Equalization Hearings, Tax Year Yield Lessons

The Kootenai County Commissioners recently concluded the Board of Equalization hearings on property assessments. We scheduled 940 appeals and we actually heard 794 - either written or in person - representing 1,452 parcels.

On 819 parcels, the tax assessment that had been placed by the assessor was sustained, but the board lowered 443. Thirty percent actually got some type of reduction.

Those 443 changes represented a reduction in assessed valuation of $6,873,357, a net impact of taxes shifted of approximately $98,000.

We say “shifted” because taxes are actually determined by the total of the taxing districts’ budgets, and when you reduce one property’s assessed valuation, it merely shifts that burden to some other taxpayer.

Some lessons stood out from the hearings.

One is that a lot of people are very concerned about taxes. That shouldn’t surprise anyone. One thing that is somewhat of a surprise is that so many people felt when they got their assessed valuation that their tax bill would be a direct reflection of that assessment. As we mentioned above, taxes are determined by the cost of government. Kootenai County elected officials are working very hard to reduce that cost.

One other lesson: Most appellants could have gone to the assessor’s office first and corrected many misunderstandings or mistakes. Kootenai County property owners should keep that in mind next year. If they honestly feel the assessment they receive then does not reflect the true value of their property, they should make an appointment as soon as possible with the assessor’s office to review it.

Some people just seem to be going through the appeal process for drill. We had a number of occasions where the value that had been placed on the property by the assessor’s office was actually less than had been paid for it. The assessor is required by law to assess the property at fair market value.

Overall, we found that the appraisers had done a professional job. But they are only human, and when you have over 60,000 parcels of property in the county, it’s certainly easy to make some mistakes. If you compared all the sales in real estate to the market value that had been placed on it, you’d find it was assessed at 88 percent of market value.

Unfortunately, a group that was very active in encouraging people to file appeals gave some folks the unrealistic expectation that just by appealing, everyone got a reduction. That really wasn’t the case.

The Board of Equalizations’ responsibility is to see if the property has been assessed at fair market value and fairly when compared with neighboring properties.

One of the biggest concerns that came out of this is the impact the taxes have on those of modest income and longtime residence. Through no fault of their own, the value of their property has grown extraordinarily and the taxes have become a burden.

There are some areas of relief for this situation, such as the circuit breaker. If a person’s net income is under $18,000 and they are 65 years of age or have some physical disability, they can apply and the state will compensate the county for a good portion of their taxes, thereby relieving them. Taxpayers must file every year for circuit breaker relief.

The bottom line in all of this is:

1. We need to keep working very hard at all levels of government to bring the cost down.

2. Some tax issues must be addressed by the Legislature.

We need to raise the amount available through the circuit breaker program. We need to make sure that Kootenai County is getting its fair share of sales, gas and liquor taxes. We need to address such issues as local option taxing authority and the ability to levy impact fees. Some of the exemptions now given for sales tax must be removed.

The object must be to reduce the burden now placed on property owners.

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The following fields overflowed: BYLINE = Dick Compton, Bob Macdonald and Richard Panabaker Special to Roundtable