The city’s assessed value increased by about $1 billion after last year’s revaluation process.
But what does that mean for taxpayers?
Assessment notices were sent in May. Since then, the city has completed its open book process when homeowners could meet with assessors if they had questions or disagreed with their assessments.
In December, homeowners will receive property tax bills based on property values set during revaluation, City Assessor Michelle Laube said.
Residential property value increased on average 31%, Laube said. Overall property value increased 25%.
The Gazette spoke to Laube to learn more about the city’s revaluation and how it affects taxpayers.
Q: Why did the city choose to go through revaluation last year?
A: The state Department of Revenue requires municipalities to keep their ratios of assessed value to fair market value between 90% and 110%.
The city’s last revaluation was in 2011, and the city’s ratio dropped from 88.2% in 2017 to 82.8% in 2018.
If the city had let its ratio remain outside the limits for three more years, the state Department of Revenue would have forced the city to complete a revaluation or the state would have performed a revaluation at city expense.
Last year was the first year since 2011 the city has had proper staffing to perform a revaluation, Laube said.
She hopes to ask the city council for funding to perform revaluations every two years to keep the city’s assessed value better in line with market value and to keep property value changes more consistent.
The assessor’s office spends about $75,000 more in revaluation years than assessment years, Laube said. The lion’s share of extra expense is postage.
Q: Why didn’t the city review my house in person?
A: It would cost at least $2 million for city assessors to visit all 24,194 parcels each year, Laube said.
Assessors visit homes where building permits have been issued, new construction has been done, property has been transferred, land has been split or other changes have been made.
The city will send an assessor to any property upon request, Laube said.
Q: How does the city determine a property’s market value?
A: The city compiles data on property sales in the city where competitive bidding occurs, where neither seller nor buyer is compelled to act quicker or slower than an average sale and where conventional financing occurs.
Assessors then determine other properties’ market values by making comparisons to comparable properties and making adjustments, Laube said.
Q: Will I have to pay more in property taxes?
A: Not necessarily.
Increased assessed value typically drives lower tax rates. The city’s tax rate for next year has not been determined but likely will decrease, Laube said.
If a property’s value increased more than the city’s average of 25%, the owner might see an increase in city property taxes, Laube said.
The relationship between property values and the tax levy is like a pizza. Bear with us because this is the only way to make property assessments sound sexy.
The city has a tax calculator on its website to help people predict, based on the 2018 tax rate, what they will owe the city in property taxes this year.
Q: How many people appealed their assessments with the city?
A: In 2019, 581 of 24,194 property assessments were appealed through the open book process or city’s board of review. That’s 2% of all properties, Laube said.
Of those, 215 value changes were made, and 24 went to Rock County Court.
Mistakes in data entry happen from time to time, she said, which is why the city encourages property owners to review their information online and schedule appointments with the assessor’s office if they have questions or disagree with assessments.
In 2011, 8% of property assessments were appealed.
Laube believes there were more appeals in 2011 because people thought the recession would have caused greater decreases in property values, but many properties increased from the 2002 revaluation.
Most people understand the housing market now is strong and were not shocked to see values increase, Laube said.