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http://www.omniture.com --> Oregon Road Conditions & Cams Advertisement Email Story to a Friend May 14, 2006 Chris Parton, property appraiser for Jackson County, checks out a new home in southwest Medford. More appraisers will be hired by the county soon to reappraise existing homes that have made more than $10,000 in improvements without permits. (Mail Tribune / Jim Craven) On the lookout By DAMIAN MANN Mail Tribune If you've swapped your Formica counters for granite, or added a second bathroom, the county Assessor's Office might hand you a bill for additional property taxes. The county will add 40 percent more appraisers this year to look for remodeling projects or additions that so far have escaped reappraisal — an undertaking that could generate an estimated $3 million in additional tax revenue in three years. The county has been overlooking homes that have had substantial improvements, from upgraded windows to tile roofs, simply because the Assessor's Office just didn't have the staff, said Dan Ross, county assessor. "We haven't appraised many properties for the past 11 to 16 years," he said. Jackson County has earmarked $251,000 annually for three new appraisers and a lead appraiser to review its 87,000 residences. In addition, two new office assistants will be hired. Currently there are 10 residential appraisers on a staff of 36. The county is under pressure from the state to add more appraisers or risk losing $1.2 million in state grants. A recent review by the state Department of Revenue determined the Assessor's Office is understaffed. While county officials say increasing property taxes isn't the main thrust of the reappraisals, they are hoping to find additional revenue as the prospect of losing $24 million annually in federal timber subsidies looms in 2007. Jim Bucholz, manager of the assessment and taxation standards section of the state Department of Revenue and Property Tax Division, confirmed that the county was in danger of losing a state grant that helps pay for the Assessor's Office if it didn't hire additional staff to properly appraise properties. He said the reappraisal program will make sure that everyone is paying the correct amount of taxes. "I'm personally offended when I pay my fair share and another person skirts it," said Bucholz. He said the state would have required Jackson County to hire more appraisers a few years ago — before the timber money became an issue — but the county didn't have the software to keep track of reassessments that were made more complicated by Measure 50, a 1997 property tax initiative that consolidated levies. The county recently purchased new software. The money generated by the reappraisal program won't all flow into county coffers. It will be distributed among schools, cities, special districts, the county and other government entities that receive a portion of property taxes. A preliminary analysis of a 1,000-home area in east Medford showed there is the potential to raise $3 million in additional revenues countywide in the next three years. "These are taxes that people should have been paying all along," said county Commissioner Dave Gilmour. He said the program will help find homes that have been remodeled without permits and have escaped reappraisal. The county requires permits for substantial improvements to houses, or for any electrical or plumbing changes. The permits automatically trigger reappraisals. But many homeowners are doing the work themselves, with local home improvement centers offering advice and tools to get the job done. "Most people are coming in and getting the permits, but some haven't," said Gilmour. He said representatives from the Assessor's Office won't be acting as code enforcement officers who crack down on illegal structures. One of the communities that has escaped a thorough reappraisal for many years is Central Point, where Gilmour lives. "I may find my own taxes going up," he said. Jackson County hasn't been reappraising properties because the Assessor's Office staff was reduced by 50 percent in the 1980s, and because Measure 50 rolled back the value of homes to 1995-96 levels. "We're reinstating a process that we haven't done for years and years," said Ross. If the county finds a home that has been remodeled without permits, it can collect back taxes for up to five years. In Marion County, the Assessor's Office has conducted an ongoing reappraisal program that produced an estimated $17.5 million in increased assessed valuation over the past year, according to Richard Kreitzer, residential and farm section supervisor. The reappraisal work was done by seven staff members, which works out to up to $2.5 million for each assessor. Ross said the actual amount generated by the reappraisal effort in Jackson County could be far higher than the estimated $3 million, depending on what appraisers find. In rural areas, barns and horse arenas have been built without permits and will be reappraised, said Ross. "A lot of people think they don't need permits for farm buildings," he said. In residential areas, kitchens have been remodeled, windows have been replaced or other improvements have been made that aren't reflected in the property taxes. Some of the improvements might have been undertaken by the homeowner, who may or may not have needed a permit. Ross said that it is important to update county records, which show detailed information about properties that are used by real estate agents, title companies and others. The appraisers will be comparing county records with what they actually see in the field, calculating square footage and looking for more than $10,000 in improvements. Not everyone likes the idea of an appraiser looking over their property. "I don't try to hide anything, but some people do," said Walt Fitzgerald, a Sams Valley resident and government watchdog. When it comes to people stepping on his property, Fitzgerald said he wants county officials to make an appointment first. If not, he said, "You can ask them to step off your property." While many homeowners wouldn't rush to call the Assessor's Office to report these changes, Ross said, "That's what we want them to do." Reach reporter Damian Mann at 776-4476, or e-mail [email protected] . Real market value vs. assessed value The Assessor's Office uses a complicated formula to determine how much you pay in property taxes every year. Unlike California, Oregon doesn't use the selling price of a house to establish the market value. Instead, the Assessor's Office averages the cost of properties in the area to determine its own "real market value," said county Assessor Dan Ross. For instance, a house that sold for $300,000 could have a real market value of, say, $275,000 to $325,000, Ross said. The assessed value, which is used to calculate property taxes, could be far less. Ross said properties are assessed at about 57 percent of real market value this year. However, because actual property values have increased dramatically in recent years, Ross anticipates that the assessed value of residences will drop to 50 percent. After Measure 50 passed in 1997, the assessed value of a house could only increase 3 percent annually unless it underwent remodeling worth more than $10,000. So a house with a "real market value" of $275,000 would have an assessed value of $137,500 this coming tax year. With taxes averaging about $14 per $1,000 of assessed valuation, the total tax bill would be $1,925. 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