The state’s recent property valuation equalization order will raise Washington County agricultural assessments by eight percent and residential and commercial by 13 percent, said Washington County …
The state’s recent property valuation equalization order will raise Washington County agricultural assessments by eight percent and residential and commercial by 13 percent, said Washington County Assessor Lil Perry.
The assessment equalization will not take effect until October, said Perry, “unless something should change it.”
The equalization, explained Perry, is done to make certain each property class is assessed at actual value as required by law. It is not to be confused with property assessment where valuations of individual properties are established every two years by Iowa’s 107 city and county assessors.
On the other hand, assessment equalization involves only aggregate valuation of entire classes of property.
Perry said the order “is less than I expected.”
On the average, overall value of Iowa farmland will increase by 8.3 percent, and Washington County is in that average.
The highest increase is in Davis County which will see a jump of 28 percent. For Pottawattamie and Cass counties, there will be a three percent decrease in farmland value.
Current equalizations will be reflected in tax bills due in the fall of 2000 and spring of 2001.
The next assessment evaluation is set for 2001, Perry noted. She also said that county assessors have the opportunity to appeal the state adjustment, but did not see any need to do that this year.
According to the Iowa Department of Revenue and Finance, assessment equalization is necessary because:
•Iowa’s more than 2,000 taxing districts do not correspond with the 107 assessing districts. As a result, property in one taxing district (such as a school district) may be valued by two or more local assessors.
•state aid to local schools is based in part upon property tax (assessment) base of each school district. Therefore, inequities in levels of assessment among school districts can have adverse effects upon the equitable distribution of state aid.
•equalization is necessary to ensure each class of property is assessed at the statutory level of actual value. Equalization helps maintain an equitable assessment base among these classes.
Assessment for each property class is based upon an assessment/sales ratio study; appraisals and investigations made by the property tax section’s appraisal staff and a study of each county’s actual productivity (for agricultural land).
The first involves the report of all transfers of real estate with assessors sending all sales date to the Department of Revenue and Finance at least quarterly. Each sale is reviewed to determine if it is an “arm’s length” transaction, indicative of market value. Real estate appraisals are made to supplement the date from the sales ratio study and involve actual inspection of properties and an analysis of the real estate market and construction costs.
For agricultural real estate, assessment level is determined from a comprehensive study of the land’s productivity, taking into account actual crop production, as well as prices and expenses.
If reported valuations (for each class) are more than five percent above or below those determined by the director of the department, the director is required by law to order a percentage adjustment in the valuations for the property class.
Although equalization and reassessment by local assessors do not, of themselves, increase property taxes, they can result in a shifting of the property tax burden among classes of property.
Perry noted that another factor is the state rollback which will lower the assessment valuations for residential and commercial by one percent.