Justin’s Post About Property Assessments and the Three L’s
Justin blogged last week about the property assessment and tax changes coming from the general assembly. Reading it was the the only three minutes of vacation that made me wish I was back at work in order to respond more quickly. Justin’s post is rife with an error that is, not surprisingly, fairly common at a think tank such as this: too much theory and not enough practicality. To his credit, he does wonder that he may be missing the point, to which I will respond (in all caps, to emphasize the seriousness of it, but without any anger) that PROPERTY ASSESSMENTS HAVE NEVER BEEN INTENDED TO LEAD TO TAX INCREASES. The system is supposed to use assessments as a method to allow local governments to set the proper and necessary rate not to set a rate and then let the tax money roll in through assessment increases, which is what has happened.
It might be reasonable in theory to say that because people don’t complain when their assessments and taxes go down, they shouldn’t complain when they go up but because the former happens so rarely in Missouri, it is not a practical argument. Furthermore, taxing districts are protected from a decrease in assessments in those rare cases (which we may actually see in the 2009 reassessment, because of the terrible real estate market we are in) so that’s just further proof that it does not happen both ways.
As to less prosperous neighborhoods subsidizing booming neighborhoods with an average system as I have proposed, all I can say is I only wish the system was so consistent as to make that a legitimate concern. The problem people have is with the herky-jerky nature of the comparable sales system, where there is absolutely no consistency between homes in an area. The St. Louis County assessor’s office does a good job of getting the numbers right, for the most part, in the countywide aggregate, but everyone involved with the process knows there is a tremendous amount of variance at the smaller levels of blocks and neighborhoods. Outstate, where they have elected assessors and don’t have certificate-of-value filings, the same thing works in reverse and leads to inconsistently lower property values. My average-based proposal addresses the inconsistency within the entire process, which is one of the primary problems people have with the entire system. And I would keep the appeal process, precisely to avoid homes that have not increased in value from subsidizing those that have.
The reforms coming out of the general assemply are long overdue, and I commend the assembly for taking on this issue.