The relationship between property values and the tax levy is like a pizza.
Bear with us because it’s the only way to make property assessments sound sexy. Or interesting.
The pizza’s size is based on the money a municipality needs to pay for different services. Each slice represents a property, and each slice contributes its share of taxes to complete the pie.
In this pizza analogy, the slices are irregular. Bigger slices pay more in taxes. Smaller slices pay less.
The analogy is one method city Finance Director Max Gagin uses to simplify the complicated and mundane topic of property valuation.
Public confusion over the issue might arise in the next few weeks as city officials mail assessment change notices to property owners after a nearly yearlong revaluation process.
The first thing residents should understand? An increase in a home’s value does not necessarily mean the owner will pay more in property taxes, City Assessor Michelle Laube said.
The revaluation process began last summer with the aim of aligning property assessments with fair market values. Assessments had fallen to an estimated 82.7% of fair market value, meaning the city was out of compliance with state law, she said.
The revaluation looked at all properties—residential, commercial, industrial. The average residential property value increased by 31%, from $122,200 to $160,800, Laube said.
That surge reflects a tight housing market that was deemed by Realtor.com last summer as one of the hottest real estate markets in the country.
Janesville’s equalized value also rose by 23% from 2015 to 2018—by far the highest among the city’s 14 peer communities.
While the spike in equalized value is a separate issue from the assessment notices, it’s related evidence of strong regional growth that has boosted property values, Gagin said.
The 31% rise in residential values doesn’t mean tax bills will jump by the same percentage.
Some people’s property taxes will increase. Others will decrease, and some will stay the same. The city already has a tax rate calculator posted on its website so residents can see the estimated tax impact of their assessment change.
The exact effect on tax bills won’t be known until the city and other taxing entities, such as Rock County and the school district, finalize their tax rates later this fall, Laube said.
Before residents receive their assessment notices, Laube wants them to know the basics about what they’re getting.
“One of the main pieces to stress: This is not a tax bill. This is just your notice of your assessment change,” she said. “Because a lot of people will misinterpret that that change is a tax change. It’s just the assessed value.”
If residents believe their assessments are incorrect, they can schedule appointments with an assessment worker to discuss them further. Appointments run from June 6 to 26.