The Spokane County assessor’s office undervalued scores of properties for years, according to a state audit for 2008 and 2009.
The report released Monday says new construction on 157 properties in the Cheney area was added to the tax rolls seven years late on average during the two-year audit period. Seventy-one of the parcels had a value of more than $100,000, according to the state auditor’s office.
The tardy assessments were pointed out in a whistleblower complaint by former appraiser Debi Mason. In addition, state auditors found 22 parcels – in a sample of 85 – that were added to the tax rolls four years late on average.
Auditors blamed the late Cheney appraisals, in part, on staffing shortages that prevented reassignment of an injured appraiser who was unable to walk and take measurements.
They also cited policies of not inspecting incomplete construction with an estimated value less than $50,000 or construction that is less than 40 percent complete.
Assessor Vicki Horton, who took office in January, said the 40 percent rule reflects the long-standing practice of numerous assessor’s offices in Washington. It is intended to catch structures at the point they become a weather-protected shell.
State officials called for Horton to supply evidence that the threshold is appropriate.
She and Chief Deputy Assessor Byron Hodgson said incomplete structures are rarely sold, so it will be difficult to prove that little tax revenue is at risk.
However, Hodgson found a sale last May in which a substantially complete house sold for just $35,000 more than the $100,000 assessed value of the raw land.
State auditors said they didn’t find any untaxed properties, and they were unable to determine how much tax revenue was lost because of late appraisals.
Former Assessor Ralph Baker said last spring, when the issue surfaced publicly, that failure to appraise new construction soon enough was a problem he inherited when he took office in 2005.
Baker said he responded by arranging for most building permits to be delivered electronically as soon as they were filed. Horton said she has gone a step further, assigning a supervisor to make sure each permit is reviewed.
Horton said the problem of getting new construction on the tax rolls resulted from “a whole bunch of errors that possibly could have been caught and weren’t.”
“I don’t want to get into a blame game,” she said.
Baker and Mason couldn’t be reached for comment.
On another issue, Horton said she has implemented a system to detect appraisal errors that state auditors found in 21 of 32 parcels valued at $2,000 or less. The parcels had taxable structures worth $4,400 to $275,000.
Auditors said appraisal supervisors failed to detect computer coding errors that caused the inaccurate values. Horton now uses a spreadsheet to spot parcels with values much higher or lower than usual.
State officials also found fault with Baker’s decision to direct his staff not to require some applicants for tax exemptions to provide proof of incomes less than $22,000 in 2006 or $23,000 in 2007.
“As always,” a supervisor advised in an email, “if something seems fishy, by all means request the info.”
Horton said she now requires all applicants to provide proof of income as required by state law.