ASSAULTS ON REAL ESTATE TAX BASE INTENSIFIES
There has been a notable increase in real estate tax protests, an increase which appears to coincide with the downturn in the economy. The increase in protests appears most pronounced with regard to commercial and industrial properties — precisely the type of properties which are the foundation of the tax base for many school districts.
When a landowner has a tax objection and requests a reduction of $lO0,0()O or more, the County Assessor will send out a notice regarding the taxpayer’s petition to each affected taxing body, including school districts. The school district can then intervene in the matter and datand its tax base.
Most commonly, the taxpayer will challenge the Assessor’s determination of fair cash value for the property. "Fair cash value" is the theoretical sales price in an arm’s length transaction between a willing buyer and a willing seller who are unrelated and otherwise have no other attachments to each other. Taxpayers can be exceedingly creative when making arguments about fair cash value, and by intervening, the school district can help to ensure that reductions are minimized.
Board of Review Hearings, which generally occur in February and March, are very informal proceedings. The taxpayer, the Assessor, members of the Board of Review and any taxing district representatives who are present are given an opportunity to review and challenge evidence and cross-examine testimony. A school district wishing to intervene may do so by tiling an intervention letter with the Board of Review in advance of the Hearing. Once it has intervened, a school district can challenge the taxpayer’s evidence in support of its request for a reduction, and can send a signal to the Board of Review that the school district is concerned about the whittling down of its real estate tax base. By intervening before the County Board of Review, school districts also protect their rights to participate in any subsequent legal action before the Property Tax Appeal Board.
BILL AMENDING PROPERTY TAX CODE WOULD EXPAND LONG-TIME OCCUPANT EXEMPTION
Under current law, only if a county had elected to be subject to the provisions of the Alternative General Homestead Exemption would a property tax exemption be granted to qualifying "long-time" residents. However, on January 30, 2009, Senator Mad Murphy introduced a Bill which would allow taxpayers in a household earning less than $l00,000 annually who have continuously lived on the property for ten (10) years to be eligible for the exemption, regardless of whether their county had elected to be subject to the Alternative General Homestead Exemption. The Bill, if passed into law, would be effective immediately and have a dramatic adverse impact 2009 taxing district revenues in counties that are not already subject to the Alternative General Homestead Exemption provisions.
February, 2009