IPTI Xtracts USA October 2013

48 Pages·2013·0.45 MB·English

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USA ● What’s Inside – October 2013

• NORTH CAROLINA - Group to take a new look at taxes
• COLORADO - County assessors adjusting property values to account for flood-destroyed
structures
• MASSACHUSETTS - Is the city contributing enough to our schools?
• TEXAS - For Low Taxes, It All Depends on the Business
• WASHINGTON - State looks at new tax payment ideas for WDFW land
• PENNSYLVANIA - Senate's turn on property tax, the House's lament
• MINNESOTA - Oak Park Heights plans special assessments for roads
• PENNSYLVANIA - Consultants give qualified endorsement to proposal for land-value tax in
Reading
• CALIFORNIA property tax rolls jump for 3rd straight year, to $4.64 trillion
• CALIFORNIA - Tax burdens and fairness
• ILLINOIS - Levy season: How government plans for your property taxes
• MICHIGAN - Swartz Creek City Council eyes special assessment instead of tax vote to boost
police department
• MINNESOTA - No more property tax sticker shock
• NEBRASKA - Think tank calls for property tax relief via new taxes on services
• New fiscal survey finds nation’s cities struggling, but surviving
• NEW JERSEY - Mantoloking to reassess property taxes after Sandy damage in NJ's hardest-hit
shore town
• NEW YORK - Falling Values Send Tax Rates Soaring
• OKLAHOMA voters to decide on two property tax measures
• OREGON - Voter-approved tax hikes contribute to 9% increase in Multnomah County property
tax collections
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• PENNSYLVANIA - It would be a bad idea to replace property taxes to pay for public school
• PENNSYLVANIA - Farmers seek relief from ‘unfair’ property taxes
• SOUTH DAKOTA - Historic site tax break deadline is Nov. 1
• UTAH - Dozens of Utah governments hike taxes after holding back for years
• VERMONT - Bring clarity to property tax exemptions
• WISCONSIN - Amazon sales tax could raise $30 million a year for Wisconsin
• CALIFORNIA - Marin assessor wins appeal in Mill Valley property tax dispute
• NEW YORK - Falling Values Send Tax Rates Soaring
• NEW YORK - Related Hudson Yards Approved for $328 Million Tax Break
• HAWAII - Property tax task force set to begin
• NEW JERSEY - Hilton Hotel Assessment Reduced Following Trial
• NEW JERSEY - Borgata wins tax appeal worth nearly $50 million in Atlantic City refunds
• MICHIGAN - Ford Wins Tax Break On Flat Rock Plant
• MISSISSIPPI - Property tax refunds may cost millions
• NEW JERSEY - The 10 NJ Towns With The Highest Property Taxes
• JERSEY CITY council to weigh 35-year tax abatement for $600M Journal Square towers
• NEW YORK - Quarter of property value in New York considered tax exempt, according to
comptroller’s report
• NEW YORK - Municipalities to garner less property taxes from farmers in 2014
• VERMONT Supreme Court rules church camp must pay taxes
• WASHINGTON - Latest property tax figures show 2.3 percent increase in 2013
• CALIFORNIA - It’s scary tax season again
• OHIO - Board sides with Lake County Auditor on Eastlake power plant's tax value

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NORTH CAROLINA - GROUP TO TAKE A NEW LOOK AT TAXES

Commissioners are taking a new look at property taxes, especially how property values are determined and how taxpayers
dispute bills.
Although they have questions about how the tax office handles delinquent taxpayers, don’t expect a garnishment or tax
lien campaign, said Republican Commissioner Bill Bencini of High Point.
• Collections: “There is interest in having a standard policy on collections,” Bencini said. “We know there are some large
unpaid bills out there, and some people skate for a long time while others get their wages garnished. That is perceived as
unfair. And it seems it should take just as long to get the big money.”
A new four-member committee will meet for the second time in October. The group also could review what’s called asset
discovery, Bencini said. That’s paying a commission to investigators to find unlisted properties.
“You can’t do this like that anymore,” Bencini said. “We have to decide if we want to have this done on a contract or
handle it in house as we used to.”
• Appeals: Democratic Commissioner Bruce Davis of High Point also serves on the committee.
“I’m concerned about the Board of Equalization and Review and taxpayers not having representation for their appeal
cases,” Davis said. “Poor people do not have access to lawyers that other people may have, and they are not that familiar
with real estate.”
If not satisfied, taxpayers can take their assessment appeal cases to the state.
“We want to make this process more friendly,” Bencini said.
• Revaluation: Shortening the revaluation cycle could save some of the sticker shock for taxpayers after appraisals.
Tax Director Ben Chavis has suggested a five-year revaluation cycle to counter volatility in the real estate markets. Because
Guilford uses an eight-year cycle, taxpayers paid bills through 2012 based on 2004 values, which could have been much
higher than actual later market values seen in the housing recession.
“You can get big changes because so much time passes,” Bencini said.
Davis’ 2012 day care business property revaluation was a surprise, he said, because it was so close to one from a appraiser
he hired. “The difference could have been the business use of the property on my assessment,” he said. “Sometimes it is
hard to get an apples-to-apples comparison.”
• Office Work: Tax office efficiency is another topic.
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“I’ve heard that if the computer system does not give you what you need, they have to work around that,” Davis said. “I’m
concerned that the software may not be working as it should.”
Tax topics
• Sticker shock: There were few large property tax hikes in 2012, according to Tax Director Ben Chavis, because the county
saw no general shift in values up or down.
• Appeals: There were 7,500 informal assessment appeals in 2012 representing 3.6 percent of property owners. An appeal
rate below 10 percent is considered good.
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COLORADO - COUNTY ASSESSORS ADJUSTING PROPERTY VALUES TO ACCOUNT FOR FLOOD-DESTROYED
STRUCTURES
Colorado property owners whose houses or business buildings were destroyed in last month's floods could be in for at
least a partial break on the taxes coming due on those properties next year.

Appraisers from the Boulder County Assessor's Office -- as well as personnel from assessors' offices of other flood-stricken
counties -- have been examining the properties when local officials can get access to those properties.

Wherever it is confirmed that a structure has been destroyed by flooding, the assessed value of the property can be pro-
rated to reflect the property's reduced worth for the rest of this year -- a reduction that would lead to a smaller bill on the
2013 tax year, and the property taxes those owners must pay in 2014.

State law provides for pro-rating the value of structures destroyed or demolished during a tax year. The owner would be
taxed for the full value of the property -- including both the buildings on the property and the land underneath -- up
through the date the structure was destroyed. After that, the assessed value would include only the land and any non-
destroyed buildings on that parcel.

In Boulder County's case, "we will assume the destruction happened on Sept. 12," Assessor Jerry Roberts said Wednesday.

Thus, if a house or business building on the flooded property was destroyed by the flood, the pro-rated lower taxable value
would apply from Sept. 12 through Dec. 31, 2013, for property taxes that have to be paid in 2014.

Roberts emphasized that the pro-rating of property assessments for the 2013 tax year, as applied to taxes payable in 2014
won't apply to houses, business buildings and other structures that weren't destroyed.

He said houses and other buildings are considered destroyed "if they are completely gone or uninhabitable and must be
removed and replaced," Roberts said.

Roberts said that could include those with severely damaged foundations or that will be unsafe to inhabit for a significant
period of time until they can be rebuilt, such as those whose structural damages include missing roofs and walls.

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Roberts said that as of Wednesday, his staff's numbers of the houses, business buildings, farm buildings and other taxable
structures thus far deemed to have been destroyed was not available. Appraisers have yet to visit some areas for on-site
inspections -- partly because of accessibility issues and partly because the staff is in the midst of equalization hearings
challenges that some property owners have made of the assessor's pre-flood value determinations earlier this year.

Boulder County is also using other resources, such as aerial photography, to try to identify property destruction and
damages, Roberts said.

"It's sort of a monumental task right now," he said.

Roberts said he hopes his office can complete its flood-impacts work by early November, in order to deliver certified tax
rolls to the Boulder County Treasurer's Office in early December.

The post-Sept. 12 values of merely "damaged" or "partially destroyed" properties won't be pro-rated for the 2013 taxes
payable in 2014: "We cannot take into account access problems to the property or things like flooded basements, drywall
damage, water heater and mechanical replacement," he said.

However, assessors will be taking another look at flood-damaged structures next year, and adjustments on those
properties' values could be made that would affect the tax bills those owners would have to pay in 2015.

"On Jan. 1, 2014, our appraisers will return to look at the properties that were destroyed and damaged to determine the
degree that they would still need some adjustment based on their condition at the first of the year," Roberts said.

"It is at that time we will determine whether more adjustments need to be made to the entire property, including land and
building values, if they were affected."

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MASSACHUSETTS - IS THE CITY CONTRIBUTING ENOUGH TO OUR SCHOOLS?
When The Standard-Times presented New Bedford City Council and School Committee candidate biographies and positions
last Sunday, one of the questions posed to each group was, "Would you support the city contributing more money than the
minimum state requirement to the school department even if it means a tax increase?" To truly grasp the importance —
not to mention the meaning — of that question, it is helpful to consider information recently compiled by the UMass
Dartmouth Urban Initiative on New Bedford's property tax, local contribution to the school budget and overall net school
spending.

First, what does this question mean? It refers to the fact that Massachusetts establishes a foundation budget, or a baseline
dollar amount districts are required to spend according to factors like enrollment, student characteristics and geographical
wage differences. Over the past five years, New Bedford has spent close to or less than the foundation budget, whereas
school districts statewide spend an average of 15 percent more than their required budgets. At the same time, New
Bedford is not meeting its target amount for the local contribution, which is the portion of the school district's budget
comprising local revenue. Currently, the city only contributes 15 percent of its total foundation budget, whereas the target
amount is 25 percent. Meanwhile, the average Massachusetts municipality contributes 57.2 percent of local dollars toward
its school district's budget. These factors reflect an inability — or an unwillingness — to raise additional funds to invest into
the schools above what is required.
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Because Massachusetts schools rely heavily on local property taxes as their main source of funding public education (more
so than most of other states), it is particularly difficult to provide sufficient funding for public education in a city like New
Bedford. It has a comparatively low residential property tax rate of 14.33 percent (ranking the city 201 out of the state's 351
municipalities) and an especially low median home value on which this rate is applied ($197,000, compared to $323,800
statewide). As a result, it is harder for districts like New Bedford to generate local revenue for schools than it is for districts
with large property tax bases.

To add to the problem, districts with students that have more needs are often the ones with the smaller property tax
bases, as is the case in New Bedford. The school district has 20.5 percent of its students receiving special education
services, compared to the state average of 16.1 percent, while the proportion of students classified as low-income is almost
double the state average (64.4 percent versus 35.2 percent). Although federal and state governments attempt to offset the
costly effects of low wealth and concentrations of students with high needs, significant disparities remain within the state.

The consequences of funding gaps are such that underfunded public school districts struggle to provide the proper
materials, services, technology, staffing, environment and overall adequate education students need to succeed. School
quality affects student achievement, which is in turn reflected by graduation rates: the dropout rate of high school
students living in low-income school districts is six times higher than the rate of their peers from high-income areas.

The views — and ultimately, the decisions — of City Council and School Committee members and candidates on the local
contribution to the school budget stand to significantly impact the quality of public education in New Bedford. To help
stakeholders and decision-makers understand and analyze complex policy issues like this one, the Urban Initiative has
developed the SouthCoast Urban Indicators Project to make information like this more widely available.
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TEXAS - FOR LOW TAXES, IT ALL DEPENDS ON THE BUSINESS
When he is roaming other states trying to get their businesses to move to Texas, Gov. Rick Perry likes to tell their
executives that the tax burden in Texas is lower than other states.

Here, for instance, is the top of the governor’s script for a radio ad Texas ran in Maryland: “When you grow tired of
Maryland taxes squeezing every dime out of your business, think Texas, where we’ve created more jobs than all the other
states combined. Where you’ll find limited government, low taxes and a fair legal system.”

That tax claim is only partly true. Texas ranks 48th among the states for the tax burden on individuals, according to a Texas
business group that specializes in taxes and other fiscal and economic issues. But the state is 18th in business taxes, about 8
percent above the national average. (Maryland’s state and local business taxes, relative to economic output, are lower than
the national average.)

“We’ve improved,” said Dale Craymer, the president of the Texas Taxpayers and Research Association. “If you ran those
numbers 10 years ago, we were easily in the top 10. What happened is that other states raised taxes and got ahead of us.”

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In fact, Texas taxes look great to some companies and terrible to others. Capital-intensive operations with lots of buildings,
machinery and hard assets? Not so wonderful. Corporate headquarters? Paradise.

“One thing that the lack of a personal income tax does is it’s great for entrepreneurial business,” Mr. Craymer said. “It’s
great for us as an incubator, and for corporate headquarters locations.”

For the people in the C-suites — those with titles like chief executive officer, chief financial officer and chief operating
officer — Texas is attractive.

The well-titled are also the entitled, pulling the highest salaries; because Texas doesn’t have a personal income tax, it offers
them an opportunity to cut their own personal tax burdens.

Lower-paid employees can benefit, too. They might all be a bit shocked by property taxes here, but on average, they will
come out ahead on the personal side.

For companies making their decisions on the basis of personal finances — or, say, on the personal finances of the small
group of people making the site selection decisions — the tax thing can be persuasive.

The business outlook can be considerably different. The numbers from Mr. Craymer’s group — which researches and
lobbies on tax, economic and state fiscal issues — show a state that’s great for individuals, good for service companies and
hard on everyone else.

You won’t catch a group like this one trying to chase businesses away or taking potshots at the governor. Its members are
not malcontents or partisans. But they are empiricists, and their numbers present a more nuanced argument than the
governor and other promoters are making.

Part of that Texas sales pitch is about climate, work force, favorable regulations and the quality of life. Another is that this
is a low-tax state. On a per-capita basis, the Census Bureau ranked Texas 33rd in tax collections in 2010.

But taxes are not collected on a per-capita basis. Individuals pay sales taxes on many of their purchases, and property taxes
on their homes and other real estate — but do not pay state personal income taxes like people in 43 of the other 49 states.

In Texas, individuals pay about 35 percent of state and local taxes, according to the taxpayers association’s research. The
average for all 50 states is 52 percent. Of course, the numbers flip for businesses, which pay 65 percent of state and local
taxes here, compared with 48 percent, on average, nationally.

Individuals paid 55.1 percent of the state sales tax in 2011, according to the state comptroller’s office. Businesses, on the
other hand, paid 51.5 percent of the school property tax. Texas has the 11th-highest sales tax rates and, according to the
Lincoln Institute of Land Policy, the fourth-highest tax on industrial property.

“There are different kinds of businesses,” Mr. Craymer said. “If you’re capital-intensive, it’s a high-tax state. If you’re in a
service business, it’s relatively low tax.”

If you’re on an economic development team barnstorming the country to get businesses to come to Texas, it’s a low-tax
state. The rest is just detail.
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WASHINGTON - STATE LOOKS AT NEW TAX PAYMENT IDEAS FOR WDFW LAND
Washington has set up a work group to review the way the state compensates counties for non-taxable land, which may
help resolve a long-standing issue for Okanogan County.

The county has received less than a third of what the state owed in each of the past two years. The issue has been a point
of contention for the Okanogan County commissioners for years, because the county relies on payments in lieu of taxes
(PILT) from both the state and federal governments for the large amount of public land in the county.

While the majority of Okanogan County’s public land is managed by the U.S. Forest Service, the county also receives PILT
monies on the 80,000 acres managed by the Washington Department of Fish and Wildlife (WDFW). The rest of the state
land, more than 300,000 acres, is managed by the Department of Natural Resources for the school trust and does not
qualify for the PILT program.

The state formed the work group after Gov. Jay Inslee vetoed the part of the state budget that covers PILT. He directed
WDFW and the state’s financial agencies to review the methodology used to calculate the payments and to look at how
other states and the federal government do it. He asked them to recommend a revised method for calculating the
payments by Dec. 1.

“I believe a comprehensive review of PILT for game lands should be conducted without any predetermined outcome,”
wrote the governor in his veto statement, which gives the agencies two extra months for the review. Both the original
budget and the veto refer to finding a way “to provide supplemental payments to these counties.”

Several ways to calculate

State law currently provides four ways for counties to calculate PILT: the rate paid for private land under the open-space
tax program; 70 cents per acre; or the amount of PILT paid on the parcel in 1984, when the payments were first authorized.
Counties may also choose to retain game-violation fines collected within their borders instead of PILT.

For years, Okanogan County, like most counties, was compensated at 70 cents per acre. But three years ago Scott Furman,
the county assessor, recalculated the payment based on the open-space classification – 50 percent of market value. That
boosted the county’s bill from $93,500 to $422,000 in 2010 and to $485,000 this year.

WDFW paid the higher amount for two years but, as other counties also began to use the open-space formula, the
Legislature cut the appropriation for the 2011-13 biennium. As a result, Okanogan County billed the state for $485,000 this
year but received only $151,000.

When the subject of PILT came up at a WDFW public forum on overall agency activities last week in Brewster, Okanogan
County Commissioner Ray Campbell conveyed the county’s position when he joked, “We’re about to foreclose on some of
them.”

“It has a very negative impact on the essential services we’re required to provide,” said Okanogan County Commissioner
Sheilah Kennedy at the meeting. “How can we work with you to make the legislators understand the negative impact when
they keep acquiring land?”
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WDFW director Phil Anderson explained that money for the acquisitions comes from federal grants and a special account,
and is separate from the PILT funds.

“It’s trickle-down – the state has gone against state law and said, ‘We’re not paying our obligation to the counties,’
presumably to balance the budget,” said Yakima County Assessor Dave Cook, who represents county officials on the work
group, in an interview last week.

At the work group’s second meeting last week, Furman was asked to sit in on the conference call for Cook. Participants
discussed some legislators’ perceptions that there are “winners and losers” under the current PILT system, and said they
wanted a simple formula that could be applied statewide, said Furman, who had not heard about the work group until
then.

Okanogan is one of 14 counties that receive PILT as compensation for nontaxable land. It has the third-highest acreage in
the state eligible for PILT, after Kittitas and Yakima counties. About 20 percent of the money goes into the county’s general
fund and the rest is divided among all the taxing districts, said Furman.

In many cases the PILT payments are higher than the tax paid on these lands, which were often in one of the county’s
special classifications for agriculture, which is taxed at rates below the market value, according to Furman. For example,
ranchland is taxed at “pennies on the dollar,” and most agricultural lands are not taxed at more than 10 cents on the dollar,
he said.

WDFW does not pay PILT on any buildings or structures on their land.

More state land, lower payments

The PILT issue is of particular concern to the Okanogan County commissioners, who have complained for years that
WDFW’s land acquisitions remove properties from the tax rolls. WDFW and the commissioners spent several years in
unsuccessful negotiations over a joint approach for an analysis of the economic impact of these acquisitions.

WDFW is continuing a moratorium (begun while the economic analysis was being negotiated) on outright purchases of land
in the county, although the agency has continued to pursue conservation easements, according to the regional director.

Unable to agree on the terms of the economic analysis, the county commissioners elected earlier this year to do their own
assessment. Planning Director Perry Huston and his staff have selected examples for the analysis, which is being conducted
for the county by the National Association of Home Builders, which did a similar study for Wenatchee in 2010.
Commissioner Kennedy said last week that they expect the assessment to be completed soon and that they will share it
with WDFW.
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PENNSYLVANIA - SENATE'S TURN ON PROPERTY TAX, THE HOUSE'S LAMENT
A statewide approach to property tax reform was defeated in the state House last week, but the Senate is still working on a
plan to get rid of the unpopular levy.

The conventional wisdom around Harrisburg is that it's best to take calls to get rid of school property taxes with a grain of
salt - that it's a way to score with voters, but a huge, complex, controversial task. The discord among lawmakers is the
latest proof to such cynicism.

It's the state Senate's turn to make a move on property tax reform. But there's no indication yet on how a measure passed
by the House will fare. The first scheduled action is on a very different Senate proposal to replace property taxes with
higher sales and income taxes.

Last year, an earlier incarnation of the proposal got a thumbs-down from the state's Independent Fiscal Office. The IFO
analyzed a re-worked plan this year and found, again, it wouldn't come up with enough money for schools.

But Sen. Mike Folmer (R-Lebanon) said the bill can be revised once more - and his Senate colleagues can be persuaded that
reform is within reach.

"The moon's not going to run into Jupiter," Folmer said. "I believe we have to look at the IFO, we may have to do some
tweaks, but I believe the philosophy, the underneath philosophy of this bill works."

The House sent the Senate a bill last week that would take a different approach to address the inexorable rise of school
property taxes. Instead of eliminating school property taxes statewide, the proposal would give school districts the option
of reducing or swapping them for other levies. In the process of that vote, the House roundly defeated the approach
Folmer supports.

"This has to be done right, and I don't want to just do a bill for the sake of doing a bill," Folmer said. "We have gone
through two IFO reports. We made the changes that we had to from the last one. Going forward, looks like we need to
tweak it again."

Senate GOP leadership hasn't expressed interest in any specific proposal. But Folmer said he doesn't think the House plan
stands a chance.

"I don't think there's any support for it - not that I've heard of, especially from our leadership," Folmer said. "What's really
nice, our leadership is going to give us staff people to help us tweak whatever we need to tweak."
____________________________________________________________________________________

MINNESOTA - OAK PARK HEIGHTS PLANS SPECIAL ASSESSMENTS FOR ROADS
Oak Park Heights plans to charge property owners almost $2 million in special assessments for a street reconstruction
project in the next two years.

Property owners who have already paid into the city’s street reconstruction fund will see significantly lower assessments
than those who haven’t.

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