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<div>Shelley,</div>
<div><br></div>
<div>You're moving beyond my experience. As county commissioner I
learned a lot about the appraisal/assessment process to fill my duties
as a member of the Board of Equalization but rules of assessment for
property tax purposes are somewhat different than appraisals for
purposes of sale. Idaho law stipulates that assessments are to be
based on the "market value" of a piece of property without
requiring the submittal of real estate transactions to the county for
determining just what those market values might be making for a very
interesting dance.</div>
<div><br></div>
<div>If there are any appraisers or realtors on this list, maybe you
could add something here.</div>
<div><br></div>
<div>Mark Solomon</div>
<div><br></div>
<div>At 12:03 PM -0700 4/9/05, Shelly wrote:</div>
<blockquote type="cite" cite>Semi-Professional Troublemaker..........
at least there are two of you out there. Thanx for the clarification
on which Mark. Too funny.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>So - The asking price for the
Trail 10 acres of $250,000.00 is what the Trail Foundation
thinks it could become worth? Just like we think our
building/buisness is worth 1.3 mil. I understand the "asking
price" could be anything. So if we had our building appraised, it
would be appraised at what it's potential could be one day? Is an
appraisal done on land different than an appraisal done on a
building?</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>You are very helpful Mark and I thank you
for taking the time to educate me on this.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><i>-------Original
Message-------</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><b>From:</b> <a
href="mailto:msolomon@moscow.com">Mark Solomon</a></blockquote>
<blockquote type="cite" cite><b>Date:</b> 04/09/05
11:49:39</blockquote>
<blockquote type="cite" cite><b>To:</b> <a
href="mailto:CJs@Turbonet.com">Shelly</a></blockquote>
<blockquote type="cite" cite><b>Cc:</b> <a
href="mailto:vision2020@moscow.com">vision2020@moscow.com</a></blockquote
>
<blockquote type="cite" cite><b>Subject:</b> [Spam] Re: [Vision2020]
Assessment of the Property Tax</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley,</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>Mark</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>At 11:38 AM -0700 4/9/05, Shelly wrote:
<blockquote type="cite" cite>Do you know if the Trail property will be
assessed/appraised, "as is?" Or, "what could
be?"</blockquote>
<blockquote type="cite" cite>Mark - you are an architect,
right?</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>S</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><i>-------Original
Message-------</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><b>From:</b> <a
href="mailto:msolomon@moscow.com">Mark Solomon</a></blockquote>
<blockquote type="cite" cite><b>Date:</b> 04/09/05
11:33:43</blockquote>
<blockquote type="cite" cite><b>To:</b> <a
href="mailto:CJs@Turbonet.com">Shelly</a></blockquote>
<blockquote type="cite" cite><b>Cc:</b> <a
href="mailto:vision2020@moscow.com">vision2020@moscow.com</a><br>
<blockquote type="cite" cite><b>Subject:</b> [Spam] Re: [Spam] Re:
[Vision2020] Assessment of the Property Tax</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley,</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>I don'tt know how the value was derived.
I'd assume from sale or conversion of similar properties along
Moscow's border.</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>m.</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>At 11:29 AM -0700 4/9/05, Shelly wrote:
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>OOOOOOPS. I previously did say city not
assessors office. I think I need to ask Phil. I will get some
clarification. Sorry.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Do you know how the value was derived of
$250,000.00 for these ten acres?</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><i>-------Original
Message-------</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><b>From:</b> <a
href="mailto:msolomon@moscow.com">Mark Solomon</a></blockquote>
<blockquote type="cite" cite><b>Date:</b> 04/09/05
11:17:04</blockquote>
<blockquote type="cite" cite><b>To:</b> <a
href="mailto:CJs@Turbonet.com">Shelly</a>; <a
href="mailto:dickschmidt@moscow.com">dickschmidt@moscow.com</a><br>
<blockquote type="cite" cite><b>Cc:</b> <a
href="mailto:vision2020@moscow.com">vision2020@moscow.com</a><br>
<blockquote type="cite" cite><b>Subject:</b> [Spam] Re: [Vision2020]
Assessment of the Property Tax</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley,</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>Mark Solomon</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>At 11:11 AM -0700 4/9/05, Shelly wrote:
<blockquote type="cite" cite>Hi Jeff,</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Yes, CJ's is for sale for 1.3 mil. The
assessed value on CJ's building is based on it's income.<u>
Similar</u> to farmland.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>We are in Zone 2 also known as Latah
County.</blockquote>
<blockquote type="cite" cite>Zone 2 Land Grade is as
follows:</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>For bare land and yield:</blockquote>
<blockquote type="cite" cite>Good: $150.00</blockquote>
<blockquote type="cite" cite>Med. $94.00</blockquote>
<blockquote type="cite" cite>Poor: $48.00</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>For productivity:</blockquote>
<blockquote type="cite" cite>Good: $485.00</blockquote>
<blockquote type="cite" cite>Med.: $311.00</blockquote>
<blockquote type="cite" cite>Poor: $137.00</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>In a nutshell:</blockquote>
<blockquote type="cite" cite>10 acres of the "primmest"
AG/FOREST land goes for $4,850.00 per acre.</blockquote>
<blockquote type="cite" cite><i>Far cry from
$250,000.00.</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>40 acres of the "primmest"
AG/FOREST land goes for $194,000.00 per acre.</blockquote>
<blockquote type="cite" cite><i>Far cry from
$1,000,000.00.</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Now, if you valuate AG/FOREST land on
it's "potential value"<b> with</b> added infrastructure, not
it's current value then the Trail "gifted" land is easily
worth over a million.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Shelley/Phil's wife</blockquote>
<blockquote type="cite" cite>Yes Phil will get his own email account
shortly. I hope! :)</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><i>-------Original
Message-------</i></blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite><b>From:</b> <a
href="mailto:dickschmidt@moscow.com">Dick Schmidt</a></blockquote>
<blockquote type="cite" cite><b>Date:</b> 04/09/05
09:55:30</blockquote>
<blockquote type="cite" cite><b>To:</b> <a
href="mailto:vision2020@moscow.com">vision2020@moscow.com</a>; <a
href="mailto:jeffh@moscow.com">Jeff Harkins</a></blockquote>
<blockquote type="cite" cite><b>Subject:</b> Re: [Vision2020]
Assessment of the Property Tax</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Jeff,</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>Dick Schmidt</blockquote>
<blockquote type="cite" cite> </blockquote>
<blockquote type="cite" cite>----- Original Message -----</blockquote>
<blockquote type="cite" cite><b>From:</b> <a
href="mailto:jeffh@moscow.com">Jeff Harkins</a></blockquote>
<blockquote type="cite" cite><b>To:</b> <a
href="mailto:vision2020@moscow.com">vision2020@moscow.com</a><br>
<blockquote type="cite" cite><br>
<blockquote type="cite" cite><b>Sent:</b> Saturday, April 09, 2005
9:10 AM</blockquote>
<blockquote type="cite" cite><b>Subject:</b> [Vision2020] Assessment
of the Property Tax</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>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.<br>
<br>
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:<br>
<br>
Required revenues / Total assessed valuation = Tax levy
rate</blockquote>
<blockquote type="cite" cite><br>
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):<br>
<br>
<font face="Courier New">MEASURING ASSESSMENT UNIFORMITY<br>
Uniformity determines the quality and inherent equity of property<br>
assessments. Although both the appraisal and the market
transaction<br>
are subject to distortion on any individual property, if the<br>
magnitude of this distortion is consistently large, taxes paid
by</font></blockquote>
<blockquote type="cite" cite><font face="Courier New">similar
properties in the same area will differ widely. The goal of<br>
a fair assessment program is to reduce inequity of this type.<br>
There are two overall types of inequity that can occur:<br>
1. Inequity between categories.<br>
2. Inequity within a given category.<br>
In the first case, inequity results when the assessment level is<br>
lower in one category than another. This situation becomes
apparent<br>
when level indicators from different categories are compared.<br>
In the second case, the distortion is entirely within one category<br>
and is not indicated by measurements of level.<br>
<br>
</font>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"</blockquote>
<blockquote type="cite" cite><br></blockquote>
<blockquote type="cite" cite>
<ul>
<li>Must maintain an online-realtime system of all real property
transactions
<li>Must maintain a persistent and consistent real property assessment
system
<li>Must maintain a means of adjudicating or resolving individual
property assessment complaints
<li>Must maintain a system of oversight that monitors and assures that
the systems operated by taxing jurisdictions in the State is fair and
equitable</ul>
</blockquote>
<blockquote type="cite" cite>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.</blockquote>
<blockquote type="cite" cite><br>
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.<br>
<br>
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.</blockquote>
<blockquote type="cite" cite><br>
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. <br>
<br>
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.</blockquote>
<blockquote type="cite" cite><br>
Hope this was helpful.<br>
</blockquote>
<blockquote type="cite" cite>
<hr></blockquote>
<blockquote type="cite" cite><br>
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4/7/2005<br>
</blockquote>
<blockquote type="cite" cite>
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