Property owners bend representatives' ears on property taxes, appraisals
POLSON — People concerned and angry about their property appraisals and the resulting rise in their property taxes filled the large meeting room at the Lake County Courthouse. Approximately 108 property owners, realtors and legislators and other interested parties showed up at 6:30 p.m. on Jan. 20 for a gathering billed as a Lake County Town Hall meeting, and it was standing room only.
Representative Mark Blasdell, R-HD 10, Representative John Fleming, D-HD 12, Senator Verdell Jackson, R SD-5, Kyle Karstens, Representative Scott Reichner R-HD 9, Representative Janna Taylor, R-HD 11, and Lake County Commissioner Paddy Trusler were present to speak.
Taylor welcomed everyone to the meeting and spoke about the 2008 appraisal.
“Our constitution says property has to be appraised fairly,” Taylor said, adding that the date picked was July 1, 2008.
Approximately 300,000 residential properties in the state of Montana had to be appraised as well as commercial properties, timber and agricultural properties.
Taylor brought a list of possible solutions that she passed out to the crowd. The list included information on a constitutional amendment, legislative possibilities, such as licensed Dept. of Revenue appraisers, foreclosures and abandonments included in comparables, sunsets on all mill levies, and groups considering law suits.
Taylor also mentioned HB 658, the mitigation bill voted in to fix the system. The homestead deduction will be raised to 47 percent by 2014 according to Taylor.
(To arrive at taxable value, a homeowner starts with the appraisal value from the Department of Revenue. The homestead deduction of 34 or 35 percent of the appraisal value is subtracted from the appraisal value. Then that number is multiplied by 3.1 percent and that is the taxable value according to Taylor.) Senator Jackson had handouts comparing tax and tax liability decreases and increases in Lake County under HB 658.
“How can we fix it (appraisals)?” Jackson asked.
“Fill out an AB26,” Jackson said, answering his own question.
An AB26 is the form that requests a formal review after the appraisal. The rub is the form must be filled out within 30 days of receiving the appraisal.
Jackson advised the crowd to “insist the Department of Revenue come to your property. Then you’re going to negotiate with them.”
Jackson said the burden of proof is on the property owner so they should be prepared, with comparable properties and issues which could depreciate the value of their property, such as a rockslide, a road across the property or not owning shoreline.
People who are prepared are being successful having their taxes lowered according to Jackson.
Next Kyle Karstens, who works at Lake County Abstract and Title, spoke to the group. Karstens worked for Lake County from 1973 to 1984 as the Lake County Appraisal Supervisor.
Karstens said, “When I was there, my staff went out to every property in Lake County.”
Karstens asked how many members of the audience had filed an AB26. Nearly everyone in the room held up their hand.
Karstens said the appraisals weren’t fair to property owners, county government or elected officials.
Karstens gave an example of a client of his with a family owned piece of property. The client had filed an AB26. The old value of the property was $458,000, and the new value was $4,644,000. The client had been “waiting, waiting, waiting and had to pay the first half taxes.”
Karstens asked why the Department of Revenue hadn’t just sent out a letter asking each landowner what his or her property was worth.
“It might be far fetched,” Karstens said, “but it’s an idea.”
Karstens added that he thought lots of insurance agents or real estate people could probably tell you what your property was worth.
“A six-year reappraisal is a multi-million dollar boondoggle,” Karstens added.
Questions and answers flew fast and furiously around the room.
An audience member, Ginny Reed, asked if the Department of Revenue appraisers are licensed or certified.
Karstens answered that no, they are not licensed appraisers.
Taylor interjected that under legislation, “one thing we can ask is that all appraisers be licensed or certified.”
Property owner Dennis Ingraham said he and his wife live on the place his parents had in 1939. Their taxes have gone up $22,000, and the Ingraham’s can’t afford that.
Ingraham suggested if property hadn’t been improved, taxes should not be raised more than the cost of living.
Audience member Mark Blaisdel said, “… If you don’t do something concrete to help these people, there’s going to be a helluva mess.”
Dick Wells spoke up also. Wells, from Thompson Falls, said he has been working on tax reform since the early 80’s. Constitutional Initiative 27, which would have abolished property taxes, failed by a narrow margin, Wells said, and nothing has been offered to take its place. Wells said the first step to property tax reform was to amend the constitution, and he had a petition in hand.
Wells received a round of applause.
Another question came from Dennis McDowell who spoke about Republicans battling Democrats, the east side of the state fighting with the west side and “nothing gets out of committee” in the Montana State Legislature.
“My question to you is, as representatives and senators, can you really get anything done?” McDowell asked.
Representative Fleming, from St. Ignatius, spoke to the question. Fleming said no one was hit hard at their end of Lake County although the ranchers are “not exactly happy” and don’t trust the process.
Scott Hollinger from Bigfork said, “..The rub I have is that it was called an appraisal … it’s not an appraisal, it was a sham.”
Lake County Commissioner Trusler said the reappraisal was a sham for Lake County as well although he added that 90 percent of the people in Lake County are happy with the appraisal.
“Will there be county budgetary shortfalls?” Trusler said. “The answer is yes.”
Budgetary shortfalls were not what concerned another audience member who asked if the Department of Revenue would tell him what property they had used as a comparable for his property.
Representative Reichner told the gentleman to “go in and ask them (Dept. of Revenue) what the comps are and then go get your favorite realtor to find out what your property is worth.”
Reichner said the appeal process was in place and working.
“If you missed it,” Reichner urged the crowd, “do it in June.”
“Judge us on what we do,” Reichner added. “We’re hearing your comments and concerns … we’ll be ready for the next legislature.”
The legislators delivered a “reality check” to the crowd. When Proposition 13 passed in California, virtually everybody in the state had an issue with property taxes. In Montana not everybody across the board was adversely affected.
Representatives from the east side of Montana are going to say “I’m not gonna vote for this; it’s bailing out Flathead and Lake County again,” Jackson said.
“I’ve got a plan,” Jackson said.
Jackson’s plan includes sponsoring a bill to transfer the statewide school mills, about $210 million, from the property tax fund to the general fund. Jackson said that’s a “much better fit.
Jackson’s would also like to change the constitution to give the legislature more flexibility to come up with a better system for property appraisal and taxation so people aren’t taxed out of their homes. Jackson said he would like to use the tactics the homeschoolers use and flood the capitol with supporters when the bills come up. When citizens testify for or against a bill, Jackson said the legislators pay more attention.
To wind up the meeting, Trusler told the audience “as soon as you get that assessment notice, talk to someone on what to do and file and AB26.”
“Local government is the best government,” Trusler said.
“I’ve never turned anybody away and Ms. Kugler (Patti Duford Kugler, the Lake County Treasurer) has never turned anybody away,” Trusler continued, adding that they are the best link the legislators.
(Editor’s note: To contact any of these legislators, go to leg.mt.gov and click on "find a legislator" in the upper left hand corner. This site provides phone numbers and e-mail addresses.)