Property Reassessment

October 18, 2008

2009 taxes may be lower than on estimates

So says chief technical officer for 21st Century Appraisals.

By Steve Mocarsky smocarsky@timesleader.com
Staff Writer
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A spokesman for Luzerne County’s reassessment company predicted that 2009 tax estimates mailed to property owners in their original “Change of Assessment Notices” might have been a little high.

Tim Barr, chief technical officer for 21st Century Appraisals on Friday, said reductions in property values determined at 14,147 informal reviews total about $401 million – about 10 percent of the $4 billion in property value reductions he originally estimated.

Even though the bulk of property value reductions will occur though formal appeals, the relatively low amount of reductions through informal appeals leads Barr to believe the overall reduction in assessed values will be somewhat less than predicted.

And if the county sees a smaller overall reduction in assessed values, taxpayers will see slightly lower property tax bills than expected, he said.

Property values determined at most formal appeals won’t be approved by the Luzerne County Board of Assessment Appeals until Oct. 31.

Several factors in addition to the new assessed values will go into determining what property owners’ 2009 property taxes actually will be.

For example, the tax estimates on the Change of Assessment Notices did not take into account a possible tax increase allowed for municipal, school and county property taxes.

According to state law, counties, school districts and municipalities are allowed to raise taxes (for the year in which a reassessment takes effect) to a point where overall tax revenue would be a maximum of 10 percent higher than the total tax revenue for the previous year.

So if a taxing body received $10 million in tax revenue this year, that taxing body could raise property taxes only by an amount that would allow the body to bring in $11 million in tax revenue next year.

The decision on whether to increase property taxes in 2009 – and the amount of any increase – will be up to county commissioners for county taxes, each school board in the county for school taxes, and each municipal governing body in the county for municipal taxes.

Barr and his staff recently put together data on property value reductions from informal reviews.

Barr said 63 percent of the 14,147 parcels that received value reductions saw reductions of more than $10,000. The other third of the parcels had less significant reductions, he said.

A $10,000 property value reduction is about equal to a $50 property tax reduction, Barr said.

Barr said the average property value reduction among the 14,147 parcels that received reductions in informal reviews was about $28,000 or 18 percent of the average property’s value. Most were residential, with a handful of commercial, industrial and farm, he said.

The highest percentage reduction in property values as a group was that of vacant lots, probably because they were “unbuildable,” he said. Barr said 1,641 vacant lots saw an average value reduction of 48 percent.

Barr said the 177 informal reviews remaining will be completed by Oct. 24.

He said there have been 14,609 formal appeals scheduled through Oct. 31 since the reassessment centers opened. Another 1,583 have been scheduled between Nov. 1 and Nov. 8. Approximately 725 have yet to be scheduled.

The Board of Assessment Appeals and auxiliary boards have 1,680 parcels scheduled for next week, Barr said.

Steve Mocarsky, a Times leader staff writer, may be reached at 459-2005.

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