Following the release of the State Auditor’s performance report in July, exposing problems with the way “new growth” is calculated, your Taxpayers Association has been busy working to resolve multiple issues revealed in the report.
In the July Revenue and Taxation Interim committee meeting, Senator John Valentine made a motion to open a single bill file that will resolve dual issues. First, the bill will address the definition of “new growth” and eliminate RDA double counting in new growth calculations. Correcting the double counting could increase taxing entity revenue.
To protect taxpayers, the bill will include a second component to end the “ratcheting” effect allowed under the current Truth in Taxation law (TnT). This “ratcheting” occurs as the value of centrally assessed properties – like mines, telecom companies or oil and gas companies – fluctuates.
When the value of centrally assessed properties decrease, TnT holds the taxing entity harmless by making other taxpayers in the county pay more. When centrally assessed properties’ values bounce back, TnT counts that higher valuation as new growth, and doesn’t relieve the other taxpayers who had to pay more when the value of the centrally assessed property fell. Working with the Revenue and Taxation committees, we plan to fix this automatic ratcheting problem.
Your Taxpayers Association is also taking this opportunity to advocate greater protection for taxpayers by changing the way counties appeal assessments of centrally assessed taxpayers. We have been working with Senator Curt Bramble in reaching out to both centrally assessed taxpayers and counties to develop legislation designed to limit the ability of counties to file egregious appeals on assessments of centrally assessed taxpayers.
There is good reason to believe that counties rarely win the appeals they file, and that the legal costs incurred by the county associated with these appeals collectively far outweighs any increase in property tax collection that would result from successful appeals. The Interim Revenue and Taxation Committee has asked the State Tax Commission to gather data identifying how often counties appeal assessments, how often they win or lose these assessments, and how much the assessed valuation changes in appeals the county wins. We anticipate that the State Tax Commission will present this data in the upcoming September Interim meeting.
Senator Bramble’s proposed legislation will identify a threshold at which counties may appeal a centrally assessed taxpayer’s assessed valuation. Currently, any county that wants to file an appeal can do so for any reason, but Senator Bramble’s bill would require that an assessed valuation be egregious in order for counties to intervene. That way, county taxpayers won’t bear the legal costs associated with nuisance appeals.