{"id":15941,"date":"2016-04-10T08:03:22","date_gmt":"2016-04-10T15:03:22","guid":{"rendered":"http:\/\/spijue.wpengine.com\/news\/rising-assessments-raise-questions\/"},"modified":"2016-04-10T08:03:22","modified_gmt":"2016-04-10T15:03:22","slug":"rising-assessments-raise-questions","status":"publish","type":"post","link":"https:\/\/www.juneauempire.com\/news\/rising-assessments-raise-questions\/","title":{"rendered":"Rising assessments raise questions"},"content":{"rendered":"
When Juneau resident Barb Bonner received her property assessment card from the city last month, she was alarmed by what she saw. The assessed value of her property had risen by almost $50,000, a 12 percent increase over last year.<\/p>\n
\u201cI was shocked,\u201d she told the Empire.<\/p>\n
She wasn\u2019t alone.<\/p>\n
Shortly after the city mailed out assessment cards, homeowners from all over Juneau turned to social media to consult \u2014 and in some cases console \u2014 each other about their rising property values.<\/p>\n
The Juneau Community Concern Facebook page in particular was a hotbed of assessment-related agitation. One commenter called the values \u201cridiculous\u201d and \u201cfreakin\u2019 horrible.\u201d Another suggested that if people were to march on City Hall they should \u201cbring pitchforks!\u201d<\/p>\n
Each spring, City Assessor Robin Potter stays away from social media for this reason. If she logs into her Facebook account at all, she does her best to keep a low profile to avoid conflict.<\/p>\n
\u201cBelieve it or not, I don\u2019t like to be disliked, but that just comes with the job,\u201d she said when she and city Finance Director Bob Bartholomew sat down with the Empire last week for an interview about the assessments.<\/p>\n
Bonner didn\u2019t participate in the Facebook banter, but she shared a lot of the same concerns that people expressed there, reasonably or not. The general fear that typically comes with increasing assessments is that property taxes will be increasing, too.<\/p>\n
Reasonable though it may seem, that fear is not always founded.<\/p>\n
<\/p>\n
Millin\u2019 around<\/strong><\/p>\n Not everybody\u2019s assessment increased at the same rate as Bonner\u2019s. In fact, Potter said that a 12 percent hike in assessed value is atypical and recommended that anybody with such an increase appeal to the city. Bonner is already working on her appeal.<\/p>\n Some people\u2019s assessments actually went down. Juneau resident Will Judy owns two properties in town, one in the Mendenhall Valley and the other in West Juneau. Each of his properties decreased in value by about $25,000.<\/p>\n Regardless of whether your property went up or down in value, it\u2019s important to remember that assessed property values alone are not enough to determine whether your property taxes will increase, according to Bartholomew.<\/p>\n \u201cIt\u2019s not the assessment value that drives the tax revenue,\u201d he said. \u201cIt\u2019s really driven by what happens with the mill rate.\u201d<\/p>\n Each year during budget season, Bartholomew recommends a mill rate, which is subject to Assembly approval. This year, for the first time since 2010, the mill rate might drop. Bartholomew has recommended a rate 10.51 mills \u2014 down 2.3 percent from the past two years. The Assembly take up the mill rate for discussion at it\u2019s April 27 meeting.<\/p>\n If approved, Bartholomew\u2019s proposed mill rate would mean that a person with a $300,000 home would pay $3,153 dollars in property taxes. Last year, that person would have paid $3,228 in property taxes for a home of equal value.<\/p>\n This is where the assessments fit in. The total property assessment for Juneau rose by about 4.4 percent from last year. That\u2019s the steepest increase in the past five years, but this doesn\u2019t mean that everybody\u2019s assessed property values went up. Rather, it reveals the general trend of property values in Juneau: they\u2019re increasing.<\/p>\n It\u2019s because of this increase that Bartholomew recommended lowering the mill rate. Back in December he planned for a 2 percent increase in assessed property values. If the mill rate remained unchanged, this would have yielded a $1 million increase in property taxes for the city.<\/p>\n When Bartholomew found out the assessed property values had actually increased by 4.4 percent, yielding a potential $2.2 million increase in tax revenue under the old mill rate, he decided to lower the rate.<\/p>\n \u201cWe didn\u2019t need that much revenue to balance the budget so we backed off the mill rate,\u201d Bartholomew said. \u201cThe average person will see property tax increases, but they won\u2019t be as large as the change in their property values.\u201d<\/p>\n Under the proposed mill rate, Bonner would be paying $406.23 more in property taxes than she did last year if she doesn\u2019t win her appeal. Though $400 is nothing to scoff at, it is about $110 less than she would be paying if the mill rate was the same as last year.<\/p>\n In Will Judy\u2019s case, he\u2019ll be paying much less in property taxes than he was last year, but even if he wasn\u2019t he said he wouldn\u2019t mind. Judy did throw in on some of the Facebook posts, but he doesn\u2019t agree with some of the more cynical commenters, who suggested that the increased property values were a part of a city conspiracy to generate more tax revenue.<\/p>\n \u201cI don\u2019t think there\u2019s some collusion among the assessors to get more money out of people by raising their house values arbitrarily,\u201d he told the Empire. \u201cThere\u2019s just an ebb and flow of property values.\u201d<\/p>\n Bartholomew and Potter would certainly agree with Judy.<\/p>\n \u201cWe don\u2019t try to say, \u2018What\u2019s the most we can get from property taxes?\u2019\u201d Bartholomew said. \u201cIt doesn\u2019t drive assessments, and it actually doesn\u2019t drive the mill rate either.\u201d<\/p>\n <\/p>\n Laggin\u2019 behind<\/strong><\/p>\n One of the reasons Bonner was so shocked to see her assessed value had increased by as much as it had was because she didn\u2019t do anything to improve her home in the past year.<\/p>\n \u201cNothing has changed,\u201d she said. \u201cIf anything, everything is a year older. I don\u2019t see why the value would\u2019ve gone up let alone that much.\u201d<\/p>\n Bartholomew and Potter said that Bonner\u2019s concern is a normal reaction that homeowners have when they receive their assessment cards, which don\u2019t come with much of an explanation.<\/p>\n The city assesses properties using a method called mass appraisal. This approach relies on statistical modeling rather than individual appraisal of properties to assess large numbers of homes more efficiently. Mass appraisal is the standard set by the International Association of Assessing Officers.<\/p>\n \u201cIt\u2019s the most fair and equitable way to set assessments on a large number of parcels,\u201d Potter said. That and the city couldn\u2019t afford to hire enough people to appraise every single house in Juneau every year. \u201cThey\u2019re expecting appraisal-quality, and that can\u2019t be done. It\u2019s just not practical.\u201d<\/p>\n Mass appraisal is the only way that Potter and her team of six people are able to assess the 13,500 or so parcels in Juneau each year.<\/p>\n Instead of appraising houses in the manner most people are accustomed to, mass appraisal relies on sales records and qualities such as the geography and topography of each lot to determine what it would sell for under fair market conditions.<\/p>\n Judy\u2019s valley property, for example, is located in a Tall Timbers. The city recently discovered, courtesy of the Federal Emergency management Agency, that this neighborhood is in a flood zone. This is why Judy\u2019s property and several others in the area were assessed for less than they were last year.<\/p>\n Mass appraisal is not perfect though.<\/p>\n \u201cDoing mass appraisal, you\u2019re not going to get every parcel exactly right,\u201d Potter said. In fact, if the assessed value of any property matches its exact value, \u201cit\u2019s just by luck,\u201d Bartholomew added.<\/p>\n This is true of mass appraisal everywhere it is used, but it\u2019s especially true here. Alaska is one of six nondisclosure states in the nation. This means property owners don\u2019t have to disclose to the state any information about the sale of their property.<\/p>\n <\/p>\n Full disclosure<\/strong><\/p>\n That makes mass appraisal \u201can almost impossible situation,\u201d according to State Assessor Marty McGee.<\/p>\n Assessors use sales data to determine how to assess comparable homes in comparable areas. If multiple houses in a neighborhood are selling for similar prices, then assessors are able to extrapolate the value of other houses in that area. In a nondisclosure state though, they only have access to sales data that people submit voluntarily.<\/p>\n In Alaska, assessors only have access to about a third of the sales data from the current year. After two years, that number goes up to about 50 percent. This means that most assessors this year are still getting sales data from 2014. Just this week, Potter received information from four sales in 2014 that she didn\u2019t have while preparing this year\u2019s assessments.<\/p>\n This creates what McGee calls \u201clag.\u201d<\/p>\n \u201cYour assessed value is always looking backward,\u201d he said, explaining that assessments are based on sales that have already happened, not predictions of what the market will do. But without all of the sales data \u201cyou wind up in this catch-up position.\u201d<\/p>\n As more sales data become available, assessors are able to see more clearly what the market is actually doing. Due to the lagging availability of these sales data, they sometimes realize two or three years later that their previous assessed values had missed the mark.<\/p>\n This creates situations in which assessors have to adjust assessments to correct earlier mistakes and to account for normal increases, such as inflation. These corrections often cause a whiplash effect for the homeowners affected. One year, their property shoots up by a lot more than they expected, seemingly out of the blue.<\/p>\n This phenomenon was at least partially responsible for what happened in Juneau this year, Potter said.<\/p>\n The International Association of Assessing Officers, of which Potter and McGee are members, \u201cstrongly recommends\u201d full disclosure wherever possible, McGee said. Full disclosure would allow assessors to more accurately value properties the first time, and these snap corrections wouldn\u2019t be as frequent or jarring, McGee said.<\/p>\n He gave a presentation about the matter to Alaska lawmakers at the Capitol earlier this legislative session during a \u201clunch and learn.\u201d He compared the process of assessing without all of the sales data to \u201cworking on a watch while wearing a blindfold and mittens.\u201d<\/p>\n Though there is no legislation in Alaska that could bring about such a change, there is in Texas, another nondisclosure state, Potter said. And McGee thinks that Alaska could follow suit sometime soon.<\/p>\n \u201cI think it\u2019s achievable in the near future,\u201d he said. \u201cI\u2019ve been engaged in this discussion for 17 years, and I\u2019ve never heard a single rational argument that says disclosure hurts people.\u201d<\/p>\n Marty McKeown, the broker and owner of Remax of Juneau, doesn\u2019t support changing state law in the interest of full disclosure, but he does recognize that the nondisclosure poses a problem for assessors.<\/p>\n \u201cThey\u2019re not as informed as they are in a lot of other states,\u201d he said. \u201cIt\u2019s tough. Everyone gets mad at the assessors, but they don\u2019t have all the knowledge.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" When Juneau resident Barb Bonner received her property assessment card from the city last month, she was alarmed by what she saw. The assessed value of her property had risen by almost $50,000, a 12 percent increase over last year. \u201cI was shocked,\u201d she told the Empire. She wasn\u2019t alone. Shortly after the city mailed […]<\/p>\n","protected":false},"author":107,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_stopmodifiedupdate":false,"_modified_date":"","wds_primary_category":4,"footnotes":""},"categories":[4],"tags":[75],"yst_prominent_words":[],"class_list":["post-15941","post","type-post","status-publish","format-standard","hentry","category-news","tag-local-news"],"_links":{"self":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/15941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/users\/107"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/comments?post=15941"}],"version-history":[{"count":0,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/posts\/15941\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/media?parent=15941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/categories?post=15941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/tags?post=15941"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.juneauempire.com\/wp-json\/wp\/v2\/yst_prominent_words?post=15941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}