Taxpayer gouging alleged, refuted

Critics misunderstand numbers
By Vicki Hyatt | Aug 21, 2013

Several taxpayers concerned about county residents being overcharged on their property tax bills requested Monday evening that commissioners take corrective action.

Some of the suggested remedies included ordering a new mass appraisal at a cost of $750,000, hiring a company to spot check the results or sending a letter to taxpayers telling them why their property had been overvalued.

After listening to the concerns and hearing from Tax Administrator David Francis, who said misinformation is driving the complaints, the board took no action.

The N.C. Department or Revenue tracks property sales, and Commission Chairman Mark Swanger asked Francis how closely the values established in the 2011 revaluation were tracking to the actual sales prices.

Francis said that in 2011, the actual sales as compared to established values were at 99 percent at the end of that year, were at 103 percent in 2012 and so far this year, were at 103 percent.

“So properties are selling very close to what they are appraised at,” Swanger observed.

Those critical of the property market values in Haywood County have circulated information online and through social media sites alleging that certain properties in the county are overvalued for taxation purposes, some by as much as 200 percent.

Jonnie Cure read from a list of 119 neighborhoods where she said properties had been assessed above their worth and asked the tax office to send letters to people whose property had been assessed at extreme values and explain why.

An example she and others used was the value set on condominiums at Lake Junaluska, which she said was at 200 percent above market value.

Francis said the 200 percent figure was a market adjustment factor that was applied to four condominiums built in 1956 and, according to the adopted schedule of values, would be assessed at $45,000. Because two of the units had sold for $90,000 before the valuation, thus establishing the fair value, the market adjustment factor was used to bring the similar properties in line. Francis noted the Lake Junaluska property owner was a real estate agent who was well aware of property values and how the revaluation process worked.

Eddie Cabe spoke of the more than 900 neighborhoods set up in the county to establish tax values, neighborhoods that Cabe said appeared could be divided and drawn in any matter that the county wanted.

“It is a controversial way to divide this county up into sections,” he said, noting after the same thing happened in Mecklenburg County, a bill passed by the General Assembly allowed those overcharged to be reimbursed and paid 5 percent interest on taxes wrongly taken.

Monroe Miller said the extent of the revaluation problem in Mecklenburg County came to light after sampling done by an outside firm and urged the county to take this step.

Francis had a power point presentation ready for the board to address the allegations.

The “market adjustment factor” used in neighborhood delineation process did not indicate a property was above or below its value — it is the factor used to bring it in line with other similar properties and thus determine the market value, Francis said. This factor can either be a positive or a negative and is far different from the ultimate market value established on the property, he stressed, adding the market factor number has created confusion for those who don't fully understand the process.

There’s a lot of misinformation out there,” he said, noting the goal of revaluation is to ensure each parcel of property was valued as close to its market value as possible.

“What is being said (about neighborhood delineation) is incorrect,” he said. “It is different than market value. …There is no neighborhood taxed at 20, 30 or even 100 percent above market value. It’s a false statement. The goal is to reach 100 percent of market value.”

Commissioner Michael Sorrells said the revaluation done in Haywood followed the law and is a system widely across the state.

Commissioner Kirk Kirkpatrick, an attorney who handles real estate transactions, explained that a mass appraisal is far different from an individual appraisal, something that costs at least $400. In a mass appraisal, it is more difficult to get specific information on each property, which was the reason a neighborhood delineation method was selected.

The built-in safeguard for property owners is the right to appeal the value established for their home or land, Kirkpatrick said.

Getting a mass appraisal completely accurate is not possible, which is why the appeal process is used to look at specific property owner concerns more closely and make adjustments.

If individual appraisals on each parcel were done, it would cost $20 million, he pointed out.

“The attempt is to make sure everyone is paying taxes on the value of their property. You can poke holes at it all day long, but it is not going to get much better than it is,” he said.