HOW WE SEE IT: Taxes Could Go From Bad To Worse

Posted: November 15, 2009 at 7:32 a.m.

• Print item
• E-mail
• Share
• Tweet

SPRINGDALE — Property taxes went up in Benton County because of a 2008 reappraisal while real estate prices crashed in 2009. The response was outrage and a call for action.

The Legislature can fix this - or make it worse.

Property owners throughout the state should be very wary of “fixing” the three-year cycle of property reappraisals. Benton County real estate owners shouldbe the most wary.

We are not asking the Benton County delegation to do nothing. We are imploring them to follow an old rule for doctors: First, do no harm. In this case, they should also be careful not to open doors for others to cause harm.

The “country caucus” of rural lawmakers rules the legislature. Any quick fix to property taxes in the next regular legislative session in 2011 carries severe risk for Benton County and other high property value, less-rural counties such as Washington, Pulaski and Faulkner.

The property tax appraisal system before 1999 was grossly unfair to Benton County - much worse than the system now - and very favorable to rural ones.

The old system put off reappraisal of property in a county until certain triggers were hit. Those triggers never seemed to get hit in rural counties. Benton County threw a tripwire every year. That old system put the burden of rising taxes upon growing counties.

It left rural Arkansas with stagnant appraisals that left their taxes far too low for decades.

No member of the term-limited House of Representatives remains who served during the property tax revolt of 1999. Benton and Washington counties played a leading role in that revolt. It resulted in statewide reappraisals every three years.

Whatever fixes Benton County lawmakers propose in 2011 will open the door to other lawmakers - the ones with the clear majority and the power that comes from those numbers - to craft and approve the final “fix.” Benton County’s delegation is too small and too isolated in the largely Democratic state House to keep their proposals from being turned to other purposes.

As the system is now, some “slow-growth” (rural) counties already get an exemption from the cycle.

About a third of the counties are still reappraised for taxes each year. This cycle takes three years to cover most of the 75 counties. Growth in appraised value for homes is capped at 5 percent a year. Appraisals on the homes where the owner is older than 65 years or disabled are frozen.

Benton County was reappraised for 2008 taxes, payable on their tax bills due in October 2009.

Therefore, Benton County real estate owners had their property’s value for taxes set for the next three years at market-peak prices while their property’s market value fell in an epic crash.

We applaud the Benton County Equalization Board in this crisis. These boards hear appeals of appraisals.

They are designed to do a little fine tuning. This year, the Benton County board has worked far harder, readjusting appraisals in what amounts to a major - though still insufficient - makeover.

We understand the frustration of property owners.

Still, the growth of appraised value of homes is capped and real market value grew faster than that capped rate in boom years. Benton County appraisals might still have some catching up to do even when the threeyear cycle rolls around again, especially if markets recover.

The solution to tax unfairness is real-world, realmarket value appraisals as often and accurately as possible. The real solution could be reappraisal every year.

Here is a simple idea: Property taxes are appraised for one year but not due until October of the next year. Shorten that 22-month gap.

Opinion, Pages 10 on 11/15/2009

Comments

To report abuse or misuse of this area please hit the "Suggest Removal" link in the comment to alert our online managers. Please read our comment policy.

Use the comment form below to begin a discussion about this content.