Franklin County Assessors Office Why Annual Revaluation Steve

Franklin County Assessor’s Office Why Annual Revaluation Steve Marks Franklin County Assessor

Mid-Columbia news Franklin County assessors to re-evaluate properties every year Published Monday, December 31 st, 2007 JOE CHAPMAN HERALD STAFF WRITER Franklin County residents will begin seeing their properties reassessed by the county assessor's office every year starting in 2008. The frequency will be a change from the assessor's previous schedule of re-evaluating a quarter of the properties once every four years. "It promotes uniformity for all taxpayers so you don't have one area of taxpayers paying on a value that's different from another area of taxpayers, " said Franklin County Assessor Steve Marks. While some may cringe at the thought of annual reassessments, Marks said the upside is that the changes in value should be less abrupt. For instance, instead of a property value staying flat for three years, then going up 40 percent in the fourth year, it may increase 10 percent each of the four years. Adjusting values annually makes the value changes more predictable for residents, Marks said. "That's one of the big issues in a lot of the property tax initiatives that go around: People want predictability in property tax, " he said. John Gurtisen, who lives in the 2600 block of West Margaret Street in Pasco, said he wouldn't have any complaints about annual reassessments. He expects to see increases in his property values because of the improvements he has made, he said. This year, he spent $10, 000 installing a new roof, fence and shed. Even on a four-year schedule, the assessor's office typically would re-evaluate properties the same year improvements were made, Marks said. Gary Hart, a farmer outside of Connell, said his concern is that the assessor's office wouldn't be as quick to lower values in a downturn as it would be to increase them. Crop values are factored into farmland values in Franklin County, and the crop prices can be especially volatile, Hart pointed out. Marks said his office would be just as responsive to downturns as increases. "Whatever the market says, we'll respond. And if it goes down, we'll go down, " he said. Benton County residents already have had their properties reassessed annually for more than a decade. In all, 18 Washington counties are on annual reassessments, and 19 reassess values once every four years.

What is the Assessor’s job? l Washington State law requires that Assessors l l Assess all real and personal property in the county at 100% of true and fair market value in money, unless specifically exempted by law Fair market value or true value is the amount that a willing and unobligated buyer is willing to pay a willing and unobligated seller

Scope l The listing of all taxable real and personal property within the geographic boundaries of Franklin County are within the office’s jurisdiction, including property within incorporated cities.

Real Property l l Includes land, improvements to land, structures and certain equipment fixed to structures Assessor values property using one or more of the following methods l l l Market or sales comparison Cost Approach Income

Personal Property l l The primary characteristic of personal property is mobility Personal property includes furnishings, machinery and equipment, fixtures, supplies and tools Most personal property owned by individuals is specifically exempt. If these items are used in a business, personal property tax applies

What else is the Assessor’s office responsible for? l l Administration of exemption programs such as senior citizen and non-profit Administration of special programs l Open Space l l l (Farm & Agricultural, Open Space, and General) Historical Restoration Administration of levy process

History of Significant Changes in the Property Tax System l Revaluation Act of 1955 l l property reval cycle established at a 4 -year interval 1971: WAC 458 -07 -015 l Legislation allowing annual updates without physical inspection if appropriate statistical data is available

History - continued l 1982: Additional law changes l l Allowed counties with an annual reval plan to lengthen the period between physical inspections from once every 4 years to at least once every 6 years 1995 – 2008: Advances in technology l Franklin County Assessor Office switched from a paper environment to a PC environment and implemented CAMA systems and other technology that will allow us to change from a 4 -year reval cycle to an annual cycle.

? ? Annual Revaluation? ?

Previous Assessment Cycle l l l 4 -year Reval Cycle 2004 – 2007 County divided into 4 areas Each area inspected and revalued once every 4 years Results in different levels of assessed values Distribution of some tax levies are not at the same level

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Annual Reval Frequently Asked Questions l l l Why is Franklin County changing from the 4 year reval cycle to an annual cycle? How will it impact the property owners and tax payers of Franklin County? How will it affect my individual property?

More Questions l l l Does an annual reval mean more taxes for Franklin County? Will an annual reval help any taxing districts collect more tax? When will this change occur?

l Why is Franklin County changing from the 4 -year reval cycle to an annual cycle? l How will it impact the property owners and tax payers of Franklin County? l How will it affect my individual property?

Benefits of an Annual Reval l Uniformity l l Level of assessment l l All property is closer to market value Tax burden distributed more equitably Predictability l Helps taxpayers and taxing districts

Uniformity l l l All property is assessed every year at market value Particularly important if market values begin to decline Assessed values are not “fixed” for 4 years

Level of Assessment l l Tax burden is distributed more equitably Particularly important for county-wide levies such as the: l l l state school levy county levies other levies that cross area boundaries

Predictability l Large increases in assessed values that result from a 4 -year cycle are: l l l difficult for taxpayers to accept misunderstood (30 -35% increase in A/V must equal 30 -35% increase in taxes) result in the area that has just been revalued carrying a larger share of some taxes than the other 3 areas

Annual Reval Still Subject to Tax Limits l Statutory Rate Limit l l Limits regular levy of each taxing district $5. 90 Limit l Aggregate regular levy rate of all senior and junior taxing districts cannot exceed $5. 90

Annual Reval Still Subject to Tax Limits l 1% Constitutional Limit l l State Constitution limits the regular (non-voted) combined tax rate to 1% or ($10 per $1, 000) of A/V Initiative 747 l Taxing districts regular levy limited to 101% of highest levy since 1985, plus amounts attributable to new construction. Prior to I-747 this was 106%

Iniative 747 l l l I-747 limited the amount a taxing district may levy, but did not affect assessed values Some taxing districts may have “banked levy capacity” that allows them to increase their budgets more than 1% Voter approved special levies are not affected by the $5. 90 limit, 1% limit and I-747

Does an annual reval mean more taxes for Franklin County? l l l No. Franklin County will not receive more property taxes by changing to an annual reval The levy rate will decrease as a result of the assessed value increasing

Will an annual reval help any taxing districts collect more tax? l l Possibly. If a district is at it’s statutory limit For example: A Fire District is at their limit of $1. 50 and as a result cannot increase their budget by the 1% allowed by I-747 and the districts value increases enough to lower their rate to less than $1. 50, it would allow the district to ask for the additional 1% they would not have received without the new assessment.

Annual Reval – A goal we have been working towards l Standards, Accountability & Reorganization l l l Improving our level of accuracy on property characteristics. Improving our review process Using technology l GIS (Geographic information system) l l Computerized mapping Color Aerial photos CAMA (Computer assisted mass appraisal) Laptop/Tablet computers for field appraisers

Annual Reval Plan l l Starting in 2008 - revaluation will be done annually 1/6 of property in the county will be physically inspected and updated to market value All property that is not physically inspected must be statistically updated annually New 2008 assessed value used to calculate taxes owing in 2009

ANNUAL REVALUATION PLAN

Historical Information

I-747

l. Questions? ?