Smithville TODAY

"Building Bridges for Tomorrow"

Income tax is never due on money never earned.  Nor is sales tax levied unless goods are purchased. 

Not so with real property taxes!  

Year-in and year-out, property taxes must be paid by home owners!  Whether or not you bother to mow the lawn, a County Appraiser’s whim can pick your pocket---legally no less.  Failure to pay can move you to the street!

So at least property owners can expect appraised values to be adjusted downward when the June, 2008 stock market approaches the worst June since the depression and real property sales go negative---right?

Wrong!!!  At least not in DeKalb County Tennessee!

Tennessee’s Division of Property Assessments requires regular appraisal updates reflecting market realities using a formula based on "...the estimate of market value determined by appraisers using construction cost, income data, and comparative sales data since the last reappraisal or update of value."

Did the DeKalb County Appraiser’s office miss this signal? 

In the last two years, Smithville has witnessed a growing list of business closings, job losses and gasoline prices spiking to $4 per gallon. How is it, in the midst of severe economic distress, DeKalb County appraisals defy gravity?  It doesn’t take a mathematics genius to question the numbers as to just how 2008 local appraised values could jump more than 100% in some cases, while real estate markets plummet. 

Consider one Smithville property example that abandons any claim to fair, even-handed taxing authority!

Unimproved residential lot #26 fronts on Allen Ferry Road with an entire west boundary overlooking the backyards of several adjacent houses.  Lot #26 was appraised at $20,400 as of January 1, 2004.  It was purchased at a fair market price of $22,500 on December 8, 2004---$2,100 more than the appraisal.

Three weeks later, January 1, 2005, the DeKalb County Assessor jacked-up the appraisal of this weed-covered parcel to $35,000----a stunning 56% more than the lot’s actual cost a few days earlier.  Three years later, the 2005 appraisal took another leap, this time to $42,000---106% above and beyond the January 1, 2004 fair market appraisal.

Since "...An appraisal is an estimate of the most probable selling price of a property..." and an Assessor "...Is required by state law to verify certain information on real estate sales with buyer and seller...," why is there no line of buyer’s clamoring to offer $42,000 to purchase Lot #26?

What appraiser did an on-site inspection of Lot #26?  When did the inspection take place?  What individual in the Appraiser’s office hiked the appraised value?  Where is evidence of a comparable sale of a nearby residential lot corroborating the excessive appraisal? 

Are records available for review in the Assessor’s office supporting the big jump appraisal?   Would you believe blank slate?  Nada! 

True, any inflated appraisal may be partially offset by the County’s planned tax rate reduction from $1.70 to $1.45 per $100 of assessed valuation. Still, this doesn’t come close to offsetting the increased tax exposure triggered by an appraisal’s 106% inflation!  Also true, excessive appraisals can be appealed to the local Board of Equalization to repair blatant value misjudgments. 

But the problem is not with tax rates or the Board of Equalization.  The issue rests at the door of the County Tax Assessor! 

Time for a reality check!   What credentials qualify a Tax Assessor?

Tennessee’s Division of Property Assessments  recognizes the skills expected of an Assessor: "...Must possess both appraisal and administrative skills to do the job...The Assessor’s job is increasingly demanding in terms of the skills and professionalism required...The level of knowledge and detail required to appraise property for assessment purposes has dramatically increased..."

Makes sense!  Still, no specific professional, educational or certification standards are required "to do the job."  As long as a candidate can persuade a majority of voters to push the button, the County Tax Assessor’s office is up for grabs to anyone whose experience may be limited to full-time circus clowning or even skydiving, a "higher" experience level! 

Understandably, since inflated appraisals raise a sensitive issue in the minds of the electorate when an election looms just around the corner, an incumbent might be tempted to pass the bureaucratic buck to the state under cover of the mandated "Current Value Update." The June 4, 2008 edition of the Smithville Review carried an ad stating "The Assessor Office has no input into the CURRENT VALUE UPDATE...If you wish to discuss your assessment...a state employee will be available to talk with you...call 615-597-5110." 

Taxpayers calling the number referenced by the ad have been advised by that the Assessor’s office is expected to not only give input but also to sign off on the appraisals by sending notices to property owners!  This 2008 ad language departs from the 2005 notice that had invited calls to the county Assessor’s office with the promise "The Assessor’s Reappraisal staff will be available to answer questions."

So what’s going on? 

A County Assessor is required to provide fair, unbiased, real property appraisals reflective of market realities in the neighborhood.  This means regularly scheduled and precisely documented site inspections referencing comparable sales in the context of up-or-down cost-of-living adjustments. An unsubstantiated 106% inflated appraisal on bare land in a time span of little more than three years, doesn’t cut it!  Seat-of-the-pants appraisals based on tea leaves or dice rolls are worthless, economically unfair, and legally indefensible.

The problem is neither Tennessee State law nor DeKalb County’s Board of Equalization. The bottom-line issue points to the fairness of the hodge-podge appraisals mailed to taxpayers by the DeKalb County Assessor and the professional competence of the Assessor.

The buck starts and stops at the desk of the County Assessor.

Shouting curses and hanging up the telephone to shut off inquiry solves nothing. Tax paying voters employ the Assessor.  Eventually, insulted taxpayers have the last word at the ballot box!

No matter how a County Assessor attempts to dodge responsibility facts are, the office possesses arbitrary power to raise or to lower real property appraisals for tax assessment purposes!

Senior citizens living on fixed incomes are particularly vulnerable to a haphazard system.  Even if the home is owned, free and clear, real property tax rises, often outpacing income resources available to the taxpayer.  Eventually some savvy state legislator or county Tax Assessor candidate will push to amend state laws freezing real property taxes on the primary residences of all the elderly, independent of their being subjected to humiliating means tests!

WLJ

Picking the Taxpayer's Pocket

June 27, 2008