[Vision2020] Assessment of the Property Tax
Mark Solomon
msolomon at moscow.com
Sat Apr 9 11:49:33 PDT 2005
Shelley,
No, I'm not an architect.. that's the other
"Mark" who often contributes to this list: Mark
Seman. I'm the blacksmith and semi-professional
troublemaker who was a county commissioner back
in the early 90's.
I'll guarantee you that the land will be
appraised for it's development potential, not for
farmland. That's as it should be unless the Trail
family was selling it as farmland.
Mark
At 11:38 AM -0700 4/9/05, Shelly wrote:
>Do you know if the Trail property will be
>assessed/appraised, "as is?" Or, "what could be?"
>Mark - you are an architect, right?
>
>S
>
>-------Original Message-------
>
>From: <mailto:msolomon at moscow.com>Mark Solomon
>Date: 04/09/05 11:33:43
>To: <mailto:CJs at Turbonet.com>Shelly
>Cc: <mailto:vision2020 at moscow.com>vision2020 at moscow.com
>Subject: [Spam] Re: [Spam] Re: [Vision2020] Assessment of the Property Tax
>
>Shelley,
>
>I don'tt know how the value was derived. I'd
>assume from sale or conversion of similar
>properties along Moscow's border.
>
>m.
>
>At 11:29 AM -0700 4/9/05, Shelly wrote:
>>Thank you for Mark. I know Phil went to the
>>assessors office with the intent to find out
>>how the Trail property is assessed and
>>this brochure was given to him.
>>
>>OOOOOOPS. I previously did say city not
>>assessors office. I think I need to ask Phil. I
>>will get some clarification. Sorry.
>>
>>Do you know how the value was derived of $250,000.00 for these ten acres?
>>
>>Shelley
>>
>>
>>
>>
>>
>>
>>-------Original Message-------
>>
>>From: <mailto:msolomon at moscow.com>Mark Solomon
>>Date: 04/09/05 11:17:04
>>To: <mailto:CJs at Turbonet.com>Shelly;
>><mailto:dickschmidt at moscow.com>dickschmidt at moscow.com
>>
>>>Cc: <mailto:vision2020 at moscow.com>vision2020 at moscow.com
>>>
>>>>Subject: [Spam] Re: [Vision2020] Assessment of the Property Tax
>>>>
>>>>Shelley,
>>>>
>>>>the numbers you are quoting refer to forest
>>>>land, not agricultural land. We confuse the
>>>>issue here in Latah County with our land use
>>>>zoning designation of Ag/Forest. The county
>>>>assessor does not. Most forest land in the
>>>>county does not have the development
>>>>potential any land adjacent to Moscow does,
>>>>including the Trail property.
>>>>
>>>>Mark Solomon
>>>>
>>>>At 11:11 AM -0700 4/9/05, Shelly wrote:
>>>>>Hi Jeff,
>>>>>
>>>>>Yes, CJ's is for sale for 1.3 mil. The
>>>>>assessed value on CJ's building is based on
>>>>>it's income. Similar to farmland.
>>>>>
>>>>>Phil picked up a brochure at the city
>>>>>called, "Idaho's Forestland Taxation Law"
>>>>>that I think can answer your other question.
>>>>>Since I do have the brochure I will quote
>>>>>from it.
>>>>>
>>>>>We are in Zone 2 also known as Latah County.
>>>>>Zone 2 Land Grade is as follows:
>>>>>
>>>>>For bare land and yield:
>>>>>Good: $150.00
>>>>>Med. $94.00
>>>>>Poor: $48.00
>>>>>
>>>>>For productivity:
>>>>>Good: $485.00
>>>>>Med.: $311.00
>>>>>Poor: $137.00
>>>>>
>>>>>In a nutshell:
>>>>>10 acres of the "primmest" AG/FOREST land goes for $4,850.00 per acre.
>>>>>Far cry from $250,000.00.
>>>>>
>>>>>40 acres of the "primmest" AG/FOREST land goes for $194,000.00 per acre.
>>>>>Far cry from $1,000,000.00.
>>>>>
>>>>>Now, if you valuate AG/FOREST land on it's
>>>>>"potential value" with added infrastructure,
>>>>>not it's current value then the Trail
>>>>>"gifted" land is easily worth over a million.
>>>>>
>>>>>Phil is at the meeting and I am home sick
>>>>>and trying to get 2 years of reading done
>>>>>for Phil on this levy issue.
>>>>>
>>>>>Shelley/Phil's wife
>>>>>Yes Phil will get his own email account shortly. I hope! :)
>>>>>
>>>>>
>>>>>
>>>>>
>>>>>-------Original Message-------
>>>>>
>>>>>From: <mailto:dickschmidt at moscow.com>Dick Schmidt
>>>>>Date: 04/09/05 09:55:30
>>>>>To:
>>>>><mailto:vision2020 at moscow.com>vision2020 at moscow.com;
>>>>><mailto:jeffh at moscow.com>Jeff Harkins
>>>>>Subject: Re: [Vision2020] Assessment of the Property Tax
>>>>>
>>>>>Jeff,
>>>>>
>>>>>So then for example CJ's is for sale for
>>>>>$1.3 million then his assessment would be
>>>>>based on that amount using a formula you
>>>>>have worked which probably has one formula
>>>>>for business and another for residential? In
>>>>>accordance to the freedom of information law
>>>>>then someone could go in and see what they
>>>>>are paying in taxes.
>>>>>
>>>>>Dick Schmidt
>>>>>
>>>>>----- Original Message -----
>>>>>From: <mailto:jeffh at moscow.com>Jeff Harkins
>>>>>To: <mailto:vision2020 at moscow.com>vision2020 at moscow.com
>>>>>
>>>>>>Sent: Saturday, April 09, 2005 9:10 AM
>>>>>>Subject: [Vision2020] Assessment of the Property Tax
>>>>>>
>>>>>>As many of you have commented, the Tax
>>>>>>Assessment Rate may not be a good measure
>>>>>>of the tax burden for a particular county.
>>>>>>And yes, you are absolutely correct.
>>>>>>
>>>>>>The real driver for the assessment of
>>>>>>property tax on residents of a county is
>>>>>>the level of budgeted expenditures for that
>>>>>>county. As many of you are aware, the
>>>>>>determination of the tax rate is derived by
>>>>>>identifying the amount of revenue needed to
>>>>>>fund the budgeted expenditures for the
>>>>>>year. Then, given the level of assessed
>>>>>>valuation subject to the tax, the tax levy
>>>>>>rate is determined by dividing the required
>>>>>>revenue (to be funded by property taxes) by
>>>>>>the total assessed valuation or:
>>>>>>
>>>>>>Required revenues / Total assessed valuation = Tax levy rate
>>>>>>
>>>>>>But as is obvious, while the budgeted
>>>>>>expenditures (required revenues) are
>>>>>>driving the amount of taxes that will be
>>>>>>assessed on property owners, it is the
>>>>>>assessed valuation that determines the
>>>>>>amount of tax that will be paid by each
>>>>>>property owner. And there are numerous and
>>>>>>inherent problems with the assessment
>>>>>>process. In Idaho, the approach is to
>>>>>>attempt to provide "uniformity" to achieve
>>>>>>fairness in the assessment process. Below
>>>>>>is a quote from the 2004-05 Ratio
>>>>>>Assessment Manual (
>>>>>>http://tax.idaho.gov/propertytax/pt_ratiostudy.htm):
>>>>>>
>>>>>>MEASURING ASSESSMENT UNIFORMITY
>>>>>>Uniformity determines the quality and inherent equity of property
>>>>>>assessments. Although both the appraisal and the market transaction
>>>>>>are subject to distortion on any individual property, if the
>>>>>>magnitude of this distortion is consistently large, taxes paid by
>>>>>>similar properties in the same area will differ widely. The goal of
>>>>>>a fair assessment program is to reduce inequity of this type.
>>>>>>There are two overall types of inequity that can occur:
>>>>>>1. Inequity between categories.
>>>>>>2. Inequity within a given category.
>>>>>>In the first case, inequity results when the assessment level is
>>>>>>lower in one category than another. This situation becomes apparent
>>>>>>when level indicators from different categories are compared.
>>>>>>In the second case, the distortion is entirely within one category
>>>>>>and is not indicated by measurements of level.
>>>>>>
>>>>>>I don't really like the property tax as a
>>>>>>vehicle for funding public programs - not
>>>>>>because I don't want to support public
>>>>>>programs - but because the property tax is
>>>>>>an extraordinarily difficult tax to
>>>>>>administer. The overhead necessary to
>>>>>>manage an equitable property tax system is
>>>>>>enormous. Without getting into a diatribe
>>>>>>or dissertation on administering a property
>>>>>>tax system, consider the following elements
>>>>>>of the system"
>>>>>>
>>>>>>Must maintain an online-realtime system of all real property transactions
>>>>>>Must maintain a persistent and consistent real property assessment system
>>>>>>Must maintain a means of adjudicating or
>>>>>>resolving individual property assessment
>>>>>>complaints
>>>>>>Must maintain a system of oversight that
>>>>>>monitors and assures that the systems
>>>>>>operated by taxing jurisdictions in the
>>>>>>State is fair and equitable
>>>>>>The property tax is an expensive tax to
>>>>>>manage. For example, in Latah County, we
>>>>>>levied about $5.8 million in property tax
>>>>>>for 2003. Give or take a few $10's of
>>>>>>thousands, the amount spent in Latah County
>>>>>>for management of the Property Tax System
>>>>>>was above $1,000,000 for 2003. This
>>>>>>number is not readily available from the
>>>>>>County's financial statements because the
>>>>>>system is managed across more than one
>>>>>>County department (Assessor's Office,
>>>>>>Collector's Office, etc.), but the
>>>>>>Revaluation program (administered by the
>>>>>>Assessor's Office) spent $457,011 just on
>>>>>>the revaluation program. From my memory
>>>>>>(always a dubious source) the normal
>>>>>>operating cost of the Assessor's office, in
>>>>>>addition to the revaluation program) was
>>>>>>about $700,000 for 2003. Thus, if these
>>>>>>numbers are at all reliable, about $.20 of
>>>>>>every dollar collected in property taxes
>>>>>>was spent in administering the tax. Of
>>>>>>course, this does not include any costs
>>>>>>incurred by the tax collectors office nor,
>>>>>>at the state level, for their oversight
>>>>>>responsibilities. Also, my numbers do not
>>>>>>include the cost of having our elected
>>>>>>County Commissioners serve as the local
>>>>>>adjudicating body for appeal of property
>>>>>>valuations. If you scrutinize the agendas
>>>>>>for last year, you may be surprised at how
>>>>>>much time was spent hearing tax appeals.
>>>>>>
>>>>>>And, by the way, even though we spend a lot
>>>>>>of money on trying to assure that the
>>>>>>property tax is fair and equitable, those
>>>>>>that received their property tax assessment
>>>>>>notices for 2005 know that the system
>>>>>>occasionally requires significant
>>>>>>adjustment. Again I would refer you to the
>>>>>>2004-05 Ratio Assessment Manual for details
>>>>>>about how the assessment oversight works.
>>>>>>Here is that link again -
>>>>>>http://tax.idaho.gov/propertytax/pt_ratiostudy.htm.
>>>>>>
>>>>>>As you dig into the details of the ratio
>>>>>>study and the application of that technique
>>>>>>to properties in Latah County (as well as
>>>>>>other counties) you might want to refresh
>>>>>>your statistical analysis tools -
>>>>>>especially the difficulties of small
>>>>>>samples. I noted that for 2003, in the
>>>>>>assessment of Rural Residential properties
>>>>>>(
>>>>>>http://tax.idaho.gov/propertytax/PTpdfs/rpt_03_county_ratio_study.pdf
>>>>>>) that Latah stats were generated from 11
>>>>>>sales for that year. A sample this small
>>>>>>can be problematic.
>>>>>>
>>>>>>This concludes my thoughts on property tax
>>>>>>assessment and the tax burden on Latah
>>>>>>residents. For me, the conclusion is
>>>>>>pretty straightforward - our property taxes
>>>>>>are rather high and the level of tax
>>>>>>probably influences many potential
>>>>>>businesses and individuals from living
>>>>>>here. The fact that the Moscow - Lewiston
>>>>>>region was the only sector of Idaho that
>>>>>>did not report growth for the year is some
>>>>>>indication of that.
>>>>>>
>>>>>>My next post on taxes will address the
>>>>>>question of property tax exemptions and the
>>>>>>impact of exemptions on tax receipts,
>>>>>>fairness and equity of the tax exemption,
>>>>>>etc. It will be a few days - I have some
>>>>>>yardwork to do.
>>>>>>
>>>>>>Hope this was helpful.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>>No virus found in this outgoing message.
>>>>>>Checked by AVG Anti-Virus.
>>>>>>Version: 7.0.308 / Virus Database: 266.9.5 - Release Date: 4/7/2005
>>>>>>
>>>>>>
>>>>>>_____________________________________________________
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>>>>>> mailto:Vision2020 at moscow.com
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>>>>>>
>>>>>>
>>>>>><http://www.incredimail.com/index.asp?id=54475>
>>>>>
>>>>>
>>>><http://www.incredimail.com/index.asp?id=54475>
>>>
>>>
><http://www.incredimail.com/index.asp?id=54475>
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