Monday, June 23, 2008

Let's Clarify the Picture on Valuation, Property Taxes, and Budgets

I submitted a column to the OWH. Click below to read it.

A June 23 editorial said accurate valuation by the Douglas County Assessor is the reason for a relatively low number of protests filed so far this year.

OK. But that raises a question.

Last year, in round numbers, a whopping 10,000 Douglas County taxpayers protested their valuations. About 6,000 won some level of reduction from Douglas County commissioners sitting as the Douglas County Board of Equalization.

Was it inaccuracy by the assessor that generated the unusually high number of protests last year? If 60 percent of protesters won, does that mean the assessor valued too many properties too high?

The OWH reacted to the 60-percent success rate by ripping into commissioners as cheesy politicians passing out tax breaks like candy, ruining the valiant work of the assessor.

The commissioners hire a team of professional appraisers to review protests. It's not politicians playing sugar daddy. It's an effort to treat taxpayers as fairly as possible. We generally approve what the neutral pros say is the fair result.

I’m not bashing the assessor. I’ve said many times for the public record that it's virtually impossible to keep all properties in the county equalized at 92-100% of market value. That's why we have a protest process, so there can be some correction if necessary.

My beef is with the one-sided depiction of the situation by the OWH.

The June 23 editorial scolded those of us at the local level who build budgets and set property tax rates, saying “experience has taught” that we too often can’t be “trusted” to exercise fiscal discipline. There was a similar statement in a May 29 editorial:

Midlands homeowners are right to feel angry and pinched, just not at or by county assessors. The spending policies that influence how much people pay in property taxes aren't decided by the assessors. They're determined by the elected officials who set tax levies at the school board, city and county levels.

Yes, the buck stops with commissioners when it comes to finalizing the county budget and setting the property tax rate. But every year, the assessor and other elected officials seek spending increases for their operations. The assessor was among the elected officials who sued the county board a few years ago when commissioners reduced the plaintiffs’ budgets by up to 1.5 percent. The OWH ought to acknowledge that internal pressure from non-commissioner elected officials is a significant force in the budget process.

On the matter of fiscal discipline, in 2005, Douglas County’s property tax rate was 26.8 cents per $100 of valuation. It’s now 24.5 cents. If your valuation has not gone up during that time, then your property tax bill from Douglas County has gone down. For a $100,000 home, that’s a drop from $268 to $245.

If your valuation went up, then at least your property tax bill is 8.6% lower than it would be without the rate reduction.

It’s true that even at a lower rate, the county collects more property tax dollars now than it did in 2005. In recent years, the annual increase in the county budget has been 3-to-4 percent.

Why? In 2005, demand for county welfare services increased 33 percent. In 2006, demand for county welfare services increased an additional 33 percent.

These are the kinds of things county government must deal with. The county is where the rubber meets the road for many government programs. Generally we don’t get to pick and choose which ones to provide. Federal and state governments decide certain services should be provided, and it falls to local governments to deliver, often without any dollars accompanying the mandates.

Where Douglas County is concerned, instead of offering assertions about lack of fiscal discipline, the OWH should salute the productivity and efficiency of elected officials and in-the-trenches workers. They have put commissioners in position to basically keep the county budget in line with inflation in recent years despite unfunded federal and state mandates, and dramatically increasing demands on the social-service and criminal-justice systems.

1 comment:

OmaSteak said...

If pointing to the increased demand for welfare services as justification for the majority of county budget increases, then you're in a heap of trouble. Government has no place in providing "welfare services" by taxing productive citizens to support those who are not. That is and should be the sole responsibility of charity. If the county board has no power to decide which programs are and should be a county government responsibility, then why have the county board??? Let's roll county government together with Omaha's city government and remove at least one level of paid "public servants" from taxpayer paid payroll. And when you start talking about how protests are down this year versus last, don't be dishonest and attribute that to anything other than removing the face-to-face protest option.