Mathematical Ineptitude Vis-à-vis Assessments

In fearful anticipation of the 2012 re-assessment figures, a County Council member has proposed softening the sticker shock by using a fractional Predetermined Ratio (PDR) to lower assessments from the 100 percent of appraised value procedure now in place. That is to say instead of a $200,000 appraised value property being assessed for tax purposes at $200,000, the County could use a ratio of say 80 percent and lower the assessed value to $160,000. For a homeowner whose property appraisal was actually increased from $160,000 to $200,000 by the reassessment that would seem to leave the tax liability unchanged. But in fact it does nothing to change the shift in tax burden that would have occurred if the 100 percent PDR is used.

Since all property values would have the same 80 percent factor applied, the relative values of properties would remain unchanged. Presumably, taxing bodies will need to maintain total revenue collections after the re-assessment somewhere close to the pre-reassessment levels. Thus, millage rates will have to be adjusted to make that happen and changing the predetermined ratio merely creates an illusion of lowering tax liabilities. Thus, property owners whose appraised value rises far more than the average increase in their school district and municipality and county will still face higher taxes while properties that have been over assessed and whose value drops relative to the average change will see decreases.

Re-assessment is about getting accurate values for purposes of taxation so that equity among property owners is achieved. Playing with the PDR is a gimmick meant to disguise the sting of sharp assessment increases. It won’t work.