Time for the Taxpayer to Assess the Assessor!

Can local assessors do an accurate assessment?  It depends.  A sampling of data across the county suggests a wide variation in accuracy, between the various local assessors.  If last year’s assessment is an indication, then it seems that the township assessors will do a more accurate job than the cities.  In a review of data comparing the sale prices of homes to the SEV for the same property, there is a clear pattern that the townships did a more accurate job.

 State law requires the assessor to set the State Equalized Value (SEV) at 50% of market value. Each year the local assessors study sales data in their respective jurisdictions to determine if the SEV was accurate.  If an assessor has it right, then the SEV divided by the true cash value should equal 50%.   If the average result within an assessment district is 60% then the assessment was high and the assessor adjusts the entire district downward.  If the results are lower than 49%, then the assessor will apply a factor to increase the SEV for all the properties within the district to the 50% level.

 Property taxes are not directly affected by SEV.  In 1994, as part of Proposal A, a new term, Taxable Value, was introduced.  Taxable Value multiplied by the millage rate  determine property taxes.  Taxable Value (TV), cannot increase by more than the inflation rate or 5%, whichever is less.  Sound complicated?  It is, and it gets worse.  Over the years, property values have increased faster than the inflation rate, creating a gap between SEV and TV.  It seems like the taxman is getting shorted.  Don’t worry, the taxman catches up every time a sale takes place because the following year the gap is closed between SEV and TV.  The cap on the tax increase is really only a delay, and remember, the tax man got a 50% increase in the sales tax as part of the deal.  Overall, Proposal A, was a huge tax increase.

 A small decrease in property values would only cut into the “gap”, but would still allow taxes to increase on most properties.

 So why the concern about SEV?  Politicians never anticipated the decline in property values to the extent that we have experienced.  Because Taxable Value can never be greater than SEV, a large decline in property values will eliminate the gap on nearly every property, and cause a massive decline in property tax revenues.

 If the small sample is an indication, then the taxpayers of St. Clair County have been overtaxed by millions of dollars.  Recently, county officials have acknowledged that “the real estate market is flat”, one even suggested “a five to six percent decrease in property values”. That is like a weather forecaster in New Orleans, looking at a map of the approaching hurricane, Gustav, and then predicting rain!  He might be accused of an underassessment.

 Local tax assessors are the guardians of the public trust.  They are also guardians of government revenue.  They are between a rock and a hard place when it comes to balancing their loyalties.  The only solution, with integrity, is accuracy – no matter what the outcome.

 Volunteers, responding to this article, looked up the SEV and Taxable Values on over 1,300 properties, that sold in the past eleven months.  By clicking here you see the results of their work.  You may wish to visit the Assessment Center, and see the overall effects on your budget as well as the various taxing authorities.