Letter: Why I support annual revaluation

Posted 2/26/20

To the editor:

Over the past eight months, our town has sought to resolve an assessment policy change that was implemented for properties purchased during 2018. The specific concerns around the …

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Letter: Why I support annual revaluation

Posted

To the editor:

Over the past eight months, our town has sought to resolve an assessment policy change that was implemented for properties purchased during 2018. The specific concerns around the implementation and subsequent reversal of that policy aside, it revealed we have a significant assessment problem in town. It is unclear how we can best fix the problem, but something that is clear is that the State regulations around property assessments make it challenging. Our resolution at our February town council meeting seeks to reduce the regulatory challenges so we can better ensure each property owner in town is contributing the appropriate share of Barrington’s expenses.

I believe annual, town-wide revaluation will help achieve that.

I have heard criticism that annual revaluations are a “money grab.” This is not true, nor is it possible. Before illustrating how this helps, I’d first like to state explicitly, whether we assess property every year, every three years, or every 10 years, the amount of money the town will collect in tax revenue is set at the Financial Town Meeting. Assessment changes do not increase or decrease that amount. Assessments only determine what portion of the total taxes are paid by each property owner.

Here is an oversimplification to illustrate the difference between a triennial and an annual revaluation policy:

Let's assume: there are only 2 homes in town, and we are preparing for the 2020 budget year…

• The last triennial revaluation was in 2018

• HOME-A was assessed in 2018 at $100,000

• HOME-B was assessed in 2018 at $150,000

• Voters approve a municipal budget of $2,500 for the year 2020

• The tax rate would be $10.00 per thousand.

• HOME-A would pay $1,000

• HOME-B would pay $1,500

• The town will collect $2,500.

Now let’s say it was learned during 2019 that HOME-A is actually worth $50,000 more than it has been assessed. In the above method, its assessment remains the same, because it can’t be changed until the next town-wide, triennial revaluation. But, under a new annual revaluation policy:

• The last annual revaluation was in 2019

• HOME-A was assessed in 2019 at $150,000 (+$50K from 2018)

• HOME-B was assessed in 2019 at $150,000 (same value as 2018)

• Voters approve a municipal budget of $2,500 for the year 2020

• The tax rate would be $8.33 per thousand.

• HOME-A would pay $1,250

• HOME-B would pay $1,250

• Town will collect $2,500.

HOME-B is saving money, because it is no longer paying extra for the under-assessment of HOME-A. HOME-A pays its appropriate share. 

The assessment policy that adjusted 2018 assessments to match the purchase price revealed that many homes in Barrington were similar to HOME-A; under-assessed by a significant margin. In fact, if the 2018 home purchases are an accurate representation of the town’s properties as a whole, 40 percent of homes are under-assessed by more than 10 percent, with half of those being under-assessed by at least 20 percent.

Town-wide, this creates a significant amount of misapplied taxes on the properties that are accurately assessed or over-assessed. A little more than half of the properties in town fall into one of those two categories, and the total of misapplied taxes could range from $3 to $6 million.

Annual town-wide revaluation will not be an all-encompassing solution. After all, a town-wide statistical revaluation is what set these inaccurate assessments to begin with. But, the increased frequency will help resolve our assessments discrepancies by creating more opportunities to align properties to their true market value.

Jacob Brier

Barrington

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