CROWN POINT | The state is giving Lake County officials the green light to give flood-damaged homeowners and small businesses breaks on paying property taxes for this year and possibly next.

Mary Jane Michalak, a spokeswoman for the Indiana Department of Local Government Finance, said the treasurer's office can offer installment plans to homeowners and small businesses devastated by this month's flood.

"We gave them the OK. My understanding is that the (Lake) County Council still has to act," she said Monday.

County Councilman Larry Blanchard, R-Crown Point, said he expects the council could pass a resolution next month approving installments.

County Treasurer John Petalas said hundreds who were devastated financially by heavy rains more than two weeks ago need more time to raise money for their taxes than the current schedule allows. That schedule requires half the amount due to be paid by the end of October and the remainder by year's end.

The council is expected to create a new payment plan of three installments over the final three months of 2008.

Sherry Stone, director of real estate matters in the county assessor's office, said Monday she still is seeking guidance from the state about how to conduct a reassessment that could lower flood victims' property values and taxes due in 2009.

Michalak said Monday the county doesn't need the state's permission to do a reassessment as long as it follows rules established under past emergency reassessments.

A memo from the Department of Local Government Finance provided to The Times by Michalak indicates the county will have to conduct detailed inspections. Household items such as ruined furniture and appliances aren't taxable and wouldn't count toward a reduction in a home's value.

Stone said the county needs to know whether it can hire a private firm to conduct the investigation required to justify lowering property values and whether the office can use data already supplied by property owners to the Federal Emergency Management Agency.

Times staff writer Patrick Guinane contributed to this report.