Barbawit at Prytaniawaterline is
concerned the upwardly revised property assessments in New Orleans will be too high, and is so angered by the slow pace of the recovery that he's
considering leaving the Crescent City.
I'd like to see more progress, too. Regarding the property tax issue, though, I agree 100% with
this post by Cold Spaghetti. It perfectly expresses how I feel. Go read
it.
Remember: Millages determine tax rates, not assessments. Now that assessments are becoming more accurate, it's imperative that we drastically cut millages (and loudly proclaim to the world that property tax rates in New Orleans are going down!). New Orleans had some of the highest millage rates in the country. Why? Because for decades the assessments were so g-ddamn
artificially low! Millages were
cut last year, and must be drastically cut again this year.
Also, keep in mind that a major reason why this backassward system is getting unwound is because District 6 in Uptown elected a reform candidate committed to fair assessments, and removed a family that had controlled the office for 80+ years. Unfortunately,
both the Gambit and the Times Picayune refused to endorse the "IQ" reform effort , which sought to replace corrupt cronies like 4th District Assessor Betty Jefferson, Dollar Bill's sister. Only one reform candidate was able to win office, no thanks to the local media.
The T-P redeems itself (somewhat) with
today's editorial:
The case for a tax rate reduction, or millage rollback, is a no-brainer. By bringing real estate valuations closer to market values, the reassessment will effectively expand the city's tax base and generate more taxes for each mill -- the unit in which property tax rates are expressed.
This year, one mill generated almost $1.5 million in property taxes citywide, but the same mill could collect as much as $3 million next year if assessments across the city go up as much as some anecdotal evidence suggests, said David Gernhauser, secretary for the Board of Liquidation-City Debt, which oversees city borrowing.
The millages must be reduced so that residents and businesses won't be hit hard just as they are facing higher costs of insurance, utilities and other necessities.
Reducing millages is not up to the assessors, who only set the taxable value of homes and businesses. By law, all government entities must reduce millages after a reassessment, but they can raise them back up with a two-thirds vote of their governing body.
The New Orleans City Council and the Orleans Parish School Board make the ultimate decision on tax millages for the vast majority of property taxes collected citywide.
Update: The T-P reports that the City Council and the School Board are poised to
roll back the millages.In a move that could ease the sting of new and in many cases sharply higher property assessments, the New Orleans City Council announced Wednesday that its members have agreed in principle to reduce the city's tax rate proportionally, so that the higher valuations won't necessarily mean big tax increases.
Meanwhile, the president of the Orleans Parish School Board, which receives the largest single share of the city's property tax revenue, said the board is likely to get behind the idea as well.
See,
I told you this would work! Not all change is bad, New Orleans. Your fear of reform has let rich homeowners skirt their tax responsibilities for generations on end. Let's boldly enter the 20th century with a modicum of faith and unity. (And if you feel you've been
legitimately overassessed, you have the opportunity this month to visit one of your seven highly compensated assessors, and make your case.)
Fun fact! I
seriously considered running for Assessor in District 6 last year, until I learned about the coordinated "IQ" effort. It had been in the back of my mind since the summer of 2005, when I realized there was a political opportunity there. In fact, in August of 2005, I paid my local assessor a visit. I told him I was unsatisfied with my property assessment, as well as my neighbor's assessment.
I told him they were far too low, and needed to be higher. You should've seen the look on his face.
My neighbor and I owned "sister" houses that were nearly identical. They were perfect comparables, and both were assessed at their purchase price. The problem was, I had purchased my house 3 years prior, and my neighbor had purchased hers
30 years prior. My house was underassessed by, say, 100k and my neighbor's was underassessed by 250k. I asked my assessor to properly adjust the assessments. He said he would correct the error sometime in coming years, but had no explanation as to why my neighbor's house hadn't been significantly reassessed for 3 decades. It didn't seem fair, I said. So he tapped on his desktop computer keyboard, and
lowered my property assessment by 40k, below the purchase price, thinking that would satisfy me. I got a printout of the change and had my friend Medium Jim notarize the document, and planned to use it in my campaign.
Labels: assessors, Housing, Pelicans, R.E.
18 Comments:
I have been meaning to do a post on this, but the non-online segments of my life have been feeling neglected and I had to tend to them for a while.
You nailed it; taxes are millages, NOT assessments. However, on the surface the BIG numbers in the letters have caused a lot of people to panic. This is the only hard numbers people have seen and that's what our big brains focus on.
The typical lackadaisical response of many of the elected and not so elected leadership (with several notable exceptions) in the last few days, as usual, has not done a thing to help the situation. Instead of a solid statement and explanation, we get piece meal responses, and a half baked, late to the party, joint statement.
In many a community meeting the topic has come up, and nearly everyone who hasn't been slammed with the "new buyer windfall tax" says they would be willing to pay a little more if they knew it was fair. But then, they tend to trust their leaders about a far as they can toss their house...I can't understand why.
Ditto what Celcus said.
Plus, while I agree with you that this could be a step in the right direction, I still think the assessments... even if they are more "fair".... look artificially high across the board.
Also, you should know as well as anyone by now the necessity of watching the taxing authority very very closely until you're certain those millages are coming down.
And then keep your eye on them anyway.
"I still think the assessments... look artificially high across the board."
Based on what evidence? Anecdotal hysteria? My assessment was exactly where it should be (imo): 90% of Fair Market Value.
Obviously, the taxing authorities must be "watched" and pressured to lower millages when at all possible. But the assessments had to be reformed first, before anything substantial could be accomplished.
mine was on the money too, although i purchased 3 months ago.
The new 2008 assessments are online now.
http://www.opboa.org/Search/GenericSearch.aspx?mode=ADDRESS
you can just plug in a "5" in the address blank, along with "st charles" for the street to pull up all the 5000 block houses....
or, of course, you can search by "nagin", "manning", ...
Heh..
Anecdotal hysteria is all I have to go on right now. Although it's rarely steered me wrong in the past.
At the same time, I can't see how you can value properties in say.. the 1800 block of Third St.. at between $150,000 and $250,000.
No one would (or at least should) pay that kind of money there at the moment.
Thanks for the plug, oyster! I've been watching my back thinking that one of the landlords from the forums was going to come after me with flames. Good to know that others are truly thinking in the same direction!
""I still think the assessments... look artificially high across the board."
Based on what evidence? Anecdotal hysteria? My assessment was exactly where it should be (imo): 90% of Fair Market Value."
Mine is 130% of FMV. Yes, they're high so we have to bitch about them, so then they'll roll ours back, and then they think that we'll look upon them favorably.
Perhaps they were anticipating the coming improvements to your ManCave.
Assessed values and sales prices are two completely different things.
For one to know what your house would really sell for...you have to sell it. Barring that, there is a full appraisal...and a full blown appraisals of every home is financially and logistically impossible.
Assessments rely on recent sales data (the most accurate and up to date) and then it moves to a shorthand form of appraisal based on s.f. costs, and condition categories. If anything, they tend to slightly under-estimate value.
Just like normal appraisals, assessments use comps, and do not take into account the crappy house on the corner, or the big pothole down the block, or the crackhouse in the next block. And they are based on sales prices, not asking prices, and there is usually a significant difference between the two.
Before anyone says to let homeowners submit their own appraisal, understand that they are most often done so as to get a property to meet a certain price. They are highly flexible and easily manipulated to produce certain outcomes within an acceptable range (picking the "right" comps)...that's how the real estate works, BTW. But they can give you real ammunition if your assessment is way out of line.
And many will be. The tools the assessors use are a bit blunt, and will miss things, but in general they get things pretty close.
And then, an awful lot of people really have no idea what their home is really worth, or bas it on a sales price here, or there, and a four year old appraisal.
"Assessed values and sales prices are two completely different things."
I think we're all aware of that...at least, I hope we are.
However, with this new round of assessments, when two neighboring properties, in the same state of repair are assessed at $256sf and $122sf, there's something very wrong.
Ashley, I have no doubt that you will be making THAT perfectly clear to your assessor.
And, I've seen lot of comments that lead me to believe that people don't get the difference.
Yeah, after further review (and more clickage), you're right...
Great post, especially with the Spaghetti addition. I'd just add that having these appropriate assessments gives local government (including the School Board, S&WB, even the Economic Development Fund) more flexibility in their operating budgets. The beauty of having to roll back millages below what is legally allowable is that New Orleans has the ability to be responsive to its needs, from servicing necessary capital improvement needs to raising revenue during lean times.
The Downtown Development District does just this: though they are permitted 22.97 mills, they only collect what they need to meet their debt service and operating needs--which usually amounts to 15.9 milles.
We are about to have a city government that can appropriately reinvest in itself--and that is truly unprecedented territory
Though it might take New Orleanians a couple months to get through the learning curve, consider this another corner turned.
Don't know what the glitch is but.. the previous comment is totally not me.
Eh not a glitch... just a different jeffrey.
All this time I thought I was the only one.
Hmmm . . . so after my 300% increase, I am at the mercy of the City Council, S&WB and School Board, as to whether or not I can continue to afford my 980 sq. foot home? And furhter, I am supposed to have faith in them?
This is still New orleans . . . right?
Just a comment on the IQ "reform" ticket. I sympathized with the idea, but found the methods to be completely unacceptable. In fact, I actively campaigned against the IQ ticket for the following reasons: (1) I did not see the value in electing someone who was unqualified and not knowledgable about the real estate/property assessment business. (2) I thought it completely irresponsible of voters to elect someone on the premise that s/he would quit and appoint some third party contractor of his/her own choosing to take up the work. I want to have a say in who that person is and I want to be able to evaluate their qualifications. I did not want to simply hand over my rights as a voter to some unqualified IQ candidate on blind trust. (3) I thought the proper way to address the problem (and one which I wholeheartedly supported and voted for) was to place the measure to consolidate the assessors on the ballot and give the voters a chance to reform the system in this way. The IQ stunt attempted to short circuit this process and violate my rights as a voter to participate in this decisionmaking process.
I think the IQ ticket was a completely cynical way to address the problem. Its premise was to undermine the democratic process and to encourage irresponsibility in exercising authority vested in them through the electoral process. Who, on principle, elects an avowed "quitter"?
Don't get me wrong ... I supported the consolidation of the assessors, thought the old system was corrupt, and I even have no problems with the way things are shaping up these days with the reassessments. I think it's likely to be much fairer. But the whole IQ thing was a scam on the voter and a cynical approach to reform and the democratic process. I resented that the IQ ticket treated the intelligence of the voter with such disdain and I found the lack of respect for the democratic process and the responsibility of holding public office inherent to the whole IQ movement to be a reprehensible characteristic of the movement. It wasn't a "reform" movement, it was the antithesis of reform deceptively masquerading as reform. Quitters aren't reformers, they're just pathetic quitters.
Sorry for the rant, but it's how I've always felt about this particular movement.
I do agree and know that the property tax assesments have been out of wack for a long time. Bringing equality to the assesments is the fair thing to do. I still wonder if the tax asseors have an infalted view of what the city is worth right now. Promises of millage rollbacks are not reassuring to me, I am not sure that in the end the formula is going to be right. We have to wait a few months to see if they get it right.
