Revaluation to determine new tax rate for next year
The whole idea of the current real property revaluation process, says Jamestown Tax Assessor Ken Gray, "is that people carry their fair share," and its purpose is to try to pick up variations in home values so that fairness can be maintained.
Final information is not yet available, but Gray believes there will be an "overall 20 percent increase in values" though "we don't know for sure," he added.
Information from the current revaluation process will be fed into the budget process and a new property tax rate will be determined for Jamestown's 2007-2008 fiscal year, which begins July 1. The current rate, often referred to as the "mill rate," is $9.49 per $1,000 of assessed value.
Homeowners will see their new assessments reflected in the tax bills coming out in August.
Waterfront homeowners will not be surprised to hear that their values will probably rise the most. "If you look at sales," Gray said, "waterfront has increased more than properties away from the water."
Gray said "the center of town has been popular." He says people like to be able to walk to places likes stores, schools, and churches. Thus, property values in the village have risen more than in other areas like the north end.
In any case, the jump in values should not be as large as it was in 2003, when overall assessments were up 75 percent, Gray said, adding that the biggest jump over the last three years was in 2004, but since then the market has slowed.
Gray says "the one point I'd like to make" about the current residential property revaluation is that people have "nothing to fear."
In his experience, the greatest concern homeowners usually have about revaluation is that "it's another way for the town to raise taxes." He went on to explain that this is not true, and for two reasons. First, as assessed values go up, tax rates generally come down. He explained that it's a matter of balancing total values determined against total revenues needed, and as one rises the other falls. Second, state law requires that total revenues generated through property taxes increase by no more than 5.25 percent in the coming fiscal year, and annual increases will decline to 4.5 percent over the next few years.
This means that no matter how much assessments might increase, taxes cannot simply follow suit, Gray said.
It is real estate markets that determine values, since assessments are based on actual sales. Gray said "state law requires that all properties be valued at fair market value."
This revaluation process is not a full assessment but a statistical update. During a full assessment data concerning size, quality of materials and condition is collected for each house.
A statistical update is limited to recent sales. Data collected is used to approximate values in those neighborhoods. Gray says it's "not a perfect system." Rather, it looks at trends and is done "with a broad brush."
Municipalities must balance the need for current information against the costs of more complete inspections each time data is gathered. The attempt is "to do it in an economical way and still be fair."
The revaluation is being done by Appraisal Resource, a firm based in East Greenwich. Gray says they have worked in Jamestown for a dozen years, and the town has confidence in them.
Gray says the state monitors the whole process, and uses assessed values to judge the relative wealth of communities statewide. Assessed values have to be within 10 percent of fair market value.
For homeowners who wonder how well it really works Gray points out that in sales over the last three years, 99 percent of sale prices have been above assessed values.
State law requires that property values be adjusted every three years. A full assessment is conducted every nine years, the last one in 2003. Data for the current statistical update was collected last year, another will be done in 2009, and the next full assessment is slated for 2012.