“The market appears to be not yet stable, so if we totally ignore what’s gone on in the first six months of 2009, then we have really done a disservice to taxpayers,” he said. “The market has continued to move away; it’s moved down from what it was at that point of time.”
Nelson said the state considers sales figures from 2006-08 to come up with reappraisal amounts.
However, Nelson said he asked the commissioner to take a harder look at the last half of 2008 and the first half of 2009, in order to get a truer picture of property values.
The value drop does not necessarily mean taxes will drop at the same rate. There are laws in place that protect both taxpayers and the governments and schools that serve them.
“If this were happening in a vacuum, that would be true (people would see a tax cut), but we have issues on the ballot where if they pass they may wipe out any decrease that people would otherwise see,” he said. “The difficulty is there is a reduction factor for each levy. How those overlap makes it pretty difficult to make a generalized statement.”
Farm land
While residential home values in Warren County have plummeted, agricultural property values have skyrocketed, according to the preliminary reappraisal by the county auditor.
Nelson said the combination of higher crop prices and the fact the state readjusted the base for the first time since 1983, agricultural land owners can expect an average 60 percent increase in the value of their land when reappraised values show up on tax bills in January.
“That sounds like a lot, but agricultural land is maybe $100, $200 or $300 an acre, not $1,500,” he said. “It won’t be a 60 percent increase of tax, but a 60 percent increase in value. The range is generally from 3 percent to 129 percent.”
Nelson is working with the state tax commissioner to get the triennial reappraisal percentages he presented for Warren County properties approved. The state estimated home values should drop by an average 3 percent, but Nelson said the reality, looking at sale prices over the past year, is about 10 percent. The lowest average reduction is 5.6 percent in Union Twp., and the highest is 14.5 percent in Carlisle.
Jim Garrett of Garrett Appraisal Service in Lebanon said he doesn’t go by the auditor’s figures when he appraises property. He goes by actual recent sales, meaning his valuations should be similar to the new reappraisal being performed by the county.
A big drop in values does not however correlate to a big tax drop. There is a tax reduction factor that kicks in so both taxpayers and local governments and schools won’t be hit too hard, Nelson said.
When the value goes up from a reappraisal, there is a reduction factor put in place that reduces the effective rate, to not produce more than what was produced the year before, according to Nelson.
“Those reduction factors only apply to voted levies; they do not apply to the inside millage. Conversely, when the value goes down, with the reduction factor the effective rate goes up and roughly the same amount of money that was collected the year before on those voted levies is collected again,” Nelson said.
Nelson said the reappraisal will be in effect until 2012, when the county goes out and inspects properties to determine their value.
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