Tax reappraisals in hands of lawmakers

New assessments coming this spring

Flathead County property owners can expect to find their property reappraisal assessments in the mailbox something this spring, after the state Legislature has had a chance to wrangle with the new numbers.

The county commissioners on Thursday got an hourlong refresher course on the reappraisal process from Scott Williams, regional manager of the state Department of Revenue Property Assessment Division.

The six-year reappraisal cycle ended Dec. 31, and mitigation of the new appraisals for property now is in the hands of state lawmakers.

"Without intervention from the Legislature, property taxes could increase significantly for most Class 4 residential and commercial property owners and for Class 3 agricultural property owners," Williams said. "I don't know what the Legislature will do."

A special interim legislative committee has been at work for months developing legislation to lessen the effects of higher valuations on taxpayers.

Producing appraisals that accurately reflect current market conditions has been a challenge, given the recent economic downturn. The department typically would have housing sales data only up to January 2008, but decided to collect and use sales data through June 30 to compensate for the downturn.

The department held statewide meetings with representatives of the real-estate industry in its quest to get the most accurate data.

"The goal is to ensure property is valued at the current market value," Williams said.

While much of the property in the Flathead Valley has soared in value during recent high-growth years, Williams reminded the commissioners that it's the 2002 appraised values that will be used in the reappraisal, not the appraised value from the most recent year.

Owners of agricultural land will see changes in the way their property is assessed this time around. It has been 40 years since Montana has had a full reclassification and productivity determination of farm land, Williams said, largely because the state hasn't had the money to do it.

Money was set aside during the last two legislative sessions, though, to help with a statewide reclassification of both agriculture and forest land.

The Legislature in 2007 determined that the market for ag land didn't necessarily reflect the actual value of the land, and established language in state law saying that "because the market value of many agricultural properties is based upon speculative purchases that do not reflect the productive capability of agricultural land, it is the legislative intent that bona fide agricultural properties be classified and assessed at a value that is exclusive of values attributed to urban influences or speculative purposes."

Once property owners get their new assessments, they can request informal valuation reviews and appeal to the county tax-appeals board.

The state has until Aug. 1 to certify the taxable value of each taxing jurisdiction.

The past two reappraisal cycles have been tumultuous for Montana property owners.

In 1996 reappraisals increased the total market value by 40 percent, prompting a decision by the 1997 Legislature to phase in the change over a 50-year period. The Supreme Court declared the Legislature's action unconstitutional. In 1999 the Legislature passed a measure to phase down the tax rate over four years to 3.46 percent.

In 2002 the reappraisal increased total market value by 20.2 percent and lawmakers voted to phase down the rate over six years from 3.4 to 3.01 percent. An extended property-tax assistance program was established for residential property with a taxable value increase of more than 24 percent and a tax-liability increase of more than $250.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com