Tax assessor: Property values level out; bottom reached?
Preliminary figures from the Fayette County Tax Assessor’s Office are offering good news about the decline in property values experienced over the past several years during the recession.
The drop in this year’s overall tax digest — which is the combined value of all parcels in Fayette County — is expected to be just 1 percent, the county commission was told at its retreat Friday morning. That’s compared to the countywide decline in property values of 10 percent seen last year, so there is hope this is a sign that residential property values have found their low point.
Even better: this year’s decline in the aggregate property values is almost strictly contained to the commercial category, as housing prices have seemingly stabilized, officials said. Another sign of the resurging housing market has been the sighting of new home construction again in the county.
The one silver lining of the shrinking assessed values of the past few years is that they have, on the whole, resulted in shrinking tax bills for many Fayette residents.
Now, those lower property values are making it difficult for the values to go back up, officials explained. Tax Assessor Joel Benton told the commission that there are now occasions in which property owners are wanting their assessments to go upwards, as they are trying to sell their home.
It was noted at the retreat that the lower appraisals from the tax assessor’s office, combined with lower private appraisals of real estate, are hurting residents even though they have a buyer willing to pay an asking price higher than the assessed value.
“I’ve been in the office for 20 years now, and this is the first time I’ve had people complain and want their values to be higher,” Benton said.
The total tax digest value in Fayette County rose to a peak of $5.45 billion in 2009, but the drops in 2010, 2011 and 2013 sent it packing to $4.3 billion, its lowest mark since 2004.
Part of what has driven down home prices in Fayette County and statewide is a change in Georgia law several years ago that requires short sales, bank sales and other transactions, with the exception of foreclosures, to be considered as a factor when determining the price of property, Benton said. Prior to that law taking effect, such lower sales prices could be kicked out of the system because they were not considered an evaluation of the “fair market” in what was called an “arm’s length transaction.”
The law does allow the tax assessor’s office to throw out sales between family members, as they are almost always at a significant discount compared to what the actual value of the property is, Benton said.
The possible end of the decline in property values also stands to be good news for local governments, which have had to shrink their budgets to varying degrees to account for a lower amount of property tax, which often accounts for roughly half of the budget for Fayette’s city and county governments.
The Fayette County Board of Education, which has the highest millage rate in the county and commands the largest portion of the local tax dollar, has also suffered a steep decline in property tax revenues and has been unable to raise its millage rate to offset those losses because it is at the maximum rate without getting a separate voter approval.
The BoE has also had a second significant hit as state revenues in the Great Recession have also declined, and that added to lower student enrollment figures has led to another hole in the BoE’s budget.
The net result is that the BoE voted last month to close four schools and there is also a need to cut about 310 jobs from the payroll as well for a total savings of $11.5 million. The school closings are expected to save an additional $3.8 million for a grand total of $15.5 million shaved from the upcoming 2013-2014 budget year.
The public school system is the largest single employer in Fayette County, with 2,576 on the payroll currently. The budget cuts would shrink that number to 2,267.