Residents from Christopher Creek, Kohl’s Ranch and surrounding areas angrily complained about property taxes higher than those of other Rim Country residents at a Christopher-Kohl’s Fire District board meeting Nov. 7.
Gila County Supervisor Tommie Martin and Deputy County Manager John Nelson tried to explain why taxes increased as property values decreased.
“The assessor’s office in Payson told my Dad that most of the homes in this area are second homes and the owners could afford this tax,” said resident Rick Washburn.
“I live in Mead Ranch. Only one home has sold in the last two years. It originally listed at $195,000 and sold for $74,000. None of our homes are worth the full cash value,” said resident Sherry Duncan.
Adding to the frustration of the meeting, the Christopher-Kohl’s Fire District board had a contentious discussion over details of the hiring agreement with Rob Jarvis, interim fire chief.
Making Jarvis a full-time chief adds to the tax burdened residents, said Debra Dawson, chair of the fire board.
Pam Fischer, Martin’s staff specialist who lives in the area, said she is also affected by higher taxes. Fisher has seen a significant increase in her taxes along with the residents at the meeting. Fischer tried to explain why taxes increased, but residents found the complicated tax laws difficult to understand.
Martin said the assessor’s office bases property taxes on a value calculated one year and nine months before residents pay their taxes.
What happens in the market during those years determines the full cash value the assessor’s office uses to establish property taxes landowners pay, she said.
“When we evaluated the 2011 market value for the Christopher Creek-Kohl’s Ranch and surrounding areas, we analyzed sales data from January of 2008 to November of 2009,” said Larry Huffer, chief appraiser for Gila County. The county mailed out notice of value for 2011 in February of 2010.
Determining the value
In addition to analyzing sales data, the assessor’s office estimates what it would cost to replace the home in determining a home’s taxable value.
Improvements made to the home and depreciation affect that value. Sales of vacant land surrounding homes also help to determine the value of the property, said officials from the assessor’s office.
“Arizona has some of the most complicated property tax laws,” said Nelson.
In the Christopher Creek, Kohl’s Ranch area, the disparity between smaller homes built in the 1970s and ’80s and larger homes built in the early 2000s drive up property values, said Martin and Nelson during their meeting with property owners.
However, Huffer disagrees.
He said his office compares values of homes that have similar characteristics.
In a neighborhood that has mixed quality homes, the assessor’s office groups the sale prices of homes with similar qualities.
High quality homes are grouped together while smaller homes are grouped to determine their value separate from the higher quality ones.
In other words, the assessor values property based on location.
Neighborhoods of smaller homes do not have their value based on neighborhoods of large homes, he said.
Notices mailed out in
February each year
The assessor’s office said homeowners do have a say in their property valuation.
At the end of every February, the county mails out a “residential notice of value.”
On that notice, two years worth of data are listed.
The first is for the current tax year. The second is for the upcoming tax year.
On Feb. 28, the residential notice of value listed information for 2011 and 2012.
The numbers listed included full cash value, limited property value, the legal class of the home, assessment ratio and assessed value.
Homeowners need to understand that the current year’s numbers are fixed, the assessor’s office said.
Taxpayers may appeal the upcoming year’s value.
The taxpayer had 60 days to appeal from the date of the notice.
The appeals deadline for 2012 taxes is over, however, when a homeowner receives their residential notice of value in February 2012, they can appeal the full cash value for 2013.
If the property owner decides to appeal, an assessor will examine the value of the property.
Larry Speer, with the county assessor’s office, said the appeals process mimics that of a court case.
To appeal, a homeowner either prints a petition from the county’s Web site or requests a form from the assessor’s office.
The homeowner is then responsible for making the case that their property is worth less than the full cash value based on surrounding sale comparables or proof of the sales in the area.
The assessor’s office will make its case by submitting its own comparables as well as examining the home of the petitioner.
If the petitioner has added improvements, those changes will impact the assessor’s decision, said Speer.
Documents submitted to the assessor will help make the decision on the value of the home.
The assessor’s office sends their decision to the homeowner by Aug. 15.
If the property owner is dissatisfied with the assessor’s decision, they can appeal to the County Board of Equalization, said Speer.
The confusing mix of “full” and “limited” value was supposed to protect homeowners from big jumps in their tax rate when the value of the home shot up. That’s why the “limited” value can’t go up more than 10 percent in one year, no matter how much the assessed value of the home rises
But after years of rising home prices, the “limited” value of most homes has lagged well behind the “full” value. That has resulted in lower tax bills for the voter-approved bond issues tied to the limited value.
That means in a market with falling home prices, the limited value will continue to rise until it matches the declining full value.
That might happen next year due to the lag in assessments, but this year many homeowners got clobbered.
For instance, one resident reported that the “full” value of her home remained unchanged at $360,000 between 2010 and 2011 — largely due to the nearly two-year lag in comparisons. However, her “limited” value rose by about $30,000, still closing the gap that had accumulated in previous years between full and limited value.
Adding to the tax woes for this area, the Payson Unified School District, which multiplies its tax rate on the full cash value, significantly increased their tax rate.
In addition, the secondary tax rates for the Christopher-Kohl’s Fire District and the Gila Community College also increased.
The result for one taxpayer was an increase of approximately 80 cents per $100 of assessed value from the previous year’s taxes.
Some residents of this area saw increases of more than $1,000 on their property taxes.
For retired residents living on a fixed income, this hits them hard and makes them angry, residents said at the meeting.
This anger doesn’t bode well for the new fire chief.
Jarvis’ experience justifies paying him $74,000 a year in salary, but the fire board felt it only fair to the taxpayers to offer him $68,000, said Dawson.
To get more information , visit www.gilacountyaz.gov/assessor/process.html.