Assessor: odd year means reappraisal
In the world of Missouri assessors, even numbered years are the time to update files on new construction and remodeling while odd numbered years, such as 2017, are called a “Reappraisal Year.”
Earlier this month – Vernon County Assessor, Cherie Roberts – sent out notices to owners of some 2,260 properties, informing them of an increase in the fair market value.
Letters were sent to those whose fair market value increased $2,600 or more. This equates to a $500 increase in assessed valuation.
And what would that be in terms of an increase in actual taxes paid?
Said Roberts, “That would $25. If reappraisal would increase someone’s taxes by $25 or more, we notified them by letter.”
“A lot of people come into our office and because they don’t understand how property assessment works, they’re very upset,” said Roberts. “If I can explain to them how the system works, they may not leave happy but at least they understand how and why things are done and I feel I have done my job.”
After going through the reappraisal process in 2015, of the 14,838 properties in Vernon County, only about 80 had any significant increase in fair market value, while in 2011, there were 6,000 which had a substantial increase.
That year, some 1,200 people requested an informal hearing with Roberts, which is the first step in the appeal process. And while most of them were nice, a number of people yelled or cussed out the staff over the phone or in person.
Said Roberts, “I don’t mind if they do that to me because I’m the elected official – the buck stops here – but when people are mean to my staff it hurts me. After all, my staff doesn’t make the decisions, they are just doing their job and following procedures, most of which are set by state statute.”
As defined by various state laws and the Missouri State Tax Commission, the fair market value is, in part, determined by any increase in the cost to build, in this area, as compared to the last reappraisal year, two years earlier. Roberts uses 70 percent of this cost in her computations.
“There are two other factors we use,” said the assessor. “The first is the overall increase in what homes are selling for in this market. Meaning, are prices of homes and farms going up, down or are they relatively flat.”
The other factor is found by taking a particular property and seeing what something comparable sold for recently.
Vernon County has eight grades of farmland, ranging from the poorest – valued at $31/acre – to river bottom land which is grade number one and has a value of $1,035/acre.
Said Roberts, “Since our market is so much smaller than Kansas City, Springfield, Joplin or St. Louis, we have to use sales which have occurred for the past three years, in this case, 2014-2016.”
And how may sales were there in Vernon County over those three years?
“A total of 524,” said Roberts. “A larger number of sales means our analysis is more statistically valid.”
According to state statute, the value set on residential properties must be 100 percent of the fair market value. A statistical analysis of those 524 properties revealed her office’s valuation was 87.453 percent.
“The state tax commission allows us to be within 10 percent of the fair market value,” said Roberts.
This means the assessor’s office valuation must be within a range of 90 to 110 percent of fair market value.
“Let me tell you right now, I will never go over 100 percent of value,” said Roberts. “I always aim for about 95 percent of fair market value.”
Why not aim for 90 percent?
This year, every county assessor in Missouri has to do a reappraisal and send those numbers into the state tax commission.
“But next year, the STC will send out teams of appraisers to all 114 counties plus the city of St. Louis,” said Roberts.
Those teams will randomly sample 25 to 30 properties in each county, perform an appraisal on each parcel, coming up with their own ratio which they will compare to the one the county office had set.
“And while those two should be fairly close, they typically vary from the county’s numbers,” said Roberts.
“I’ve seen it where an assessor said, ‘I can’t raise the fair market value because people will come in droves and scream at me,’” said Roberts. “And the state tax commission will listen and then send you a letter telling you to get your values up or else. Right now, there are counties so out of compliance they’ve lost their state funding.”
The state annually pays every assessor’s office an amount for each parcel in the county. In the year 2000, the amount was $6.20 while in 2017 it is $3. These amounts help to fund the office.
Since 2011, Vernon County has been using 70 percent of any increase in the cost to build index. For the 2017 reappraisal process, the STC suggested Roberts raise this to 80 percent.
“I told them I would only go to 75 percent.,” said Roberts. “Doing this brought the ratio up to 94 percent. I think that’s being fair to the people here and it’s a number that’ll survive next year’s test by the state.”
Depreciation will sometimes offset part or all of any increase, said the assessor.
Throughout the interview, Roberts repeated a mantra she learned decades ago. “Your values are only as good as your data. That’s why we go out and look at properties so often.”
As of Thursday, out of 2,260 notified of a net increase in the fair market value of their property, 176 took the first step in the appeal process, which is to speak with Roberts. Of those, 70 provided additional information which led to a reduction of the fair market value while 106 had no changes.
So far three people have applied to have their case heard at the next level, which is a hearing before the county’s Board of Equalization, which meets later this summer.
Pointing to the computer in front her, Roberts said, “The records on this are full of numbers, measurements, values and the like,” said Roberts. “But when you get out in the field, all that changes. They become homes and farms and come to life. Really, this job is about people and the place they call home.”