BETWEEN THE LINES: Tax Break For Some Breaks Others

FAYETTEVILLE — Good news for most Washington County taxpayers isn’t such welcome news for the schools or for city and county governments.

By now, property owners throughout the county should have in hand the results of the latest cyclical reappraisal of their homes and other property. Most learned that the value of their holdings has gone down in the three years since the last countywide reappraisal.

That’s not all good news, of course. Who wants to think that their homes or businesses aren’t worth as much as they were?

But, when market value on a piece of property drops so does the amount of taxes owed on it, assuming the millage rates to be applied haven’t changed.

That should be welcome news to owners of about 70,000 of 93,000 parcels of property taxed in Washington County. The other 23,000 parcels went up in value and their owners will pay more tax, even if millage rates are unchanged.

For the uninitiated, tax rates are multiplied against the assessed value ofproperty, which is supposed to be 20 percent of market value.

It follows that, in a weakened economy, when market values and assessed values decline, so do the resulting taxes.

Of course, tax rates can change, too. City councils or the local Quorum Court might increase some millage rates. Or school patrons might themselves vote an increase in the local millage, as is proposed in both the Springdale and Fayetteville school districts this year.

In a declining market, taxing entities either have to raise property tax rates or live with less revenue.

The cumulative impact of all those parcels dropping in value can be huge for the taxing entities.

Some preliminary estimates by Assessor Lee Ann Kizzar show an overallreduction in the county’s total assessed valuation of more than 5.4 percent. That amounts to well over $138 million for all the entities. Losses vary from city to city and from school district to school district.

One city will take more than an 8.5 percent cut in property tax revenue while another’s cut will be less than 3 percent.

So, what may seem like relatively small savings for individual taxpayers will turn into major money losses for the schools and governments. That’s to be expected with a universal dip in the assessed valuation of the county’s property.

Don Horton of Arkansas CAMA Technology, the firm that does the reappraisal work for Washington County, said there are certain pockets in the county where values have stayed the same or even gone up a bit. But most values declined, excluding that of agricultural property

Many, if not most, of the 23,000 parcels with increased value are agricultural. That land hasn’t been revalued in this county since 1995, Horton explained. The reappraisal this year made up the 15-year gap and the resultis higher values, which are based on state-set criteria.

That’s prompting some taxpayer questions for Horton and others involved in the reappraisal. But he said there really are comparatively few complaints from taxpayers this year.

He said only seven hearings had been scheduled so far with the Washington County Equalization Board, which will begin meeting on Aug. 2. Taxpayers have until Aug. 16 to schedule hearings, so there may be more.

The board meets annually to hear appeals from taxpayers dissatisfied with their assessments. The is made up of members selected by leaders of the public schools, cities and the county government.

They do make some adjustments for taxpayers who can make a strong case But, remember, these people represent the entities that have the strongest interest in making sure the county assesses all property for what it’s worth - and not penny less.

BRENDA BLAGG IS A COLUMNIST FOR NORTHWEST ARKANSAS NEWSPAPERS.