Ken Yazel World file
The number of local homeowners who see their property tax assessments go up 5 percent automatically every year is decreasing, County Assessor Ken Yazel says.
The state Constitution only allows assessments to go up 5 percent a year. To many people that became a routine: Their assessments went up 5 percent EVERY year.
It seems like tax hikes to those property owners – and they do end up paying more property taxes because of it – but it actually is a reduction of tax discount. They’re getting closer to full taxable value for their homes.
Here’s why: Their homes were worth significantly more on the market than they were carried on the tax roles. The Constitution only allowed that value to go up 5 percent. A 5 percent increase still wouldn’t get the homes to the market value, but that was the cap.
Because home values stopped going up in the recession (and in some cases went down) the number of homes at the 5 percent cap has declined steadily.
In 2001, Tulsa County had 97,015 accounts out of 232,367 (nearly 42 perecent) that were rising at the 5 percent maximum every year. The others could have been rising at anywhere from $1 to very nearly 5 percent. The vast majority of those, 91,546, were homes. That was more than 47 percent of the homes in Tulsa County.
In 2011, the number of Tulsa County properties rising at the 5 percent rate was down to 38,545 – 16 percent. Still nearly 88 percent of the properties rising at the 5 percent maximum were homes, but less than 16 percent of homes were at the cap.
A proposed state Constitutional amendment to go before voters in 2012 would reduce the maximum assessment increase from 5 percent to 3 percent for homestead property and agricultural property.
Yazel argued in
a story I wrote last week that such a move would shift the burden of property tax from high value homes (where values typically rise faster than 5 percent and there is a greater remaining discount under the 5 percent system) to lower value homes. If the assessments don’t go up, the millage rates will increase to cover the costs of bonds and court judgments, he pointed out, resulting in a greater burden on properties that don’t benefit from the cap.
One other interesting point about the proposed 3 percent cap is that it doesn’t apply to commercial property, although the 5 percent cap does.
Consider this hypothetical: A large commercial property, such as a mall, loses a lot of businesses during the recession. The owners rightly appeal their assessment because their property is worth less than it was, and get a major assessment reduction.
When the recession ends and business returns to the mall, but the assessment can only rise by 5 percent a year,and it will take years for the value to get back to market level. But it will happen much faster than it would have happened at 3 percent.
