Lawmakers try to reform tax valuations

There’s one thing about property tax valuations that almost everyone agrees on: They are notoriously inaccurate.

Many property owners complain their tax values are too high, or that they rise too much in a single year. Those who aren’t complaining often believe the values placed on their properties for tax purposes fall well below the prices their homes would bring at sale.

Even government tax assessors themselves say it’s impossible for them to value every piece of property precisely at the amount it would sell for on the open market.

“I’ve been struggling with it for 35 years,” said Burt Manning, chief appraiser for the Fulton County tax valuation office, which tracks 330,000 pieces of property. “Most of my audiences accept that it’s pretty accurate in general but say it’s not right for my property. I don’t really have an answer for that.”

With so much discontent around assessments, it’s no surprise that state legislators again are proposing a series of reforms.

In the early days of the 2009 session, lawmakers already have introduced several bills challenging the tax valuation system.

Raymond Skinner, a sales agent for Platinum Real Estate, sees a clear need for change.

In March, Skinner bought a foreclosed house in south Fulton County for $195,000. The house had been appraised at $228,000. Skinner tried to get the tax value reduced below the sales price because the house wasn’t finished on Jan. 1, the date the tax value is set.

After the appeal, the value on the house was lowered to the amount Skinner paid. He’s still dissatisfied, so he’s appealing the decision to Superior Court.

“The appeal process is unfair,” Skinner said. “When you tell me a half-finished house is worth $228,000, I’ve got zero confidence in the system.”

Local officials say they hear similar criticism of the system all the time. Decatur Mayor Bill Floyd, for instance, said gripes about assessments make up 90 percent of the complaints he fields. And House Speaker Pro-Tem Mark Burkhalter (R-Johns Creek) is among a generation of Fulton County politicians who began their political careers more than 15 years ago protesting tax values.

Some legislative action already has begun. On Thursday, the House passed HB 233, which freezes assessments for two years. The bill still must win approval in the Senate.

Also Thursday, House Resolution 1, which caps growth in tax values, fell short of the two-thirds majority it needed. It’s coming back up on Tuesday. Another resolution, HR 2 proposes similar reforms to those in HR 1.

Rep. Kevin Levitas (D-Atlanta) challenges the appeals process with HR 179. That would allow homeowners to use a private appraisal to set their value. If county officials didn’t accept the property owner’s valuation, the government could commission its own private appraisal.

“The current system is unfair for a variety of reasons,” Levitas said. “The appropriate time to capture an increase in value is at the time of sale.”

Reforms are being proposed in the Senate, too. SB 55 would force the county officials who set tax values to include foreclosures when they calculate taxable values.

SB 83 would increase the statewide homestead exemption from $2,000 to $4,000.

The idea behind HR 1 has been before the Legislature in one form or another several times over the past few years. While it would cap tax value growth, the resolution also seeks to end the debate between property owners and assessors over values by locking tax appraisals to sales prices.

Rep. Edward Lindsey (R-Atlanta), the principal sponsor, said his proposal would eliminate arguing over values because the price paid for a property would set the taxable value. HR 2 would also do that.

County appraisal offices, Lindsey noted, have a difficult job. They’re supposed to determine the “fair market value” —- that is, the price a property would bring at sale —- for every taxable property in a county.

Most have scores of properties to monitor, but only a handful of appraisers. So assessors assign values to individual properties based on trends and key sales. They can be generally right for areas, subdivisions or communities, but wrong for specific properties, Lindsey said.

“Accepting the reality that our current system does not accurately assess individual property, it’s a broad stroke across the landscape of each county,” Lindsey said. “Unfortunately, it’s a broad stroke to the detriment of many taxpayers.”

Terry Rader, interim chief appraiser in DeKalb County, said when values fall sharply or rise dramatically, assessors struggle to keep up.

The current system, with its mandate to review each property every three years, is designed for “a good steady market without any catastrophes,” he said.

“It’s not designed to get everybody to 100 percent of fair market value,” Rader said. “It’s going to get some people to 92 percent, some to 106 percent.”

To correct its flaws, the system includes an appeal process. Unfortunately, property owners such as Skinner may find a hearing before a three-member equalization board frustrating at best.

John Lynch of Cumming complained the tax value on his property is at least $37,000 more than it should be on the former foreclosed home he bought in October 2007.

“It’s farcical,” Lynch said. “They go around raising everybody’s value. It doesn’t make sense. Look at the state of the economy.”