By Patrick Anderson
Recently the Brunswick News published an article entitled "County expects shortfall" reporting that local tax revenues are declining. This is not surprising given the current economic conditions. However, there is a remarkable statement in the article that asserts: "property tax collections remain strong!"
Here is a direct quote from the article published April 29, 2009:
"Building permit revenue has declined by about two thirds from what was projected, a reflection of the stagnant housing market and poor retail sales. But not everything has taken a plunge. Property tax collections remain strong and the county expects it will have at least a 99 percent return."
I cannot be the only one scratching his head over that last statement. Presumably the information comes from local property tax authorities. The ISLANDER reported a similar statement from Glynn County Finance Director Phyllis McNichol back in late January (CLICK HERE for the article). So my question to Glynn County is: How can property tax collections remain strong in the midst of the worst real estate market since the early 1990's?
A partial answer is that many Glynn County residential properties are protected by the Scarlet Williams homestead exemption. This allows Glynn County property owners who live in their residences to be taxed at a "frozen" value based on when they filed for the exemption. So even though their value is dropping, they are likely paying taxes on an even lower value. So collections could easily stay the same for those with the exemption.
But that does not explain why there has been no reduction in tax collections from the thousands of parcels who do not qualify for homestead exemption ... commercial properties, unimproved lots, acreage, second homes, rental properties, vacation homes, etc. The owners of these properties are the ones with the most at stake when property values change. And these properties have been some of the hardest hit by the real estate crisis.
Most of us understand the laws of supply and demand: if supply goes up and demand goes down, prices plunge. The supply of Glynn County residential inventory has risen rapidly from 0.94 years supply in December 0f 2007 to the current 2.82 years supply (1.74 on the Mainland and a shocking 5.59 on the Islands where we a high percentage second and vacation homes ... CLICK HERE for the full report)
The National Association of Realtors maintains that the housing inventory is balanced between buyers and sellers when there is a six months supply (or 0.50 years). At the current 2.82 years supply, it's absolutely ludicrous to maintain that values have not declined in Glynn County.
Speaking of the NAR, even their chief economist Lawrence Yun is commenting on the reluctance of local taxing authorities to lower values (see the article "Sticky Local Property Tax" elsewhere in this issue, or CLICK HERE).
When values go down, the local tax assessor has a duty to adjust every parcel to fair market value. That's the law. So how is it that during the most depressed real estate market since the early 1990's, Glynn County "property tax collections remain strong?"
The only logical answer is that the Board of Assessors is returning property at higher than fair market value. As a taxpayer advocate who has appealed dozens of parcels on behalf of over-taxed property owners, I have found this to be almost universally true, especially on St. Simons Island where there are a higher percentage of owners not protected by homestead exemption.
Not too long ago you could roll a cabbage down aisle three at Harris Teeter and clip the ankles of about five realtors (myself included). Today you will only hit one ... the other four are now ex-realtors cruising the aisles at Winn-Dixie.
Comedy aside, there are too many people losing their property through foreclosure (almost 4 times the normal level ... CLICK HERE for the report), too many realtors looking for new jobs, and too many construction workers desperate for a paycheck for property values to "remain strong." It's an economic impossibility.
Yet the County Board of Assessors office invests itself in denial, forcing taxpayers to fight for fair market value through a cumbersome and one-sided appeals process. The assessors have taken a very stubborn position when it comes to lowering values in this declining market.
If you took my advice and filed for a lower value in 2009, you are about to find out exactly how stubborn they can be. I urge you to fight with all your might for fair market value. Please let me know if I can be of assistance.
Email the author at Patrick@PatrickAnderson.net
Wednesday, May 6, 2009
Subscribe to:
Post Comments (Atom)
2 COMMENTS:
I have personally seen, time after time, the obstinate, arrogant and condescending attitudes and actions of the Board of Appeals. An honest property taxpayer makes an honest case expecting and deserving to be heard - yet it is a hearing in form only, with the assessors themselves bragging between hearings that the board 'rubber stamps' all their decisions. It is a travesty, and County Government would do well to remember the impetus behind the original Tea Party in Boston.
No, in reality no one will seriously rise up in rebellion over a property tax bill; but it is unwise for any worker - government or otherwise - to feel immune from the necessity of being fair and impartial.
Well said St Simons girl. There are very many taxpayers frustrated like you who are not being heard. My advice on tax appeals is to skip the Board of Equalization and opt instead for an arbitration hearing. Most people don't realize you can do that.
Post a Comment