Pickens County GA Tax Commissioner and Tax Assessor Office Facing Challenges.

In communities across Georgia, it seems there is a rising tide of disagreement between residents and their tax assessor's office, as tax records fail to keep pace with the decline in home values. And, it wouldn't be surprising to see that trend head this way. In fact, in Pickens County the office of the tax commissioner and tax assessor already seem to have been in the news a fair amount lately, and there seem to be a number of issues through which the tax office and local homeowners are going to have to work in months to come . . .

First, there is the evident decline in home values that is going to have to be addressed sooner or later.

Despite suggestions that Pickens County, Georgia, hasn't been affected by the same forces that have lowered property valuations just about everywhere else in the country -- such as in this recent quote from the Chief Tax Appraiser, “There are distressed or isolated cases, with lower property prices, but we haven’t seen lower prices in an overall indicator” -- anyone who has had to sell a home in Pickens County in the past couple of years may not feel quite the same way.

Aside from the difficulty in selling a home -- period -- most neighborhoods do seem to have been affected to some degree by the slowdown in sales. As reported in my monthly, quarterly, and annual sales data reports, both average and median home sales prices in Jasper GA, do appear to have fallen in the last couple of years. Resales are competing with deeply discounted new construction, lender owned foreclosures, short sales, auctions, and other distress sale situations (which account for as much as 7% of all listings, and 30-40% of home sales in today's market). While these are not technically "arms length" transactions, no matter what anyone argues, they DO affect the market value of neighboring homes.

It's simple supply and demand economics. Too few buyers, too many homes for sale. Add competition from bargain priced properties, and the answer is obvious. Similar products compete via price! Statistical or anecdotal evidence (of which there is plenty) aside, common sense alone leads to a conclusion that this is an environment in which housing prices are prone to suffer.

A likely outcome of these declining values is more Pickens County homeowners appealing the assessed tax value of their home. This is not a reflection on the tax assessor's office, who generally do a good job in their valuation and must work with what information they have on hand in a fluid environment. In this changing housing market, it's not easy to pinpoint exactly how much the value of any given home has declined, and conducting exhaustive re-assessments county-wide just isn't feasible, particularly while conditions remain in flux.

Appeals or returns however, are a good way for the assessor's office to gather this information and get more details from affected homeowners about how a particular property or area has been impacted. (A follow up post will cover a little more on the process for appealing ad valorem property taxes in Pickens County GA.)

Another issue that has recently been put on the table, and with which the tax assessor's office will be dealing, is House Bill 233, which is designed to freeze tax valuations at 2008 assessment levels. Supposedly this would require the assessor's office to track both the frozen and current value of the property. While this legislation is well-intentioned (and I have no issue with freezing any further increases in property valuations for a while!), this tracking system does seem a more complicated way for the assessor's office to have to conduct business -- and one which I see leading to dispute and confusion down the road.

Whether this piece of legislation will have any benefit for taxpayers is also questionable. The Chief Tax Appraiser pointed out that, "tax bills are dictated by budgets" . . . indicating that freezing rates will simply lead to a higher millage rate to match the county's needs. (Of course, the logic of a system in which a budget isn't based on actual or projected revenue, but rather one in which revenue is simply "manipulated" to match expenses, is the topic for a whole different post. )

Valuation freeze or not, I think simply ignoring a drop in home sale prices (or "market value") altogether, is problematic.

Agreed, keeping assessed values falsely inflated will save having to increase the millage rate. Simple enough. But, this is a false reality, which provides two incorrect data sets to reach a desired outcome. This would allow an artificially low millage rate to be set against over-valued properties. At some point this discrepancy would seemingly have to be addressed, otherwise why even bother with "assessed values" and tax calculations, if they're not somewhat based on reality? And oddly enough, this argument isn't used when property values are climbing. Seldom is the opposite claim asserted that leaving valuations alone makes sense, because raising assessed values would just mean lowering the millage rate, and therefore make little difference from a budgetary standpoint. Seems this logic would work both ways?

Another possible trouble spot for the tax office right now, is the recent announcement that the state will not be funding the Georgia homestead relief grant -- the state portion of the homestead exemption that many homeowner's claim each year. This will tack about $160 on to affected taxpayers tax bills, which is a surprise that comes at a particularly bad economic time for many. And, for the tax office, this all comes at a time when they are already faced with increasing delinquencies in collecting ad valorem taxes.

Hopefully, officials will be willing to hear citizens out on their concerns, and the public will display understanding for these challenges faced by the tax office, without it becoming a contentious situation.