Politics & Government

Town Council Continues Reassessment Discussion in Face of Record Tax Appeals

The township has lost $500,000+ in appeals every year since the housing market collapse, according to the township manager, and a reassessment is the best (and only) way to stop it.

To have an effect on 2013 taxes, township council would need to authorize a reassessment in the beginning of next year.

Township manager Tom Merchel told council Monday a reassessment would cost anywhere between $190,000-250,000, which could be paid over five years. Given the “hundreds of thousands” the it can’t defend, Merchel said he's recommending a reassessment next year.

While the township only receives 14 cents of every tax dollar collected—the rest goes to the county, school district and fire district—“every appeal that’s lost, we take the full hit,” he said. “There’s a lot of impact that this has.”

In 2011, the losses so far have come to $592,000. The township has lost a total of $2-3 million over the last few years, since the last revaluation in 2007—right before the housing market collapsed.

Prior to that, Merchel said, losses from tax appeals were comparatively minor. In 2007, the township lost $35,000 from appeals, he said.

Tax assessor Dennis DeKlerk said property values on average are down at least 20 percent from 2008, when the valuations from the 2007 reassessment took effect. About 200 property owners—nine of them commercial, the rest residential and a few vacant—appealed their taxes in 2011, he said.

The problem is the township doesn't have the ability to defend existing assessments because it doesn't have “solid market values,” said DeKlerk. “We're trying to defend 2007 values in a 2011 market, which is not working.”

The 2007 revaluation cost the township $583,000. Assessors had to canvass the town, talk to homeowners, measure exteriors, inspect interiors, etc. A new revaluation would entail significantly less work, DeKlerk said. It would be “pretty much an exterior thing,” with assessors checking for obvious changes to the home.

DeKlerk also noted the township could structure its contract, with whatever firm carries out the reassessment, to have new property values set at 95 percent of true market value—in anticipation of another dip in the market.

Merchel said in order to have the new assessments take effect in 2013, the reassessment would have to be complete by Oct. 1, 2012. In order to accomplish that, the township would have to award a contract in the first quarter of next year. He said the township also needs approval from the county and state before it undergoes a reassessment.

Members of council weren’t ready to make any decisions Monday night, but Mayor John Button said they would “chew on it” and continue the discussion at their next regular meeting in November.


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