By. Brent Wilson, Greene County Field Officer
The biannual reassessment of property values in Greene County is now well underway. At the November 13th Board of Supervisors meeting, Fred Pearson from the Reassessment Office and Larry Snow, Commissioner of Revenue, updated the BOS with the process to date. The field work to assess the values for market conditions and changes/additions to property has been completed and the notices have been mailed to property owners. A Comprehensive Sales Data Report that contains sales from each district within the county has been prepared .
Property owners can make an appointment to appeal the reassessment of their property on November 26, 27, 29 or 30. The gross data shows a reduction in value of 6% but that includes land in easement that has declined 15% and is not taxed. The new reassessment value calculates to 99% of market value – well above the 95% minimum required by law.
Supervisor Jim Frydl got confirmation that the 99% was calculated comparing the sales price for those that have transacted recently vs. the reassessed value. Also, the 6% decline will then have excluded the property in land use, resulting a smaller reduction than the 6%.
Snow indicated that the final impact won’t be known until the meetings with the property owners and the hearings with the Board of Equalization running from January to March, 2013. Specific reassessments can vary dramatically, two specific reassessments showed a reduction of less than 1% and another a reduction of more than 10%, but in different locations of the county. There are over 10,000 parcels in Greene County that are reassessed .
BOS Chairmain Buggs Peyton commented that a decline of $.01/$100 equaled $188,000 in tax revenue. Snow indicated that a decline of 10% would have the equivalent impact of a reduction of about $.07/$100 ($.69/$100 x 10%) but he didn’t believe that the reassessment would be that drastic.
So, what does this process mean and what is the impact on the county and the homeowner?
Is a lower value good or bad for the homeowner?
A lower assessed value means, all else being equal, that the homeowner will owe less property tax. But, of course, the new assessment is one indicator that the homeowners investment in their home is worth less than the prior assessment. The impact to the county for a lower value, all else being equal, means less tax revenue.
Assuming that the property values decline 5%, that would have the impact of reducing the property tax from $12,972,000 down to about $12,323,000 a reduction of $647,000 in property tax revenue.
So, where will Greene County recoup the nearly 2/3 million dollars in property tax revenue?
The FY 2013 budget for Greene County isn’t being reduced nor has the cost of operating the county declined by 5%. The process is to have the tax rate increase to offset the decline in the assessed value of the property, the new rate being called an equalization rate.
But isn’t this an increase?
Yes and no.
It is an increase in the rate of tax. But it doesn’t increase the amount of tax being paid. The value of property has been selected to allocate a major cost of operating the county to the residents of the county. If the value of the property declines, then the rate of tax must increase if the locality is to receive the same amount of tax revenue to operate the county.
The Free Enterprise Forum supports the objective and regular regular reassessment of property. Based on our experience, the appeal process has seemed far and equitable. A failure of a locality to regularly reassess property can result in larger swings in valuation. While we do not have a position on any tax rate, it is important all involved understand an increased “equalized” rate in a downward assessment retains the actual dollar figure of the previous tax year.
Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.
The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you. To support this important work please donate online at www.freeenterpriseforum.org