By. Brent Wilson, Field Officer
Along with the holiday cards and sales circulars, Greene County property owners recently received their biennial Assessment Change for 2017 in the mail; and property values are up. Some Greene County residents fear this increase in property value will make it easier to increase local revenue (and spending).
Fred Pearson of Pearson Appraisal Service performed the assessment for Greene County. In County Administrator John Barkley’s December report to the Supervisors, he stated that the average assessment increase is 5%.
During the December 13th meeting, Supervisor Jim Frydl (Midway) commented that the increase in assessed values is indicating an increase in the value of property in Greene County. (The assessment form indicates that the assessed value is at 100% of fair market value). The impact of the tax is dependent on the increased value of your property. For example, at a property tax rate of $.775 an increase of $10,000 in assessed value would generate an increase of $77.50 in tax.
While the above analysis is accurate, the driver for the assessed value assignment is the marketplace. The fact that your home may have appreciated and you have more equity does not put more cash in your pocket to pay the tax bill. Only if you are selling your home (or in some cases refinancing) do you get the increased equity converted into cash.
Greene County’s reassessment process next moves into an appeal process. Property owners who disagree with the assessors valuation can make an appointment by calling 434-985-5201 no later than December 20, 2016. The County notice states the appeal appointment will be with the Assessor (interestingly Greene County does not have an Assesor on staff). When the Free Enterprise Forum inquired we were told that the meeting would be with Fred Pearson.
The small, nonscientific, sampling of reassessments from the area north and west of Stanardsville showed a property value increase of nearly 10%. So one may naturally assume that some areas in the county are below the 5% average to offset those assessments that are above the overall average.
The appeal process allows the property owner to discuss with Pearson the basis of the new value. Since the assessed values are to represent market values, aggrieved property owners are encouraged to identify sales in the past two years in their neighborhood of houses with comparable features and size of property to see if their assessed value could be argued to be reduced. If after the meeting with Pearson, the property owner still is not satisfied with the value assigned to their property there is a Board of Equalization review that starts February 1, 2017 and goes until February 15, 2017.
If the overall property value in the county increases then the impact would be to increase tax revenue assuming that the tax levy stays the same as the prior year. Virginia State code mandates that before the tax rate is set next year there will be a calculation to determine what the new tax rate would generate the same tax revenue as the prior year. In this case, since the assessed values are increasing the tax rate would likely need to be be lowered to generate an equalization rate.
The supervisors will make the decision of what the tax rate will be which may or may not be all the way down to the equalization rate. What is interesting is that Barkley’s December report also indicated that the county will have a surplus in tax revenue for the recently completed current fiscal year (FY16).
So what will the county do with the excess tax revenue?
- Will the Supervisors keep the money and build the Reserve Fund?
- Will they direct the funds be used toward the water impoundment system and school capital projects?
- Will the Supervisors take the additional revenue into account when setting the tax rate for the new fiscal year and lower the rate even below the equalization rate?
- Or a novel approach – will the Supervisors refund the extra tax revenue to the taxpayers and start fresh in the next fiscal year?
Only time will tell but given the size of the projects mentioned above, Greene County (like most Virginia localities) is looking for sources of revenue wherever they can.
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