UNIT STAT S ebruary 2016 · Cincinnati's golf courses are getting spiffed up clubhouses, nicer cart paths, and better irrigation - and it's not costing city taxpayers anything. Thanks

International Property Tax Institute

IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or anyh opinions expressed in the articles.

UNITED STATES - February 2016

CITY GOLF COURSES TO GET UPDATES ................................................................................................................... 1

CAD OFFERS UPDATED PROPERTY TAX INFO .......................................................................................................... 5

TIF PROPERTIES COME BACK ON TAX ROLLS .......................................................................................................... 6

BILL AIMS TO SHIFT BURDEN OF PROOF IN SOME PROPERTY TAX CASES............................................................... 7

SHOULD OFFICIALS RAISE PROPERTY TAXES TO FIX ROADS?.................................................................................. 7

TAX ASSESSMENT APPEALS PERSIST IN BALTIMORE .............................................................................................. 9

TEXAS CAN ABOLISH STATE PROPERTY TAX ......................................................................................................... 12

ORANGE COUNTY PREPARES FOR 2017 PROPERTY REVALUATION ...................................................................... 12

DETROIT CUTS PROPERTY ASSESSMENTS FOR MOST HOMEOWNERS .................................................................. 13

LOCAL SUPPORT FOR PAYMENT IN LIEU OF TAXES CONTINUES ........................................................................... 14

DE BLASIO SAYS PROPERTY TAX CAP FOR NYC IS A 'NON-STARTER' ..................................................................... 15

THE TAXMAN SAYS TRUMP’S UN TOWER IS THE MOST VALUABLE CONDO BUILDING IN NYC ............................. 16

City golf courses to get updates Cincinnati's golf courses are getting spiffed up clubhouses, nicer cart paths, and better irrigation - and it's not costing city taxpayers anything. Thanks to an Ohio Supreme Court decision, Cincinnati's municipal golf courses will get more than $2.8 million in property taxes back and it now has a plan for about half of that money. The first chunk of refunded tax dollars, roughly $1.5 million, will update the clubhouse at Glenview Golf Course, the city's premier golf course in Springfield Township, including constructing an open-air pavilion. The funds will also pay for improvements to paved cart paths, parking lots and irrigation systems at many, if not all, of the city's six golf courses. Like many golf facilities, those owned by the Cincinnati Recreation Commission have seen a decline in rounds of golf since 2010, said Steve Pacella, interim director for the recreation commission. Cincinnati saw a roughly 14 percent drop from 2010 to 2015. But the golf courses, operated by for-profit Billy Casper Golf Management, are still self-sustaining and popular, Pacella said, with 236,084 rounds logged in 2015. They receive no tax revenue from the city and are maintained to help "build a robust public life," according to city documents related to this spending.

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Glenview – considered one of the most challenging courses in Greater Cincinnati – was chosen to get the most money, about $800,000, because it is a popular course for outings and leagues, Pacella said. Glenview's clubhouse renovation will include a full renovation of its restroom facilities, the added pavilion and upgrades to meet the requirements of the Americans with Disabilities Act. Glenview hasn't undergone a full renovation since it was constructed in the 1970s, Pacella said. City Council unanimously approved the spending on Feb. 3. It will also pay to move the administrative offices for Billy Casper Golf managers from Glenview to California Golf Course. That entails a $40,000 renovation to a former caretaker building at California. The city will spend roughly $600,000 repaving the cart paths and parking lots that are in the worst shape, Pacella said, and $100,000 will go toward better irrigation systems. The windfall is a result of a May 2015 decision by the Ohio Supreme Court. The justices unanimously agreed that the Ohio Board of Tax Appeals correctly reversed State Tax Commissioner Joseph P. Testa’s decision to deny property tax exemptions for Cincinnati's six public golf courses. Testa believed the city should pay the taxes because its courses are run by a for-profit contractor. The money coming back are taxes paid between 2011 and 2015. The city is still waiting for the remaining $1.2 million. Pacella says the recreation commission will ask to spend a portion of it on maintenance equipment, like new mowers, to continue to care for the courses. Much of it, though, he expects to set aside "for a rainy day." "All the other courses are in pretty good shape," Pacella said. "We make the experience the best we can for our folks and balance that with what needs to be done." Ruling Reversed in Fight Over Tax Valuation of Wellmark Headquarters The Iowa Supreme Court has ruled in favor of the Polk County Board of Review in a case over the property tax valuation of the Wellmark headquarters in Des Moines. Back in 2011 the Polk County Assessor set the valuation of the building at $99 million. Wellmark protested the amount to the Polk County Board of Review but following a hearing the board denied the protest. Wellmark appealed the board’s denial in district court, which set the property’s value at $78 million for tax purposes. The Board of Review appealed that decision but it was affirmed by the appeals court. The board then asked the Iowa Supreme Court to review the case. In a ruling released Friday, the Iowa Supreme Court justices reversed the district court’s ruling and agreed with the board’s original valuation of $99 million. The court pointed out the Wellmark headquarters cost about $150 million to construct and, “we do not think any reasonable depreciation of this new building can bring the value below the $99 million established by the Board.” Lenawee County homeowners to miss property tax drama Tax assessment change notices will soon be mailed to Lenawee County homeowners. But they will see not see the kind of drama taking place in “big box store” assessments and taxes on industrial property. Residential property owners will see only slight changes in taxable assessments for this year, said Martin Marshall, Lenawee County administrator and equalization director. Last year’s inflation rate in Michigan will limit increases to 0.3 percent for assessments that tax bills will be based on this year. “There’s probably not going to be much activity at the boards of review this year,” Marshall said.

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Township and city boards of review will begin to hear assessment appeals from property owners in the week that begins March 14. Taxable assessments for property sold in the past year would rise to match current market value. But for property without an ownership change, state law limits annual increases to the inflation rate up to a maximum of 5 percent. Marshall said property owners should still check the equalized value portion of their notices for errors. Some parts of the county will see some significant increases in agricultural property values this year, he said. There are also areas where residential property values have popped up, he said, and some commercial property values as well. Overall, Lenawee County will see little growth in its tax base with the limit on taxable assessment increases, he said. Gains from new construction could be offset by losses from industrial and commercial property, he said. This will also be the first year for property taxes to be eliminated on industrial machinery and equipment, classified as personal property. State laws phasing out taxes on some personal property call for the state to make up revenue that counties and local governments will lose. “All of that has yet to be worked out,” Marshall said. No clear mechanism to calculate and replace the tax losses has been rolled out in Lansing, he said. Controversy continues over tax assessments on big box stores owned by retail chains. Commercial property owners won appeals to the Michigan Tax Tribunal in 2014 that were upheld by the Michigan Court of Appeals. In Lenawee County, assessments of $50 to $55 per square foot on big box stores have been lowered to $40 to $45 per square foot, Marshall said. In the Upper Peninsula and in the Detroit area, assessments have been lowered to $25 to $30 per square foot, he said. The commercial property owners argued assessments should be based on what the buildings might sell for as vacant property rather than include current use to calculate value. On Nov. 4, Marshall testified as an expert at a hearing before a Michigan House of Representatives committee on bills to reform commercial assessments. He was president of the International Association of Assessing Officers last year.

Property tax increase proposed for Sacramento levee fixes Sacramento flood-control officials plan to ask landowners for more money to improve the city’s levees, amounting to an average $42 increase in property taxes. The work is needed primarily to prevent seepage through levees along the Sacramento River from downtown south to Freeport. Plans also include doubling the size of the Sacramento Weir, located along the Sacramento River near the Interstate 80 overpass, to divert more floodwaters into the Yolo Bypass. These projects are required following regulatory changes in 2013 by the U.S. Army Corps of Engineers, which imposed stricter control over river seepage through levee foundations. The projects are also needed to satisfy a 2007 state law, which requires all urban areas to achieve 200-year flood protection by 2025. Rick Johnson, executive director of the Sacramento Area Flood Control Agency, said SAFCA has known for some time that the levees need more work. But the new requirements boosted the cost from about $335 million to an estimated $1.6 billion.

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Sacramento homeowners currently pay, on average, an assessment of $57 per year as part of the Consolidated Capital Assessment District. This money serves as a local match for larger piles of state and federal money. The proposed increase would add an average of $42, for a total of $99 per year. “Unless the assessment passes,” Johnson said, “we don’t have the funding ability right now for the new work that’s required.” If the work doesn’t get done, he said, the Federal Emergency Management Agency could declare that Sacramento no longer meets standards to survive a 100-year flood (an event with a 1 percent chance of striking in any given year). This could bring a building moratorium across the core of the city, like the one recently lifted in Natomas after seven years, and a flood-insurance requirement. Johnson emphasized the levees in question do not pose an immediate safety risk. They simply do not meet newer safety standards. “We want to go ahead and get that work done quickly so it doesn’t trigger a FEMA warning,” he said. The improvements are described in an Army Corps study known as a “general re-evaluation report.” The Army Corps expects to deliver the study to Congress for authorization in April so the work is eligible for federal money. But federal funding can take years. Rather than wait, SAFCA officials plan to seek the property tax increase and start the levee improvements on their own, as they did in Natomas. The SAFCA board of directors, composed of local city and county elected officials, will hold a public hearing on the proposal on Thursday. A final decision is expected April 1. SAFCA must comply with Proposition 218, a state law governing special-purpose taxes. This requires landowners to vote in an election by mail. If approved by the SAFCA board, ballots would be mailed to property owners in early May. The measure requires a majority vote to pass. Sacramento-area voters have approved similar increases in the past. In 2007, for instance, they overwhelmingly backed a $326 million property tax to improve Folsom Dam and strengthen levees along the Sacramento and American rivers. If the tax increase is approved, Johnson said levee construction could begin in 2017. The work involves building slurry walls inside 6 miles of existing levees to stop deep underseepage. Although this was done previously in numerous areas of Sacramento’s Pocket neighborhood, some were not built deep enough while other areas still need this upgrading. SAFCA estimates about 270 mature trees must be removed to make way for the work. Erosion control is also required, which may involve placing boulders, known as “rip-rap,” along miles of the levee’s waterline. But no acquisition of private property is expected, Johnson said. That is partly because the Sacramento Weir will be enlarged, boosting its capacity to divert water away from the city. Katy Grimes, president of the Sacramento Taxpayers Association, said she is “skeptical” about the need for a tax increase. She said her board of directors will discuss whether to take a position on it. “We typically oppose these things unless there’s a really, really good reason,” Grimes said. “I think it’s going to take a lot of convincing, to be honest.” Others say it’s a small price to pay for safer levees. “Do I think the assessment is necessary? You bet your life I do,” said Bill Edgar, a Pocket homeowner who is also president of the Central Valley Flood Protection Board, a state agency. “Flood control is our worst infrastructure problem in Sacramento. We’ve got to begin to understand that this particular problem is never solved.”

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CAD offers updated property tax info New and updated property tax information has just been compiled by Titus County Appraisal District and is available now to assist taxpayers. Geraldine Hull, chief appraiser of the Titus CAD, says the information is current and covers a wide range of topics, such as taxpayer remedies, exemptions and appraisals. It also has information for select groups, such as disabled veterans and persons age 65 or older. “Whether you are a homeowner, business owner, disabled veteran or taxpayer, it’s important you know your rights concerning the property tax laws.” Hull said. “You can contact us about any property tax issues with full confidence that we will provide you the most complete, accurate and up-to-date available information to assist you.” Normally, taxpayers receive a notice of appraised value from the county appraisal district. The city, county, school districts and other local taxing units will use the appraisal district’s value to set property taxes for the coming year. Notice of appraised values are normally mailed in the months of April and May of each year. Property owners who disagree with the appraisal district’s appraisal of their property for local taxes or for any other action that adversely affects them may protest their property value to the Titus County Appraisal District’s Appraisal Review Board. Information is also available from the CAD about: Property Tax Exemptions Non-profit organizations that meet statutory requirements may seek property tax exemptions and must apply to their county appraisal district by a specific date. Businesses that receive tax abatements granted by taxing units; ship inventory out of Texas that may be eligible for the freeport exemption; store certain goods in transit in warehouses that are moved within 175 days; construct, install or acquire pollution control property; own and operate energy storage systems; convert landfill-generated gas; or store offshore drilling equipment while not in use may also be eligible for statutory exemptions. Exemptions for Disabled Veterans The law provides partial exemptions for any property owned by veterans who are disabled, surviving spouses and surviving children of deceased disabled veterans. This includes homesteads donated to disabled veterans by charitable organizations at no cost to the disabled veterans and their surviving spouses. The exemption amount is determined according to percentage of service-connected disability. The law also provides a 100 percent homestead exemption for 100 percent disabled veterans and their surviving spouses and for surviving spouses of U.S. armed service members killed in action. Rendering Taxable Property If a business owns tangible personal property that is used to produce income, the business must file a rendition with its local county appraisal district by a specified date. Personal property includes inventory and equipment used by a business. Owners do not have to render exempt property such as church property or an agriculture producer’s equipment used for farming. Renditions are due April 15, 2016. An extension may be granted must the owner must request this extension in writing. Property Taxpayer Remedies

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This Comptroller publication explains in detail how to protest a property appraisal, what issues the county appraisal review board (ARB) can consider and what to expect during a protest hearing. The publication also discusses the options of taking a taxpayer’s case to district court, the State Office of Administrative Hearings or binding arbitration if the taxpayer is dissatisfied with the outcome of the ARB hearing. Homestead Exemptions A homestead is generally defined as the home and land used as the owner’s principal residence on Jan. 1 of the tax year. A homestead exemption reduces the appraised value of the home and, as a result, lowers property taxes. Applications should be submitted to Titus County Appraisal District. Productivity Appraisal Property owners who use land for timber land production, agricultural purposes or wildlife management can be granted property tax relief on their land. They may apply to Titus County Appraisal District for an agricultural appraisal which may result in a lower appraisal of the land based on how much the taxpayer produces, versus what the land would sell for on the open market. Residence Homestead Tax Deferral Texas homeowners may postpone paying the currently delinquent property taxes due on the appreciating value of their homes by filing a tax deferral affidavit at their local county appraisal district. This tax relief allows homeowners to pay the property taxes on 105 percent of the preceding year’s appraised value of their homestead, plus the taxes on any new improvements to the homestead. The remaining taxes are postponed, but not cancelled, with interest accruing at 8 percent per year. Deferral for Age 65 or Older or Disabled Homeowners Texans who are age 65 or older or disabled, as defined by law, may postpone paying current and delinquent property taxes on their homes by signing a tax deferral affidavit. Once the affidavit is on file, taxes are deferred, but not cancelled, as long as the owner continues to own and live in the home. Interest continues to accrue on unpaid taxes. You may obtain a deferral affidavit at the Titus County Appraisal District. For more information about these programs, go by Titus County Appraisal District at 2404 West Ferguson Road, Mount Pleasant, or write to PO Box 528, Mount Pleasant, TX 75456. Titus County Appraisal District has a web site which has additional information. Information is also available on the Comptroller’s Property Tax Assistance Division’s website.

TIF properties come back on tax rolls The board of the Tax Increment Financing Commission of Kansas City voted Wednesday to direct back to Kansas City Public Schools and other tax-supported institutions a tax revenue stream that had been diverted to help pay for new development. By a 10-0 vote, the board voted to terminate all but one remaining TIF project — the McCownGordon Construction headquarters at 422 Admiral Blvd. — in the Civic Mall TIF Plan, which covers more than 20 blocks on Downtown's east side. Originated in 1994, the plan helped finance six other TIF projects:

The Charles Evans Whittaker U.S. Courthouse at 400 E. Ninth St.

Parking for the courthouse

The Federal Aviation Administration Building at 901 Locust St.

Parking for the FAA Building

Two Ilus W. Davis Civic Mall projects

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All TIF-reimbursible expenses for those projects have now been covered, meaning the taxing jurisdictions will be receiving a two-pronged windfall. First of all, the taxing jurisdictions benefit from a pro rata distribution of $1.7 million in surplus funds from a Civic Mall bond issuance that was paid off in December and a no-longer-needed special allocation fund. Of that amount, $1.424 million had been generated by diverting property tax revenue, which is the primary source of revenue for KCPS. It will receive back $884,601 of the surplus property tax revenue, while the city will receive $281,901 and six other jurisdictions will receive lesser amounts. "We finally get to share in revenue from a TIF plan being terminated," Kevin Masters, who represents KCPS on the TIF Commisson board, said. But that's not even the best part of the story, Jack Feldman, a tax incentive specialist with Jackson County, said. In addition to the lump sum payments, the $596,687 in property tax revenue ($474,351) and economic activity tax revenue ($122,336) that has been getting diverted annually to Civic Mall TIF projects will now begin flowing back to the taxing jurisdictions. In recent months, the public's focus has been on the short-term pain created by incentives, which require the taxing jurisdictions to forgo millions of dollars in revenue every year.

Bill Aims to Shift Burden of Proof in Some Property Tax Cases Sen. Howard Stephenson, R-Draper, says he wants to stop taxing entities from "playing games" with property tax valuations. Stephenson's SB112 puts the burden of proof on the assessor if, after a property owner appeals an initial valuation, the assessor increases the assessed value. "Some local assessors will say, 'If you're gonna protest the valuation out there, I'm gonna put it on higher. That'll teach you'," says Stephenson. "We have that kind of thing going on." Stephenson says it's not fair for an assessor to increase the valuation after the property owner challenges it. "This has to be addressed. Some county assessors are vindictive if somebody dares to challenge their value," says Stephenson. "We have cases where that has occurred." Stephenson says he expects some pushback about the change. I'm sure assessors will be livid about it, but they shouldn't be able to change horses in the middle of the stream."

Should officials raise property taxes to fix roads? Per city code, there is a 5 percent limitation to raising the maintenance and operating tax rate. That same limit is not on the debt tax rate. The debt tax rate is used to pay off principal and interest annually. In the state of Texas, there are limits imposed on a city, such as the total tax rate cannot exceed $2.50 per $100 assessed valuation. However, in the past, the Texas Attorney General has limited the debt tax rate for Texas cities not to exceed $1.50 per $100 assessed valuation. The City of Victoria Charter total tax rate limitation is $2 per $100 assessed valuation. Voters, however, can approve a bond sale, which would require a debt tax rate increase, which would raise the debt tax rate and the overall tax rate.

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Victoria has a big problem when it comes to its roads. The damage to them is far and wide. Residential streets are riddled with potholes and have begun to pucker under the weight of traffic. In some areas, the asphalt has started to detach from the roadway. City officials and residents agree the roads need to be repaired. However, opinions differ on where the money will come from and when the work will be done. The city now takes a conservative "pay-as-you-go" approach using local funds and debt to repair residential roads. The plan is long-term and likely will never end, given roads have a lifespan of 30 to 50 years. Meanwhile, residents living in neighborhoods somewhere toward the middle of the list must sit back and watch as their roads continue to crumble with a resolution promised 20, 40 or 60 years in the future. About 32 percent of city residential roads are in need of repairs, a cost that's estimated to be upward of $156 million. Should city officials raise property taxes enough to fix all of these roads? Pro: City needs tax boost to catch up to problem Raising taxes is a solid way to get the funds needed to fix roads now. Residents living in neighborhoods riddled with shoddy repair and crumbling roadways say paying more in taxes would be well worth the peace of mind a smooth ride would offer. Jan and Scott Leigh, who live in the upscale Woodway subdivision, are believers in a higher tax rate to fix roads. Christopher Medrano, who lives in the less affluent North Heights addition, also would be willing to pay a little more to fix the uneven roads in his neighborhood - some of the worst in the city, according to the city's annual inventory of street conditions. Medrano said he wouldn't mind paying more taxes as long as he was guaranteed the money would go to road repairs. Medrano lives on Levi Street, ranked one of the worst in the city with a score of 48 out of 100. For years, he said, he complained to city officials about the road condition, including the lack of a drainage system. And while the streets in his addition are in the process of being repaired, he questions why it took so long. "It shouldn't take this long," he said. Residents say it's time to go back to the drawing board and suggest city officials explore other options to get roads fixed faster. In order to fix roads - a multimillion dollar expense - the city typically borrows a portion of the money needed. City Manager Charmelle Garrett said the city is at its debt capacity and it would be fiscally irresponsible to take on more debt. The city has just over $175 million in debt outstanding. Raising taxes would be a way for the city to generate wiggle room in its debt capacity. By law, the city could raise its maintenance and operating tax rate by 5 percent. That would be 1.23 cents. The amount generated from that increase both in revenue and increased bond capacity wouldn't come close to the $156 million needed to fix all roads, but it would allow the city to tackle one or two projects a year. Increasing taxes once or even in increments over a few years would be a way to step up the city's long-term plan, supporters say.

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For Scott Leigh, who said the bad roads in his subdivision - and across the city - have put a dent in residents' quality of life, raising taxes makes sense. He encourages city officials to not only use all the money that becomes available when bonds are paid off to fix roads but also consider raising taxes. "I'd be willing to pay a couple more bucks a year to get this thing fixed," Leigh said. "It casts a bad light on the city for those moving here or bringing business here." Con: Raising taxes wouldn't bring in the needed revenue Raising taxes would be fiscally irresponsible for a growing city such as Victoria, officials said. Taxes would have to be raised, at the maximum allowed rate, for the next decade to put a dent in the $156 million needed to fix city roads rated 84 or lower on a scale of 1 to 100 with 100 being the best score. The likelihood of city officials voting to raise taxes is slim, said Mayor Paul Polasek. "It took a long time to get here," he said about the road damage, adding a long-term solution will be needed to fix the problem. "I think we have a plan in place that's working and we need to continue to support funding the plan." The city currently uses $28 million of its budget to fund capital improvement projects per year. Each year, officials update the list based on which streets need repairs the most and take into account the cost of repairing the roads. Some older roads have utilities underneath that need repairs, which, combined with the cost to overhaul the roadway, makes the project too expensive to do right away. The city also uses bonds to help fund infrastructure projects. Victoria is at its debt capacity, meaning it has borrowed what it can comfortably repay and assuming more debt and raising taxes would be a financially unstable move, said City Manager Charmelle Garrett. The city's outstanding debt is just over $175 million. While small pockets - about $2 to $5 million - of available debt will open each year going forward, the city will not have the debt capacity to borrow a large sum of money until 2024. The city will be able to borrow about $44.5 million that year. When looking at how much revenue would be generated by raising taxes at the maximum allowable rate, city officials say the payoff would not be big enough. The city is legally limited to a 5 percent increase on its effective maintenance and operations tax. Only voter approval could override this limit. The city's current taxable value is about $3.7 billion - with about $600,000 in frozen values. Each penny brings in about $370,000 if 100 percent of owed taxes are collected. About 97 percent of taxes are typically collected, so a one-cent tax rate would bring in $358,767 of additional revenue. In order to put that in perspective of what could be accomplished with those funds, the improvements planned in 2020 for the Castle Hills West subdivision are estimated at $4.85 million.

Tax assessment appeals persist in Baltimore

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As the state deadline to file appeals of property assessments looms, officials are preparing for a flood of petitions — particularly in Baltimore, where property owners routinely appeal their tax assessments at rates double or triple the statewide average. Baltimore property owners filed about 6,000 appeals of new assessments in the fiscal year that ended last June — about one in 12 new notices sent in the city, according to estimates by the state Department of Assessments and Taxation. The city's appeal rate routinely is well above the roughly 3 percent state average in recent years. The high appeal rate has left Baltimore's property tax assessment appeals board with a backlog so bad it is bringing on a new clerk to help, said Kent Finkelsen, state administrator of the boards. "I've never seen anything like it," said Finkelsen, who has worked on assessments for more than 20 years. "We were shocked." There are many factors that drive up the rate of appeals in the city — not least its high tax rate and numerous rental properties, whose owners are not shielded from assessment increases and are more inclined to seek relief, said Charles Cluster, supervisor of real property assessments for the Department of Assessments and Taxation. But critics say Baltimore's elevated appeal numbers also point to the weakness of the state's statistics-based assessment process when faced with the complexity of the city's housing market, which has homes and neighborhoods that can vary widely block by block. "It's a little easier to do mass appraising in the county and get it right," said John Hentschel, president of Hentschel Real Estate Services, a consulting and advisory firm that also performs appraisals. "It's a lot harder to do it in the city because of the non-homogeneity." With distressed sales having surged in the past few years, critics say assessment values are muddled further by the state department's emphasis on what Cluster described as "good sales" — those with a willing buyer and seller. Distressed sales represented nearly one-third of the transactions in the city in 2015. "They get it right in the aggregate, but it's not fair to the individual homeowner who wants to be confident that the assessment of their house is accurate," said Larry Giammo, a former mayor of Rockville who now works in real estate and issued a report several years ago that questioned the accuracy of Baltimore assessments. Cluster said the high appeal rate in Baltimore is "obviously a concern in terms of our office and just trying to make sure we're doing the right thing in the city." But he said Baltimore appeals have fallen since a statewide spike amid the housing crash, even if not as fast as it has in other jurisdictions. Assessors evaluate properties once every three years on a rotating basis, updating more than 700,000 accounts each year. To reach a valuation, SDAT staff divide the city into neighborhoods, grouping homes in each area by housing type and then looking at sales in those groups to determine what a property is worth for tax purposes. "Could any system be improved? I believe so," Cluster said. "But I do think that Maryland's system of the triennial assessments using sales and fair-market value is a good system." Figuring out neighborhood boundaries and how to classify homes is complicated, making the assessment process opaque, said Rory Coakley, president of Coakley Realty, a Rockville-based real estate firm that also handles appeals cases. And as parts of Baltimore improve and others lag, he said, assessors "may be getting ahead of themselves," especially since they often do not visit properties or do in-depth reviews. While the state department is technically required to physically inspect properties, in practice it has enough staff to visit only a fraction — sometimes just a quarter of residential accounts, according to state reviews of the agency. That is unlikely to change. This year, the Department of Assessments and Taxation has asked the legislature to formally repeal that requirement and allow staff to use aerial photography as a substitute, inspecting properties only under certain conditions. The request runs counter to the conclusion of the 2014 Maryland Assessment Work Group, which found that for assessments to be accurate, in-person inspections "are necessary on some periodic basis." Cluster declined to comment on the bill.

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State Sen. Bill Ferguson, a Baltimore Democrat on the Budget and Taxation Committee, said the agency should not do away with physical inspections, but he supports targeting visits by using data — such as whether there are a high number of appeals. Other significant changes, such as moving the department away from its once-every-three-years evaluation schedule, also might be in order, he said. The 2014 work group was created after a series of audits identified weaknesses in the department's practices. "I am very supportive of a comprehensive review of our assessment process overall," Ferguson said. "I don't believe that there is a fundamental problem in the system, but I do think we can always make it more accurate and allocate resources more efficiently to improve that accuracy." Assessment appeals, which are due for the most recent round of notices by Feb. 11, typically increase during tough economic times as property owners seek relief on tax bills. During the housing crash and recession, first-level appeals of new assessments soared to nearly 50,000 statewide in fiscal year 2008 before subsiding to more traditional levels of 20,000 to 30,000 a year. The first hearing occurs at a local assessment office. Between 30 percent and 35 percent of cases typically win relief at the first level, according to Cluster. If property owners are unsatisfied, they can take the case to local property tax assessment appeals boards, which are staffed by outside gubernatorial appointees, and ultimately to the Maryland Tax Court. In Baltimore, the number of first-level appeals in Baltimore peaked in 2012, with more than 8,000 cases. Their numbers have since fallen, but remain well above the low of about 3,520 in 2005, the only year since at least 2003 when Baltimore's rate of appeals was in line with the state average, according to department documents. The Baltimore property tax assessment appeals board faces a record backlog of more than 6,000 cases — about two thirds of the 9,136 cases pending before appeals boards statewide, Finkelsen said. Even when the assessment office acknowledges an error, it can be hard to get the correction to stick, said Brian O'Reilly, 39, a federal worker who owns several rental properties in Baltimore. O'Reilly purchased a vacant Reservoir Hill home — valued by the state at $151,000 — through a 2013 foreclosure sale for $49,000. He appealed the assessment, winning a reduction to $60,000. But three weeks later, during the new round of assessments, he received a notice that the property was now worth $214,000 — an increase, albeit one phased in over three years, that was more than $60,000 above the first assessment. "It was like, 'This can't be happening,'" said O'Reilly, who has appealed assessments on other properties as well. "It isn't the worst example, but it's the most ridiculous." O'Reilly said he does not buy the argument that an unevenly improving housing market accounts for the variation, since valuations ultimately lead to how much revenue municipalities and the state can collect without changing tax rates. "This is clearly a concerted, willful effort," he said. "They're systematically, unfairly assessing the values to be much higher than they should be." Cluster said the state assessments department is set up to work independently from local jurisdictions — although those jurisdictions help fund the agency — and he has never felt pressure to meet certain figures. The department is working to improve accuracy and incorporating new technology into its procedures, he said. The Department of Assessments and Taxation also is linked into permitting systems in eight jurisdictions, including Baltimore, so it is informed automatically when new permits are filed. As information available to property owners through online databases becomes more widespread, appeals are likely to rise, said Cluster, adding that his office is open to calls from property owners.

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"People have the right to appeal," he said. "We would just like to make sure that we're educating them and they're also educating us on their neighborhoods."

Texas can abolish state property tax With property taxes due Monday, there’s no time like the present to think about tax reform. As the Tax Foundation points out, Texas has the 14th highest property tax burden. “Texas’ harsh property tax climate is creating serious financial hardship for homeowners and businesses all across this great State,” said James Quintero of the Texas Public Policy Foundation. “And without reasonable limits on how fast property taxes can grow, the problem only gets worse by the day. Local property tax bills continue to soar past sound economics. From 2000 to 2013, research shows that local property taxes rose by 101 percent, yet population and inflation grew just 70 percent.” There are some solid arguments for abolishing the property tax and replacing it with a modified consumption (sales) tax. First, the property tax undermines fundamental property rights. The power to tax is the power to take. It’s common for taxing entities to seize property for unpaid taxes, then sell that property. Government shouldn’t have that power. “Property taxes do not allow flexibility in the face of financial hardship,” the TPPF pointed out. “Individuals are required to pay tax based on a prior purchase and the existence of an illiquid fixed asset, regardless of their current income or cash holdings. Property taxes are based on the value of land, which can fluctuate independent of a person’s actions. A spike in property value can quickly outstrip the owner’s ability to pay, pricing family out of land even if they’ve owned it for generations.” Next, the property tax system lacks transparency. “More than 4,000 localities levy property taxes, obscuring from taxpayers exactly who is responsible for raising them, how that money is spent, and whether any increase was necessary,” the TPPF contended. “Homeowners are obliged to invest a substantial amount of resources should they wish to understand who has a claim on their money. Local taxing units therefore do not often confront strong political pressure to exercise discretion when weighing tax increases. The result is a gradual but unceasing rise in property taxes.” Finally, property taxes are a cumbersome, wasteful way to pay for government services. “The property tax is an unfair and inefficient way to fund government,” said economist Dr. Art Laffer. “Texas would gain hundreds of thousands of new jobs and tens of billions of dollars in personal income just by abolishing the property tax and replacing it with a revised sales tax.” What kind of sales tax hike would be necessary to replace property taxes? Quintero said a sales tax rate of 11 percent (compared to today’s rate of about 8.25 percent), if current exemptions - such as food and many medicines - are lifted. But keeping current exemptions, the rate would need to be closer to 16 percent. We should note that the federal judge who ruled Texas’ school finance system unconstitutional specifically ruled against the property tax system, because of the disparities between property-rich and property-poor districts. Abolition of the property tax system isn’t going to happen quickly. But it’s time to start discussing it.

Orange County Prepares For 2017 Property Revaluation At least once every eight years, North Carolina requires all its counties to conduct a property revaluation to establish the fair market value for all homes in the state. “The main thing with the revaluation is to reestablish the equity in the market,” said Orange County tax administrator Dwane Brinson. “Neighborhoods appreciate and depreciate at different rates. Once you do a revaluation, the goal is to just reestablish that equity so that everyone is paying on the current market value of their property.” The last revaluation was done in January 2009 and the next one will take effect January 2017. Brinson said urged residents to remember that their current tax assessments use the 2009 value of their property, which will change in 2017. “That increase or decrease in the value is not for that one year, it actually spans the past eight years,” he said. Brinson said the county is looking for more input from the community and because of this, the Board of Commissioners extended the deadline to February 29 for submitting property listings.

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The county sent listing forms to residents on December 31, 2015. Included in those envelopes was a new form that Brinson said the county has never tried before. It shows residents the county’s record of their home and lets people make corrections if information is false. “We’re asking residents to take a look at that,” he said. “And if something is wrong with the property characteristics, to let us know ahead of time. That way we can go in, correct the records and make sure that we’re valuing the property for what it is.” From December 2016 to February 2017, the county will send value change notices to residents.

Detroit cuts property assessments for most homeowners The city slashed property assessments for most Detroit home owners Monday, a move expected to cut the cost of owning a home in one of the most heavily taxed cities in the state. Cuts for about 95 percent of residential property owners start next summer and range from 5 percent to 15 percent and reduce the assessed value of Detroit properties by almost $213 million, Mayor Mike Duggan announced Monday. Assessments, however, will rise 5 percent, for about 5,400 parcels mostly in the downtown and Midtown areas. The city has cut assessments three years in a row, but the reduction announced Monday covers a broader portion of Detroit. The reduction comes as city officials conduct the first citywide property reassessment in almost 50 years and try to stem an exodus that has seen the city's population shrink about 62 percent from a high of 1.8 million people in 1950. “While good news for the city, if you’re thinking about buying a house, I’d say this is the year to do it because we will be very unlikely to see assessment reductions like this next year,” Duggan said. The steepest cuts — 15 percent — will happen in neighborhoods north of downtown, Duggan said, followed by 5 percent cuts to the southwest and east sides of Detroit. The rise in commercial and industrial assessments offsets the reduction in assessments for residential properties, city Finance Director John Naglick said. The previous two rounds of cuts have not hurt city finances, Duggan said. Property tax collections have risen from 67 percent two years ago to 72 percent last year. "This year, we are collecting at 78 percent," Duggan said. At $97.1 million, property tax revenue is running $10 million ahead of budget, he added. "More people are staying in their homes, avoiding foreclosure and are paying taxes," Duggan said. The cuts announced Monday should help more residents, said Detroit resident Jackie Grant, 68. Grant lives in the MorningSide neighborhood on the city's east side in an 1,800-square-foot Tudor-style home and fought her property tax assessment about six years ago. She volunteers helping residents facing foreclosure and said the cuts announced Monday could help stabilize neighborhoods. "The potential effect is more people can stay in the city and not be foreclosed," Grant said. The assessment reduction comes amid an ongoing review by Chief Assessor Gary Evanko and his team of current assessments and home sales dating back to October 2013. "Each individual property will have new valuation ... and that will serve as a basis for Detroit land records going into the future," he said.

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Detroit has one of the highest tax rates nationwide — 69 mills, or $69 for every $1,000 of assessed value -- and is plagued with problems, including unfairly distributed tax burdens, inflated assessments, high rates of tax delinquency, and thousands of foreclosures, according to a 2015 report by the Lincoln Institute of Land Policy. The institute recommended that Detroit cut its property-tax rate. "Detroit has the highest tax rate of any major U.S. city, more than double the average rate for neighboring cities," the report concluded. "Lowering the rate could reduce delinquency and help increase property values, and could help offset increased tax burdens that may otherwise result from reducing abatements or eliminating the taxable-value cap." The reduction also comes less than three years after Gov. Rick Snyder cited the city's high tax rate while authorizing Detroit to file the largest municipal bankruptcy in U.S. history. Detroit emerged from bankruptcy protection 14 months ago after shedding about $7 billion in debt.

Local support for payment in lieu of taxes continues Local officials are hoping a long-overdue state budget will contain a much-needed increase to payment in lieu of taxes (PILT) on state-owned forest and game lands. “Since the 2015-16 state budget impasse dragged on, attention has turned toward having the PILT increase approved through the budget settlement process,” Potter County Commissioner Paul Heimel told The Era on Thursday. “We remain confident that our supporters are fully committed to that.” One of those supporters is state Rep. Martin Causer, R-Turtlepoint, who, along with House Majority Whip Mike Hanna, introduced legislation to increase the PILT in 2015. “Land tax fairness is certainly one of the most important issues facing our region and other rural areas across the Commonwealth,” Causer said. “Government ownership of vast amounts of land is shrinking the local tax base, leaving local governments and school districts with nowhere else to go but the pockets of private property owners when it comes time to balance their budgets.” Under House Bill 344, the increase to PILT on state-owned forest and game lands would go from $3.60 per acre to $6 per acre and be divided equally among municipalities, school districts and counties. For House Bill 343, 20 percent of total revenue brought in from the sale of timber, oil and natural gas on most state-owned lands would be put into a restricted fund for disbursement to local governments, proportionally based on the number of acres of state land in every municipality, school district and county. “We have a strong coalition who continues to work to build bipartisan support for this legislation, which is awaiting consideration in the House Environmental Resources and Energy Committee,” Causer said. To state Senate President Pro Tempore Joe Scarnati, R-Brockway, the tax fairness issue is vital to the region, and he hopes it will move forward in the House soon. “In 2006 I fought hard to increase the PILT from $1.20 per acre to the current $3.60 per acre,” Scarnati said. “However, it is clear that this amount should be increased once again. Increasing the PILT is a vital part of ensuring fairness for rural areas of our state, by making sure that rural Pennsylvanians are not burdened more than those who reside in more populated areas of our Commonwealth.” The effort has also garnered support from Gov. Tom Wolf. “The administration is happy to work with local officials to understand concerns regarding the payment in lieu of taxes,” said Wolf’s Press Secretary Jeffrey Sheridan. As things move forward, several positive signs exist, Heimel said. “Senator Joseph Scarnati addressed the issue in a strongly worded and highly effective editorial carried in newspapers across the state,” Heimel said. “Representative Martin Causer alluded to the PILT issue just last week at the Denton Hill State Park

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meeting, when he pointed out the millions of dollars that state forest land generates for Harrisburg, with so little coming back to the host school districts, counties and townships.” What’s more, Heimel said officials are set to lend a hand to legislative leaders. “We have eye-opening maps and financial analysis readily accessible on our website, pastatelandtaxfairness.com, and are eager to follow up on our one-on-one meetings with more than 50 Senate and House members who now support our mission,” Heimel said. “Should the efforts to resolve this through the 2015-16 budget settlement process fail, our coalition will redouble its efforts to have the PILT increase approved through the traditional channels in the 2016-17 legislative session.” To push for cause further, Heimel, Cameron County Commissioner Phil Jones and Clinton County Commissioners Pete Smeltz and Jeff Snyder have visited with lawmakers, and they plan to meet with them again. “We'll also reaffirm the support that we've received from the County Commissioners Association of Pennsylvania, the Pennsylvania Association of Township Supervisors. Pennsylvania School Boards Association, Pennsylvania State Grange, and other organizations,” Heimel said. “But that is a last resort. We are still hoping for action any day now.” All told, Heimel said officials believe the case has been firmly established, and many state lawmakers support the measure that would provide significant benefits to school districts, counties and townships where a high amount of tax-exempt land has depleted the tax base.

De Blasio says property tax cap for NYC is a 'non-starter' Mayor de Blasio said a property tax cap for New York City is a "non-starter" and state lawmakers' focus on it took away from pressing budget issues. "Honestly, it's a non-starter," de Blasio said of imposing the 2% cap on tax levies, which other municipalities in the state are forced to abide by, on the city. "That cap would be very dangerous for New York City." When de Blasio traveled to Albany this week to testify about the state budget, legislator after legislator pressed him about property taxes. De Blasio had hoped to push back against possible cuts to Medicaid and CUNY funding, in addition to talking about mayoral control of education and affordable housing. Senate Majority Leader John Flanagan said Thursday that there was no ambush at work in lawmakers’ focused attention on property taxes. "There were issues that probably didn't get the time they deserved," he said Thursday. A measure to force the city to adopt the cap has passed the state Senate, but has virtually no chance in the Democrat-dominated Assembly. Gov. Cuomo's budget threatened to force the city to take over hundreds of millions in CUNY and Medicaid funding now paid by the state, but the governor has since pledged the move won't cost the city a penny. "I appreciate that assurance and I will hold him to it," de Blasio said. "I do think it's an issue that has to be looked at carefully, and that we all have to make sure that things work out as they have been pledged." Senate Majority Leader John Flanagan said Thursday that there was no ambush at work in lawmakers’ focused attention on property taxes. Speaking at the Association for a Better New York in Manhattan, Flanagan said while the tax rates in the city might not be going up, property value assessments are - and they're going up very high." "It's an issue that's capturing people's attention," he said. "I know the city doesn't like that. I know it makes people uncomfortable. I know the property tax cap has had a real benefit across the state of New York."

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The taxman says Trump’s UN Tower is the most valuable condo building in NYC Mayor Bill de Blasio may have little love for Donald Trump, but behind closed doors his administration has good cause to thank the real estate mogul and invoke his catchphrase, “It’s gonna be huge!” That’s because the city’s bean counters have calculated his Trump World Tower at 845 United Nations Plaza as the most valuable condo building in the city for tax collection purposes. The 362 condo units in the Midtown East building, which Trump completed in 2001, have a total market value of $238.27 million in fiscal year 2016, according to a TRData analysis of the Department of Finance’s preliminary tax rolls. The other buildings on the list of the 10 highest market value assessments in 2016 form a row of familiar facades — Extell Development’s One57, Zeckendorf Development’s 15 Central Park West, Irwin Chanin’s 25 Central Park West, and the Zeckendorf’s 61 Irving Place all feature on the list. Despite measuring what’s known as “market value,” the city’s assessment figures are not designed to estimate the price of properties were they to be sold on the market. All told, average condo tax assessments across the city rose 10.7 percent last year as the total market value of taxable property crossed the $1 trillion threshold. According to TRD‘s analysis of tax roll data, Trump’s tower increased in value at a rate just slightly higher than the average – 10.9 percent – to leapfrog past the previous year’s “most valuable” building: Zeckendorf’s 15 Central Park West. The two buildings’ market values were separated by less than $1.5 million in fiscal year 2015. But the market value of the limestone-clad Robert A.M. Stern climbed less than 1 percent to $216.32 million to fall to the No. 2 spot on the list. At least one of the Zeckendorf brothers may be quick to tip his hat to the competition. Younger brother Arthur Zeckendorf is a contributor to Trump’s presidential campaign, and has in the past cited the Donald as the person who most influenced him in business. Below is a ranking of the condo buildings with the largest preliminary market values.

Department of Finance’s market value for condo buildings

Show entries Search:

No. Address No. of

Units

Market Value FY

2016

% change

YoY

2015

rank

1 845 United Nations Plaza 362 $238,273,008 10.94 2

2 15 Central Park West 230 $216,320,007 0.034 1

3 157 West 57th Street 94 $209,841,006 19.43 5

4 20 West 64th Street 655 $195,726,985 15.28 10

5 322 West 57th Street 582 $194,612,258 15.08 11

6 1 Irving Place 647 $192,122,006 9.4 6

7 350 West 42nd Street 551 $191,085,874 -1.82 3

http://therealdeal.com/2016/01/14/nycs-finance-department-to-lease-175k-sf-at-former-verizon-building/

http://therealdeal.com/2016/01/18/nyc-real-estate-assessed-at-1-trillion/

http://therealdeal.com/2016/01/11/see-how-trump-managed-to-build-a-90-story-building-right-next-to-the-un-video/

http://therealdeal.com/2016/01/04/a-house-divided-zeckendorf-brothers-split-on-clinton-trump-camps/

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No. Address No. of

Units

Market Value FY

2016

% change

YoY

2015

rank

8 220 Riverside Boulevard 416 $187,313,990 7.32 8

9 25 Central Park West 422 $181,643,997 6.84 9

10 80 Riverside Boulevard 269 $179,525,997 10.66 12

Showing 1 to 10 of 10 entries

Source: TRData analysis of Department of Finance’s preliminary tax roll

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UNIT STAT S ebruary 2016 · Cincinnati's golf courses are getting spiffed up clubhouses, nicer cart paths, and better irrigation - and it's not costing city taxpayers anything. Thanks