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2008-03-26  cover story | Assessment appeals up in some area communities
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| | Andrew Sawmiller |
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March 26, 2008 - Officials in some lakes area communities report a spike in the number of local Board of Review cases filed this year by property owners challenging their latest property assessments, while others state a public education effort prompted a decline in assessment appeals. However, officials in most local communities say they've been receiving a large number of complaints and questions about rising tax obligations despite declining property assessment figures, a scenario created by provisions of Michigan's Proposal A property tax structure.
Residential property values across the county are down an average of 5.22 percent, according to Dave Heiber, manager of Oakland County's Equalization Division.
Property assessment notices were mailed to property owners in February, if not earlier, according to most local officials.
Assessment notices typically contain several pieces of information, including a property's state equalized value (SEV), assessed value, and taxable value. SEV is half of a property's market value. Assessed value represents half of a home's selling price, and should equal the property's SEV.
Under Proposal A, approved by Michigan voters in 1994, the taxable value of property can't grow in any given year more than the consumer price index (CPI), or 5 percent, whichever is less. However, taxable value is reset at the property's SEV after a property is sold or transferred.
An actual tax bill is calculated by multiplying a property's taxable value by the local millage rate. A mill is equal to $1 for every $1,000 of a property's taxable value.
Assessed values, which aren't capped, rose much faster than capped taxable values since Proposal A took effect. That created a large gap between assessed values (the higher figure) and taxable value (the lower figure) on properties that weren't transferred since Proposal A's provisions were implemented.
Many property owners are upset this year because their property's assessed value is declining but their taxable value has increased. That's a function of Proposal A, which states taxable value is adjusted each year by the CPI, capped at 5 percent. As such, a property's taxable value won't decline from one year to the next until it's assessed value falls below the taxable value.
The county's Equalization Division each January releases new property assessment figures for homestead and non-homestead properties. Assessment figures for 2007 are used to calculate 2008 tax bills.
Owners not satisfied with their 2007 property assessments can appeal to their local Board of Review in March. Those who disagree with Board of Review decisions may appeal to the Michigan Tax Tribunal, a tax court within the Michigan Department of Consumer and Industry Services.
"They have to file with the local Board of Review before we can hear the case up here," said Peter Kopke, chief clerk for the Tax Tribunal. "The review boards have the ability to change the assessments, but if someone doesn't agree they can typically bring their case to the tribunal."
Information on the Michigan Tax Tribunal can be found at www.michigan.gov/taxtrib.
Disputes involving properties with SEVs below $100,000 may be filed in the tribunal's Small Claims Department. It uses an informal hearing process to hear appeals.
The appeals process requires an appearance before the local Board of Review in March, then an appeal filed with the state usually by the end of June. The tribunal then sends a petition to the taxpayer, who completes and returns it. The case will then be scheduled for a hearing with a referee. Petitioners have the burden of proving their property assessment is incorrect.
Referees hear the case and submit a proposed decision to a supervising judge, who will then review it. Those unhappy with the decision may request a rehearing if a legal or factual mistake was made. If a rehearing is denied, the decision may be appealed to the state Court of Appeals.
"We haven't had many, if any at all, appeals filed here yet," Kopke said. But I've been told that with the volume of cases the locals are hearing, I'm expecting a possible increase in our caseload, as well."
The Board of Review in White Lake Township is no longer hearing public cases but is still meeting to go through the paperwork submitted this month, according to Assessor Jeanine Smith.
"Because they met with so many people, they didn't have time to make all the decisions," she said. "So they're coming back to make all their decisions."
In total, 374 petitions were filed with the township's Board of Review this year, according to Smith.
"It's higher than it has been previously," she said. "It's definitely higher. I wish I had an answer as to why that number was higher."
The top complaints or concerns cited by petitioners this year also was unknown to Smith, who said it was too early to answer that question directly.
"Since the board still has control of the roll, they haven't given me all of their information back yet," she said.
Smith also said it's unusual that the township is still dealing with Board of Review cases this late into March, as the local Board of Review is typically "ahead of the game."
White Lake Board of Review Chairperson Kim McFaden couldn't be reached for comment prior to press time.
Wixom's Board of Review wrapped up it's hearing schedule on Monday, March 17, according to City Assessor John Sailer, who said there are a few lingering cases to be signed off.
This year, just over 40 petitions were filed with the Wixom board. In an odd twist unlike its municipal neighbors, Sailer said the number of appeals in Wixom seems to be lower overall than it has been in years past.
"It's definitely lower because we're not getting the protective appeals filed by commercial property owners, so it's down from what we've had in years past," he said. "It's probably higher on the residential side, but I haven't really had a chance to sit down and see what those numbers are."
Citing hundreds of phone calls to field, as well, Sailer said the top complaint from petitioners is that their property's taxable value is going up while its assessed value is dropping.
"A lot of people didn't understand how that could happen, that their taxable value could go up, even on those properties with assessed values that are going down," he said. "We had to explain to a lot of them how proposal A works and most of them understood.
"So that's what the board did, was explain that they can't change taxable value," he said. "We had a few people thinking it was our choice to increase taxable value, like that was somehow a local decision. It's not, it's statewide."
Also, a few property sellers appeared before the Board of Review and stated they are tying to sell their property for less than the latest assessment figure for the property.
"Our answer to that is we have to go with the most recent sales study in the time period we look at for sales," he said. "If that time period doesn't support the value they are currently at we can't change it. Just because they're asking less doesn't mean we can just lower the value."
Those who have come before the board this year have more often than not made a clear and organized presentation, more than in prior years, according to Sailer.
It's not known how many people have gotten some relief on their assessments, and in turn, how many people will make their way to the State Tax Tribunal.
"It's too soon to tell," Sailer said.
West Bloomfield Township Assessor Lisa Hobart said the township's two separate Boards of Review are no longer hearing appeals from the public. The last day for hearings, she said, was Friday, March 14.
There were less than 900 total petitions filed this year, according to Hobart.
"Actually, that number is fairly consistent with the numbers from recent years," she said. "I though that it was possible it would be higher, but I think that our public relations information and our letter and our cable video proved to be helpful."
The top issue cited by petitioners was that their property's assessed value fell while the taxable value rose. There were also complaints that property amenity assessments also differed, according to Hobart.
"They boards explained to people that it was part of a constitutional amendment," she said. "We made sure there was a supply of extra letters we sent out with property assessment so the boards could distribute them again and point out areas that might provide a more thorough explanation."
Sellers who were concerned that their property's latest assessment figure is less than what they are trying to sell the property for were present at Board of Review hearings, but Hobart said she didn't know the number of such petitioners.
All in all, Hobart said roughly one-third of the petitioners got a lower assessment or relief from the Board of Review this year. That may be due to some very organized and well-planned presentations.
"We encourage people to come in prepared," she said.
"The people here did well, and I can't say this in every instance, that people did their best to defend their position," she said. "But the board of review is ultimately the decider."
At this point, Hobart said she doesn't know how many people will take their appeals to the state.
The city of Orchard Lake's Board of Review met for the last time on Thursday, March 13.
"We had 29 cases, which is about the same as recent years," said Sailer, who also serves as Orchard Lake's assessor. "The biggest complaint was that (the complainant's) taxable value went up, and their SEV went down. That was the major thing. We had a couple that felt their assessment should have gone down more than what it had, but it was mostly that concern about taxable value increasing and SEV decreasing."
According to Sailer, 10 out of the 29 petitioners got the relief they asked for. However, he said he still has "no idea" how many cases will be moving on to the State Tax Tribunal, since the notices carrying word of the Board of Review's decisions won't arrive in petitioners' mailboxes until April.
"After that, they have to decide if they're moving on, so there's no way for me to know yet (how many are going to a state tribunal)."
In Highland Township, the local Board of Review's last day for hearings was Tuesday, March 18. According to Township Supervisor Triscia Pilchowski, approximately 230 cases were filed this year, compared to 275 in 2007.
"The fact the number of cases went down may have something to do with the fact that people, when they came to the township, were provided with information," Pilchowski said. "The county provided these really great workbooks to work off of, so that people could really compare properties similar to their's, and they also received a state issued bulletin explaining why every decision is made."
Pilchowski said some "people just really assessed the situation" and decided an appeal "wasn't necessary."
"It could also be that people just weren't going to take the time to come in," she said.
According to Pilchowski, Highland property owners came before the Board of Review for "a lot of different reasons."
"Some people had not gone to the tax tribunal for a challenge that they had given last year, and wanted to renew the validity of that challenge," she said. "The biggest complaint that we received was 'Why did my taxes go up, but my assessment went down?' That seemed to be the most common concern."
Pilchowski said that she was "impressed" by how man people actually understood why their assessment went down and their taxes went up.
"They came in prepared to challenge the assessment, but it was a question they already knew the answer to," she said. "It was, for me, very encouraging, because even though ... I saw people coming in with very heart-felt, legitimate concerns about the property values, and at the same time, they were prepared and respectful. I actually had people come up (to the board) and say 'I apologize for coming here, because I know we have to pay for services.'"
Pilchowski said a lot of complainants came in with prepared presentations.
"I'm telling you, I was really impressed," she said. "I was like, 'Cool, people in Highland Township are smart.'"
Pilchowski said she hasn't received information on how many petitioners got relief, and said she wasn't "going to speculate on that one."
"I really respect the people who come in here," she said. "It's a really good way for me, as a public servant, to hear what the citizens have to say. It's a good reminder that I'm here at their service, and I'm fortunate that we have really good people here in the community."
Waterford Township's Board of Review met for the last time on Wednesday, March 12. According to Assessor Don Wood, Waterford received approximately 550 appeals this year, up from around 450 last year.
"A lot of the complaints came from people who had purchased (a home) over the proceeding 12 months, and they paid less money than (the assessing office's) true cash value showed," Wood said. "A lot of them, they bought foreclosures, or bank-owned homes, so they got them for less than what we would consider market value. They would come in with their deed, and say, 'I didn't pay this much for my property.' That was the biggest complaint."
According to Wood, complaints about Proposal A and the Headlee Amendment are "always kind of interwoven" with the other assessment complaints.
"When they come in and complain about their property values, (petitioners) like to throw in 'My taxes are going up and my property value is going down.'"
Wood said that he had "a few" cases involving petitioners who didn't want their assessment lowered, due to a pending home sale or refinancing.
"When you're selling a home, you don't want the assessment to show that (the home) is worth a lot less than what you're showing it for," Wood said.
There were "a lot" of prepared presentations this year, according to Wood, because "people are getting smarter by the year."
"There were quite a few (petitioners) who brought in information," he said.
Like other communities, Waterford doesn't yet have a figures on how many petitioners got relief, or how many will move on to the state tribunal.
"We send out notices, probably the first week in April, on the decision of the board, and people have to decide if they want to go on to the tribunal after that," he said. "So, we won't know for quite a while."
Andrew Sawmiller is a staff writer for the Spinal Column Newsweekly | |
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