Monday, May 10, 2010

Lawmakers tout assessment reform

Early on during the 2010 legislative session, SB 346 faced opposition from some officials about allowing year-round assessments. Their argument was that it would be too difficult to budget for when you have an unknown number of people who could appeal their value at any given time. But after scrapping that part of the bill, the Senate passed the bill unanimously.

The House wasn’t completely satisfied with the language in the bill that came over to them. They cleaned up the legal wording, inserted clauses to encourage electronic notices of assessment, and changed the Senate’s proposal for property value arbitration. An overwhelming majority of representatives (137 to 7) voted for the House substitute.

Now, any initial disagreements appear to be water under the bridge as state legislators head back home to highlight legislative accomplishments during the 2010 session, especially SB 346. Here’s a sampling of what state legislators are telling their voters:

Sen. Bill Heath (R-Bremen) declared, “Georgia’s property owners triumphed with the overwhelming bi-partisan support of Senate Bill 346.”

Rep. Lee Thompson (D-Lawrenceville) announced to his constituents that SB 346 passed and “is aimed at protecting taxpayers from unfair assessments and guaranteeing the right to appeal.”

Sen. Chip Rogers (R-Woodstock), the architect of SB 346, calls it “a point of pride.” The Marietta Daily Journal reported, “Rogers said a point of pride is his Property Tax Assessment and Appeals reform bill, Senate Bill 346, which is aimed at ensuring all Georgia properties are properly assessed at fair market value and that property owners have guaranteed rights to appeal. Rogers called it the most sweeping overhaul of the Georgia property tax system in decades.”

Rep. Barbara Macey Reece (D-Menlo) used nearly identical language as Lee Thompson (I think this must come from some type of press release template) saying, “Lawmakers gave final passage to comprehensive property tax reform legislation April 29. SB 346 is aimed at protecting taxpayers from unfair assessments and guaranteeing the right to appeal. The bill requires that every property owner receive an annual Notice of Assessment that includes the estimated property tax and expands the appeal time from 30 to 45 days. All relevant sales, including distress sales, must be included when determining Fair Market Value.”

Rep. John Lunsford (R-McDonough) said, “In an effort to give greater rights to our property owners and to expand those rights, the legislature passed Property Tax Reform, Senate Bill 346. This bill will protect taxpaying property owners by guaranteeing their right to appeal assessments and protecting them from unfair tax assessments.”

Sen. Tommie Williams (R-Lyons) said, “SB 346 revises numerous provisions relating to real property tax assessments and appeals and is considered to be the most sweeping overhaul of Georgia’s property tax system in decades.”

But not all reviews have been so positive. As noted earlier, some property taxpayers themselves have been more skeptical about the provisions of the bill. Also, Brett Harrington, an appraisal professional and blogger at Taxing Issues, has expressed concerns that SB 346 may not be “pro-taxpayer.” In response to my comment about SB 346’s requirement to fix the purchase price of a property as its property value for tax purposes for one year, Harrington noted:

Regarding the purchase price requirement, I agree, it could be significant. However, I am not 100% sure it is entirely taxpayer friendly. In some respects it places an emphasis on the purchase price, which can be problematic. This has been the case in places like CA & OH. When it comes to commercial/industrial transactions, the purchase price is not always the best indicator of market value for property tax purposes.

I believe the annual notice requirement is a favorable requirement. However, I think that changing/eliminating the “annual return” requirement would be much better. Taxpayers can file a return annually to initiate an appeal, but most taxpayers do not know this. What about eliminating the return requirement and allowing taxpayers to appeal after they receive their tax bills? Not only would it provide the opportunity to appeal, it would also be more cost and time effective for the municipalities.

Harrington concluded that, “Overall, in my opinion, this bill constitutes tweaks far more than reform.”

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