If you own real estate in Hall County, you’ll probably find out soon what the county government thinks it is worth.
More than 74,100 property tax assessment notices were mailed to county property owners Friday, and they may show — for the first time in several years — a taxable value on real estate that looks more like its selling price.
The change is due in part to a major effort at reevaluating the county’s property and a the effect of a new state law that requires local tax officials to tax property owners on the sale price of their home for at least the first year after they buy.
Hall County’s Chief Tax Appraiser Steve Watson says in the last two years about 80 percent of the properties in the county have been reassessed by appraisers. The effect is likely a tax digest that’s lost about $1 billion since 2009.
It is possible some property owners will see a higher assessed value of their properties.
This is the first year after a state-imposed moratorium on raising property values that gives county tax assessors the ability to adjust values with inflation.
But few properties in Hall County fall into that category this year.
Of the approximately 75,000 parcels of real estate in Hall, only 3,872 showed higher values, Watson said.
Owners of lakefront properties also may not see a lot of change to their home values.
Watson told the county board of assessors Wednesday that those properties still need “serious review” by appraisers.
“We’re still trying to catch up to the market,” Watson said, noting to the board that he’ll propose to them in the coming months how to deal with reassessments of those property values.
Watson’s own evaluation shows that the assessment of property values, and the resulting losses to the tax digest, indicate the county’s assessed values are almost there.
Real estate executive Frank Norton Jr., president of The Norton Agency, said it usually takes government property assessments about two years to catch up with market trends.
“Historically, when you have a market correction, the tax base slides three to four years after that correction occurs,” Norton said. “So we perhaps have another year to go.”
Norton’s theory shows in the county’s tracking of both the housing bubble and its bursting in the last decade.
While a recession was obvious to everyone else as early as late 2007, county property valuations still seemed to be catching up to the growth in the middle of last decade until 2010.
And since then, county tax appraisers have been backpedaling even faster to catch up with the effects of the recession on property values.
The recession officially began in December 2007. But in 2009, county property assessors claimed the last of the recorded growth in property values for the decade’s housing boom, reporting a 1.35 percent growth in the tax digest.
In 2009, county tax assessors reported a tax digest that was about 29 percent larger than in 2006. The growth put the total measure of property in the county at nearly $6.9 billion.
But by the time Watson joined the Hall staff as chief appraiser in 2011, the county had a lot of catching up to do in the other direction.
Property owners had already noticed. The number who appealed county-assessed home values doubled in 2009 and again in 2010.
That year, the government’s values on properties finally marked the downward trend in home prices, showing a digest that was about 3.52 percent smaller than the year before.
Friday’s mailing of some 75,000 tax assessment notices is the first step toward determining what property tax revenues will be for the coming fiscal year.
County tax officials haven’t finished calculating the county’s total tax digest for this year, a number that includes both values of real estate and personal property. Yet if real estate assessments are any indication, local governments could be facing another loss in revenue for fiscal year 2013 that begins in July.
Last year, the digest shrunk by about $579.5 million, about 8.44 percent of what it was the year before. That caused a major reorganization of the county government.
This year, in property values alone, Hall faces about a $306.6 million loss, according to numbers compiled by the chief appraiser.
Local governments are bracing for another year of lower revenues. But Hall County Administrator Randy Knighton isn’t sounding the alarm.
Tuesday, Hall County plans to unveil its proposal for spending the coming fiscal year, which begins July 1.
Gainesville officials plan to unveil their budget plans later in May.
Knighton said the open house is an attempt at making the county’s budgeting process more transparent this year.
The budget made public Tuesday will be preliminary. As they receive new revenue projections from the tax assessors’ office, county staff will have to adjust their proposals in the coming weeks. The proposal likely will change as staff members hear feedback from the public and, ultimately, the commissioners.
But it is riding in on a calmer wave than the one initially unveiled last year. So far, Knighton said, the county isn’t proposing to eliminate any departments, as it proposed for Parks and Leisure Services in 2011.
Last year, county officials, with late-breaking news that losses to the tax digest were worse than originally predicted, scrambled until the 11th hour to come up with a spending plan.
The plan ended with a major reorganization of the county’s parks department and promised another year of cuts to pay and benefits.
Since then, officials have been trying since fall to keep up with what they’ve projected to be even more revenue losses, making adjustments in spending from month-to-month, Knighton said.
“We all learned from previous years, including last year,” Knighton said. “I can say that we’ve tried to approach this budget process in a way that we would to be proactive up front and try to engage the departments and try to take an internal look at where we were, and make the necessary reductions before a preliminary budget is released.
“We’ve got a very strong foundation right now with respect to the budget development. But we’ve still got a little ways to go.”
Knighton indicated Friday that the county is “not at a time where we’re having any major initiatives or programs that departments are trying to justify.” He also said he’s asked some of his department heads to bring budget proposals for fiscal 2013 that are even smaller than this year’s approved spending.
It’s also unclear if county employees will have to suffer another year of furloughs and no contribution to their retirement plans.
“That’s one matter that we’re continuing obviously to take a look at, and we ... wanted to put ourselves in a position first where we could come up with a balanced budget framework, which we have, and that puts us in a position to have that discussion about furloughs and retirement,” Knighton said.
One thing that could pose a problem to local governments’ budgets this year will be the number of foreclosure sales in 2011, which outpaced regular “arms’-length” sales.
With a state law that mandates local property assessments match the sale price for at least the first year, bank sales — which often are tens of thousands of dollars below fair market value — will limit the county’s ability to tax it.
Of the 1,885 real estate sales the county has on record for 2011, about 53 percent were bank-sold foreclosures.
“We’re all part of a cleanup,” said Norton. “I have referred to this market as the modern-day CSI, and the real estate companies and, in many cases, the banks are doing crime-scene cleanup.”
After the large number of foreclosure sales the last two years, Norton said he expects foreclosure sales to taper off this year and next, allowing prices to finally stabilize.
“The bank inventory is dropping very, very fast. The overall inventory of homes is dropping very, very fast,” said Norton. “And we are rapidly turning from a buyer’s market to a seller’s market in many price points. In other words, there are more buyers than sellers coming out into the marketplace pretty much under $200,000.”