Officials discuss property tax misconceptions

By Lesley Jenkins
star staff

With a potential rise in the property tax rate looming, many property owners are worried about the effect the increase will have on their wallet. Fortunately, reassessment time is right around the corner in 2005, and the state will probably certify a lower tax rate, effective in 2006.
   Gerald Holly, property tax assessor, and Jason Cody, finance director, discussed common misconceptions with the Star.
   Cody said, "One of the common questions that we hear in the budget committee sessions is the old, 'My taxes are going up every year.' While his people are out in the field doing evaluations for the reassessment cycle, those individual's taxes will not change unless they have done an addition or something significant to the property to enhance the value, like added siding, built on a room addition, things like that that are common. When Gerald is talking about permits they are going out and looking at that. As well as new home construction, which they go out and pick up."
   Cody continued, "That is one of the misconceptions out there. People see the Assessor's Office out there, maybe looking at their property and they immediately think their taxes are going up. And that is not necessarily the case. If they haven't done anything, then nothing is going to happen until the five-year cycle."
   The state of Tennessee will begin the reappraisal program in 2005 to set a certified tax rate effective in 2006. With the certified tax rate, the property tax rate typically decreases but the revenue into the county will stay the same. For example, in the previous reappraisal in 2001, the property tax rate dropped from $2.46 per $100 of assessed value to $2.15. The County Commission added another seven cents to the tax rate, raising it to $2.22. Carter County's property tax rate has not increased since 2001.
   Holly said, "The reappraisal program which began in 2001 - we go to 2005, when the review and the reappraisal period will be done. Between the reappraisal period, the five years, we have to monitor the county because the state provides money in the county. During the five-year period we are in the last year is when all the sales data comes in and the review of all the parcels that we have. We have over 32,000 parcels. Between this four-year period we review approximately around 25 percent.
   Cody said, "They try to cover this in the five-year period. They are spacing it out so that you (Holly) are reviewing so many a year. So at the end of the five-year period when the state comes in you're in a pretty good position for the reassessment."
   One way to keep up with new homes and additions is to monitor building permits that are sold at the Carter County Planning Office.
   Holly said his employees work from "the permits that come in now for new additions and for new construction. We have the review that is mandated by the state each year plus we work in the field reviewing the permits that come into the county now."
   Despite all the new construction that comes into the county each year, the revenue is balanced out by lost industry, keeping the property tax revenue to approximately one percent.
   "There is kind of a net effect. On property values there are pluses and minuses. Obviously we have lost some of our industry. So there are some minuses taken away. But there are also new things that are being added as well, like new home construction and things. Over the last few years we have had a growth in our property tax revenue. The tax rate hasn't changed, but the revenue has. We have been growing about one to two percent in that range. Not a lot; it has been relatively flat. It has been from picking up new properties," Cody said.
   Commercial development and residential development rises each year at about a four percent rate from the real estate market standpoint. Since the last reappraisal the market value has increased 12 percent, Cody said.
   The Tax Assessor's office has three full-time employees and one part-time employee to look at more than 20 parcels each day to fill the 25 percent quota each year. "The way a lot of people work they are not at home. We try to inform people that we are there. But often they are not at home," Holly said.
   Cody said the commission has tried to make do until the reappraisal cycle comes around in 2005 without making another property tax increase, but with the price of bread, milk, and gas increasing at alarming rates, the county is experiencing overages in many areas of the county budget.
   Increases in food costs have affected the Carter County Jail and Carter County School System. Before gas prices soared to record highs, the county purchased fuel to last for approximately 4-5 weeks at $1.47 per gallon. "We have a substantial fleet at the highway department. We were able to ride out this increase and now it is starting to come back down." Unfortunately, the county will have to refill their gas tanks shortly and will experience some of the high gas prices.
   If the property tax rate is increased, many people will be stretching their dollars to make ends meet. The County Budget Committee has suggested the property tax rate be set at least to $2.65.
   Cody said the increase for a $100,000 home would be $107.50 a year or $0.29 cents per day.