Win a property-tax reduction

Communities are feeling the sting of tumbling property values as more taxpayers appeal their assessments — and successfully lower their tax liabilities.

Take the Las Vegas area, an area hard-hit by price declines. More than 6,000 taxpayers — including both residential and commercial property owners — filed appeals in Clark County, Nev., after receiving a notice-of-value card in December, up from nearly 1,400 appeals received the year before, said Michele Shafe, the county’s assistant director for assessment services. Of the 6,000 who filed appeals this time around, more than 4,500 received reductions to their assessed value, she said.

"That's about a 76% success rate for all the appeals that were filed," she said. Many of the reductions hovered around a 30% to 40% range, she said.

That represents a substantial hit for local taxing bodies, which have already suffered because of a sharp decrease in sales-tax revenue as consumers scale back their spending. One way government is making up for it: County departments will be required to cut 5% out of their budgets as less money makes its way into government coffers, she said.

And what is happening in Vegas isn't staying in Vegas: Many local governments around the country are experiencing similar revenue declines — especially those hardest hit by the housing downturn.

"The property tax is the main source of revenue in a lot of these places," said Chris Hoene, director of policy and research for the National League of Cities. "So any hit to the property tax means that there will be some cuts in services somewhere."

Communities are making cuts to libraries, parks and special events, he said. Many also are instituting hiring freezes in response to lower revenues. And Hoene said this is only the first or second year of a three- to four-year cycle of declining revenues for local governments.

In general, many communities aren't raising taxes to combat the shortfalls, at least in part because of the political fallout that would come with it, Hoene said.

"The majority are not raising taxes, simply because it's a difficult time to do so," he said. Instead, he's seeing a bigger use of fees, which are "much smaller and more incremental... and much more politically palatable to the public."

Why now?
While some areas reassess property values annually, others do only a portion of homes each year, said Jacqueline Byers, director of research for the National Association of Counties. So some homeowners may still have assessed values that reflect, say, 2007 values — and the discrepancy is evident in rapidly declining markets.

"They're watching the value of their property go down, and their assessment is on a two- or three-year-old value. That's why they're appealing," Byers said. "People are waking up to it and trying to save money."

California's system is somewhat unlike the rest of the country’s; reappraisals for property-tax purposes typically occur when properties change owners or when substantial improvements have been made. But in Los Angeles County, the assessor's office has done a proactive review of assessed values, based on market trends in the area — a process that also cuts down on the number of appeals, said assessor Rick Auerbach.

The review of 473,000 homes — bought between July 1, 2003, and June 30, 2008 — resulted in lower assessments on 334,000 single-family residences and condo units, according to a recent release. The new assessed values reflected an average $1,400 in property-tax savings for single-family homes and an average $1,100 in savings for condo units, the release said. Yet Auerbach acknowledged that other areas in the state have seen even more of an impact.

"Home values have declined and foreclosures are up," he said in the release, "but not to the same extent as in some neighboring counties." And, he indicated, the relief is temporary: "My staff is ready to act quickly and efficiently in reflecting the inevitable turnaround, as it did in processing reduced home values," he said.

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