Tax assessments drop in five major counties

There's no question tax assessors across metro Atlanta have reacted to the continuing real estate collapse. When Fulton County mails out notices June 5, the five major counties will have dropped values for more than 350,000 parcels.

The question taxpayers must now decide is, "Have they gone far enough?"

That's the central issue in a lawsuit filed last week challenging DeKalb County's efforts to set 2009 values. The county sent out about 30,000 bills in April, less than half reductions.

Officials admitted they did not include foreclosures in their calculations even though a new state law mandated their consideration. They also raised values for some parcels even though a different state law froze values for three years.

So, last week they redid their calculations and sent out 95,000 notices, this time following the dictates of both new state laws. Hank Ruffin, DeKalb's interim chief appraiser, said at least 40,000 properties will fall by more than 25 percent.

Still, local lawyer John Woodham filed a lawsuit challenging 2009 taxable values for DeKalb County.

"There's no way they could have done all that work in three weeks," said Woodham. "They say the tax digest went down 4 percent. It's probably at least 12 percent. I don't think that's a reasonable number."

John O'Callaghan, CEO of the Atlanta Neighborhood Development Partnership, agreed. His local nonprofit did a study earlier this year of values in high-foreclosure neighborhoods across the five major metro counties and found the sales prices were often a fraction of their tax appraisals.

The study found median sales prices in three high-foreclosure ZIP codes in south DeKalb were on average 57 percent of the tax appraisal. The same study found ZIP codes in Clayton and Fulton where median sales prices were half or less of the median taxable values. Two Fulton ZIP codes had median sales prices in the $20,000 range but median tax values five times as high.

"It's seems unlikely you'll see values set at the levels they should be," O'Callaghan said.

The continuing real estate crisis certainly has sent assessors scrambling to catch up and understand.

Sales volumes are dramatically down. Foreclosures and increasing rapidly. Distressed sales are becoming the market in many places. For many values are falling. Some pockets are holding their own.

Assessors say all those factors make setting 2009 values extraordinarily difficult. The system of mass appraisal, assessors agree, is designed to make gradual changes year to year and struggles during times of dramatic, swift change. Normally, prices go up each year, allowing assessors to follow a consistent pattern.

But this year, few of the normal patterns hold true. Values in some places values have collapsed under the weight of foreclosures and distressed sales. A computer search for metro Atlanta Friday returned 177 properties for sale at $10,000 or less.

"It really throws several monkey wrenches in the way we normally do things," Burt Manning, chief appraiser for Fulton. "With some of these low-priced sales, we don't know has the plumbing been ripped out. Is the air conditioner gone. That's why we are truly struggling with how low do we go."

Fulton expects to be the next major metro county to send out revaluations. Plans are to mail about 105,000 notices on June 5. About 95,000 will lower values, Manning said.

Still, Manning said he expects to get complaints that he hasn't gone far enough. He agreed the department isn't likely to value homes across wide parts of south and west Atlanta in the $20,000 to $30,000 range.

Property owners who feel their values are still too high have the right to appeal, as long as they got a revaluation notice this year.

But even appeals have a new twist this year as well — an optional appeal system using binding arbitration rather than an appearance before a Board of Equalization.

With the tax system in so much turmoil, assessors say they have no way to predict how many folks will accept their lower values or choose to contest them or choose arbitration versus the traditional system.

In Clayton, where appeals must be filed by June 8, the county's already taken in 1,800 appeals. However, that's against 70,000 notices. Clayton lowered the values on nearly 80 percent of its parcels, the most in metro Atlanta.

Rodney McDaniel, chief appraiser in Clayton, said normally the county gets a last-minute flood of appeals, but this year he's uncertain what will happen next.

Woodham, though, said the actions by assessors should be simple and clear. If sales are consistently in the $20,000 range, then tax values should match those numbers.

"It's a new world," Woodham said. "I don't think they hesitated to raise values the last five years. Their state mandated duty requires these movements downward."