State rejects commissioners
The State Tax Department has rejected an attempt by the Morgan County Commission to reduce real estate assessments, saying the commissioners lowered assessments too much.
If county officials want to lower tax bills, they should cut the tax rates levied by the commissioners, the school board and towns, according to the State Tax Commissioner's Office.
The decision by Tax Commissioner Christopher Morris came in response to the Morgan County Commission's order last month to lower the modifier used in assessing property values.
The county modifier is based on average local construction costs and is a factor in arriving at building values.
Morris said lowering the modifier from 1.75 to 1.50 reduced assessments too much. He maintained that it was his duty to ensure that all property in the state is appraised at its true and actual value to ensure uniformity and fairness in all 55 counties.
Morgan County property owners will now have their property assessed at a value that more closely approximates fair market value, Morris insisted.
The public announcement by Morris ended with the words: All levying bodies have the authority to lower the levy rate in order to reduce the tax burden on property owners.
At their February 28 meeting, the Morgan Commissioners unanimously voted to decrease the county modifier from 1.75 to 1.65 in calculating assessments for the tax bills that property owners will receive in July.
This came on the recommendation of Assessor John Allen Swaim, who said he had discussed it with state officials and believed they would approve the reduction.
But after Commissioner Brenda Hutchinson left the meeting, thinking it was over, Commissioners Glen Stotler and Thomas Swaim voted to further reduce the county modifier to 1.50, as it was last year.
On March 17, the State Tax Department asked for documentation showing the reason for the commissioners' decision.
In a letter to the commission and a press release on Thursday afternoon, March 20, Tax Commissioner Morris said the commissioners hadn't supplied adequate evidence to justify their decision on February 28.
All of the documents supplied to the state were letters from local real estate professionals and lenders dated March 17 or later and couldn't have been used by the commissioners to make their decision, Morris pointed out.
Commissioner Stotler had told Morris that their decision was based on their knowledge of the decline in home values in the local real estate market and from information presented to them at Board of Equalization hearings.
But Morris said none of the supporting letters presented evidence that real estate was over-assessed here as of the assessment date of July 1, 2007.
He said that the Tax Department's own review of real estate sales from July 2006 to the present showed property is under-assessed in Morgan County.
Property appraisals used for tax purposes are supposed to come within 10% of fair market value. The tax assessment is then 60% of the appraised value.
Assessor Swaim has gone on record opposing the two commissioners' decision to lower the modifier to 1.50 due to state guidelines.
Morris' letter to the commission referred to the State Code which holds that if a county assessor or commission refuses to make corrections in valuations of property assessments to comply with state law that it constitutes grounds for removal from office.
Commissioners Stotler and Swaim voiced their objections to the tax commissioner's decision during Friday's commission meeting.
How do you justify that decision when the market has been on the decline since June of 2006? Stotler asked.
Stotler maintained the state is forcing assessors to get local property values up so school boards take in more money and the state doesn't have to provide as much support for local school systems.
The regular school levy is set by the Legislature and cannot be changed locally, though the special school levy is set by the local board.
Stotler also thought it was inappropriate that the State Tax Department faxed the letter ordering them to change the county modifier after the office had closed last Thursday.
Commissioner Swaim felt they had sent more than enough documentation supporting their decision. He thought his time had been wasted.
Changing it was a problem
Commissioner Hutchinson felt that if they had left the original modifier change stand at 1.65, the tax commissioner may have approved it. Changing it after the fact created a problem, she thought.
Stotler believed their decision to lower the modifier was correct.
Swaim said he has noticed that houses are overpriced and prices inflated more this year than before.
Hutchinson responded that housing prices have been inflated for several years.
County officials are reworking their budget and proposed property tax rates.
They were to hold a special meeting yesterday to review their budget and discuss an adjusted tax rate for county government.