DeKalb Did the Right Thing
[The following was sent to the author of the Atlanta Journal-Constitution article here.]
What DeKalb did appears to be exactly CORRECT…. at least, if your interest is in fairly valuing property.
The consideration of foreclosures and other distressed sales does not produce a true market value; it does not contribute to equity and fairness in property taxation.
SB-55 not withstanding, DeKalb did the right thing when it considered available Fair Market Value sales over, or instead of, distressed sales in its valuation of property.
Remember… the goal is the fair and equity valuation of property; not the across-the-board reduction of values. "Fair Market Value" is what it is… the question to DeKalb assessors should NOT be "why didn’t you consider distressed sales" but "did you accurately follow standard mass appraisal practices"?
It is disingenuous for Rep. Lindsey to simply assume that values have decreased significantly in DeKalb and to call the county’s valuation process "shenanigans."
There is no direct link between foreclosures and value. Just because one or many homeowners fail to honor their financial commitment does not necessarily mean that their homes or the homes of their neighbors decrease in value. If there is sufficient demand to keep sale values steady, then it does not surprise me that values have not fallen significantly, if at all.
It is also incorrect to compare DeKalb to any other county. I would expect that the housing supply to be lower (fewer housing construction starts) in DeKalb than in, say, Gwinnett. With the supply being lower, there would be less downward pressure on values. Contrast to Gwinnett, where there is probably a huge housing glut. It makes sense that values would fall as demand drops.
Gwinnett made– in my opinion– an "administrative decision" in the face of thousands of appeals to offer across-the-board assessment reductions to many neighborhoods, in the hopes that many would not pursue their appeals further. But, not everybody received a reduction. The county apparently found sufficient "Fair Market Value" evidence to reduce values less or even not at all in many areas.
Finally… Rep. Lindsey does not understand the property tax process. He is the author or sponsor of several bills that will, if passed, cause great harm to Georgia’s tax system and taxpayers:
SB-55 encourages assessors to violate time-tested mass appraisal standards and ignore Fair Market Value;
HB-233 (temporary assessment cap) incorrectly and artificially depresses the Net Tax Digest which forces local officials to raise the tax rate, negating any tax benefit. It promotes inequity in value. Thankfully, the law’s life is only three years but, if the economy rebounds, property owners will be seriously harmed;
HR-1 (permanent 3% assessment cap) was, thankfully, stopped by the Democrats. This resolution to amend the constitution would have "constitutionalized" unfairness. If passed, it would have forced higher tax rates on those homeowners less able to pay while giving a huge tax break over time to the owners of higher-valued, more desirable homes. I can prove this mathematically and did so to Rep. Lindsey… which proof he ignored.
There is only one way to protect property owners from higher tax bills resulting from higher assessments and promote fairness and transparency in the tax process… require cities, counties and school boards to simply "do the math." A flaw in the current tax law allows local officials to adopt any tax rate they choose, regardless of their actual revenue needs. A simple change to the law– requiring taxing authorities to follow the procedure for calculating the millage rate that has been taught by the Department of Revenue for decades– would solve the major problems with the tax process without harming taxpayers.
Your Comments