| Some Constitutional reformers claim that the Alabama Constitution
prohibits citizens from increasing local taxes. How can they make this outlandish claim? Following is Mobile County
Revenue Department's reappraisal that will increase local property tax without constitutional amendments or votes.
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Constitution Reform. Reappraisal under way amid school tax debate By JEB SCHRENK Staff Reporter The Mobile County Revenue Department is reappraising local property values - a routine exercise that usually leads to higher tax bills for landowners. Reappraisals, scheduled for every four years, are done to keep property values in line with sale prices in the area. The reappraisal should be completed this time next year, and notices must be paid between Oct. 1 and Dec. 31, 2002. "Property taxes increase because the market value has increased," said John Terhune, chief appraiser for the department. "We're reappraising every four years to reflect the changes in the market." The work is occurring against an unusual backdrop: during a campaign to raise property tax rates for the county's public schools. If passed, the May 15 referendum would generate between $25 million and $30.4 million a year for education. Voters will have a choice of tax options, but each involves some type of property tax. The last attempt to raise property taxes for Mobile County public schools took place after the 1998 appraisal, when many residents were informed that their tax bills had risen as a result of the county's new appraisal of property values. That referendum failed, with some analysts suggesting that the reappraisal impact on homeowner tax bills played a role. No matter the new referendum's outcome, said Terhune, the reappraisal goes forward. "Property is going to be reappraised," he said. "If the referendum passes, it's going to be reappraised. If it fails, it's going to be reappraised." Also pass or fail, a reappraisal that increases tax bills, and therefore total tax revenues, should mean some extra money for schools, though school officials say it would be far short of the amount they need to get by. Arriving at land values Appraisers Ernest Cox and Joyce Lemery cruised down Eliza Jordan Road on a recent day looking for a dirt road that, according to their map, would lead them to 170 acres. The two spend their work week evaluating property - checking to see if a porch has been added on here, a shed torn down there, a home's condition improved or worsened. On this recent day, Cox and Lemery were west of the Mobile Regional Airport in rural Mobile County. Believing they had found the dirt road, Cox turned the car down the bumpy drive, brush scrapping against the sides. "This has got to be it," Cox said. "You know what," Lemery responded. "This is definitely vacant." The appraisers checked off on their papers that, in fact, no one had developed the property. There were no buildings to be taxed. Although folks like Cox and Lemery check for any changes to property, most of the increase in valuation can be attributed to fluctuations in the construction costs, changes in land value and an "economic adjustment," Terhune said. Existing structures become more valuable as costs of new construction rise. Land values may vary based on sales prices received in the area. Appraisers also take into account factors such as neighborhood appeal. For example, if a person lives in the Oakleigh garden district of Mobile, his property might be worth more than if located elsewhere. Such considerations in the appraisal are considered "economic adjustments." Historic districts, waterfront areas and the Spring Hill and Midtown neighborhoods of Mobile have all seen strong sales in recent years, Terhune said. Impact on tax bills To show how values can increase over the years, the revenue department released a sample of properties and their appraised values in 1994 and 1998. The revenue department appraised a home in the 1700 block of Hunter Avenue in Midtown at $99,955 in 1994. The value of the home and its land rose to $125,400 in 1998. That means the property owner's 1998 tax bill, considering they had no exemptions, reflected an increase of $131. People are taxed on the assessed value of their land, not the appraised value. Residential property is assessed at 10 percent of the appraised value, businesses at 20 percent, and public utilities at 30 percent. Someone with a $125,400 home pays taxes on the assessed value of $12,540. Property in the city limits is taxed at 51.5 mills, and a mill represents $1 in tax for every $1,000 assessed. A person with a $125,400 home will pay $579 in property taxes after the $67 homestead exemption. The bill would be $448 for a home valued at the $99,955 figure. In the 1800 block of Seale Street in the Toulminville community, property values weren't as strong. A property appraised at $27,161 in 1994 was valued at $31,000 in 1998, including the addition of a garage valued at $800. Such an increase would raise a property tax bill by $20. To keep appraised values in line with what property is selling for, the revenue department each year performs an analysis of the two, Terhune said. The revenue department takes a sample of sales in Mobile County and a "sales ratio" study is done by dividing the appraised value of each by the sales price, Terhune said. If the median percentage is under 85 or above 105, the state orders the county into another reappraisal. Mobile County had a 78 percent median ratio for 2000. The scheduled four-year reappraisal, however, is already under way. Routine property assessments are relatively new to Alabama. The Legislature in 1972 passed an act establishing reappraisal methods, and the first one was completed statewide in 1978, Roberts said. Uniform and scheduled reappraisals were the result of litigation claiming inequities in Alabama's assessment methods. Prior to the 1970s, reappraisals - if they even occurred at all - varied from county to county, said Mobile County Revenue Commissioner Freda Roberts. © Mobile Register |
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