more than 8 years ago | (#14694768)

Read the story, they didn't add the amount to their budget, they used the figure to determine what tax rates needed to be to raise enough money to meet their budget. So the problem was that as a result of thinking they were getting all of this money, they were able to lower taxes all around and still raise the same amount of money.

In the end though, what they did was lower taxes and raise less money because the house wasn't worth what they thought it was.

The assessments come in first, then they determine what the tax rate needs to be in order to meet their needs and then collect the money.

Re:My thoughts on the story (1)

Antony-Kyre (807195) | more than 8 years ago | (#14694934)

I guess I should have read the whole article. Things are different where I live.

I think in the counties in Washington state, it's pretty much fixed, more or less. The governments have to deal with the amount of money they get. If they need more tax revenue, I think they would have to try raising the values of the home, not the taxation rate (which I "think" is limited by state constitutional law, lest they do a levy or something).

Comments on property taxes, and yes, this is definitely whining I'm doing.

They should really try making it progressive. I'm not sure about other states, but I know what they could do in my state. In my state, I think they should try having a constitutional amendment doing the following. Split property taxes into two categories, residential and non-residential properties. The following for residential properties only. Exempt the state median home value from state property taxation. Exempt the county median home value from county property taxation. Exempt the city median home value from city property taxation. Leave the levies alone as it would be too messy trying to do homestead exemptions with those. Uncap the state, county, and city property taxation rates allowing the state, county, and city governments adjust as necessary.

Tragic system design (3, Interesting)

dbdweeb (598548) | more than 8 years ago | (#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?

Re:Tragic system design (0)

Anonymous Coward | more than 8 years ago | (#14694663)

Too late, you posted this item with the unnecessary and childish slam against developers earlier. Kinda ironic to be questioning the competence of those that practice an entire field of work when you apparently can't be troubled to look at which buttons you're pushing onscreen...

property tax system (2, Informative)

dfghjk (711126) | more than 8 years ago | (#14694525)

Property taxes are something that should be done away with anyway. It's just one more unfair tax that creates extra work for everyone effected and introduces opportunities for abuse on both sides.

In my state, larger properties are almost always exempted from taxes anyway. That leaves the upper middle class paying the bulk. After all, the poor don't own valuable property and the rich manage their ag exemptions by hiring professional exemption maintainers. If you don't want to play the game you're gonna get screwed, just like dealing with the IRS.

Interesting thing, if the victim of this mistake wasn't watching what was going on, he could have been in a world of hurt. Where I live, there's a relatively short window of time to dispute a valuation. After that you're in real trouble.

People need to realize that a consumption tax is the way to go. Infrastructure for that largely exists already and cheating is hard to do. Wealthier people consume more so therefore pay more and there's a builtin incentive to save. The fewer hidden taxes we have the better since it gives us better visibility to how much we really pay.

Re:property tax system (1)

isn't my name (514234) | more than 8 years ago | (#14694673)

Interesting thing, if the victim of this mistake wasn't watching what was going on, he could have been in a world of hurt. Where I live, there's a relatively short window of time to dispute a valuation. After that you're in real trouble.

It could be even worse. I live in the county right next door and I do not actually see my property taxes. They are sent directly to my mortgage company, who adjusts my escrow payments based on the property taxes. So, if the person had a mortgage handled by some mega-corp in some distant state, they may not have realized until they go the adjustment notice on the mortgage payments.

People need to realize that a consumption tax is the way to go. Infrastructure for that largely exists already and cheating is hard to do. Wealthier people consume more so therefore pay more and there's a builtin incentive to save. The fewer hidden taxes we have the better since it gives us better visibility to how much we really pay.

Yes, a rich person probably buys more in a year than a poor person. However, as a percentage of income, the rich person spends much less of their income buying things that would be taxed in a consumption system. That's why sales tax based schemes are known as regressive taxes because they generally impose a higher tax burden on the lower incomes. Toss that into your calculations, and the tax rate is going to have to be very high to make up the difference in what you are losing on property/income taxes.

Re:property tax system (2, Insightful)

jombee (111566) | more than 8 years ago | (#14694913)

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

Murphy's law (1)

jamesl (106902) | more than 8 years ago | (#14694541)

The county treasurer's name is Murphy. Jim Murphy. You can look it up.

Both Ends (2, Interesting)

Karma Farmer (595141) | more than 8 years ago | (#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.

garbage in, garbage out. (0, Troll)

oyenstikker (536040) | more than 8 years ago | (#14694903)

Why is this a big story?

Wow! (1)

xenoxaos (731206) | more than 8 years ago | (#14694907)

I think thats the house down the street from me. Another weird thing, I used to work for the Den Dude.
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