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Reassessment: Values may drop, but not tax bills
By Jackie R. Broach
When Georgetown County last did property tax reassessments, some Waccamaw Neck property owners pleaded for a one-year delay.
Their values were on the rise and they wanted to lock in the old values as the state implemented a property tax reform plan that put a cap on values.
But the county was already a year behind in the five-year reassessment cycle, and County Council moved forward. That was 2006.
Another reassessment is looming, and County Administrator Sel Hemingway said he expects to see a very different situation this time around.
At least one county has asked for a delay in reassessment, according to the state Department of Revenue.
Georgetown County Council has had no formal discussion of reassessment, and probably won’t until the fall.
Assessors will begin determining new property values in December, and are scheduled to be used to in tax bill that are mailed out in 2010.
With property values falling nationwide, Hemingway said he has no doubt residents will push council to move forward with reassessment as quickly as possible. He said he’s already started hearing some buzz about reassessment and lower values.
“I think there will be a push to do it quick,” Hemingway said.
“They feel their properties have gone down in value and their taxes are going to be less.”
When their first post-reassessment tax bill comes, however, they’ll likely be surprised, Hemingway said. He suspects the numbers won’t be much different from what they’ve been seeing.
“The act of reassessment is revenue neutral,” Hemingway said.
By law, the county can’t make a profit from reassessment, so when property values go up, the county lowers the tax rate.
In this instance, if property values are down, the tax rate will go up to compensate.
“When you reassess, you take all the new values for every property in the county, then you look back at how much tax revenue was collected for the year immediately prior and divide by the new assessed value of property to establish the new millage rate. That rate is then applied to all properties,” Hemingway explained.
The result is that the county gets the same amount of money every year and most property owners will pay roughly the same amount in property taxes.
“Some people will have their tax bill go down, but it would be highly unusual if across the board the total was lower than the previous year,” Hemingway said.
For property owners to see a change in their tax bills, the value of their property would have to drop below the average decline. However, if a property saw a decline in value that was less than average, the owner would be hit with a higher tax bill.
And since state laws saws the value of property can rise no more than 15 percent during a reassessment cycle, Hemingway expects property owners will see only a very small incremental change in the tax rate in the future.
Local governments are limited in how much they can increase the tax rate in a single year. But Hemingway said the system is designed to maintain revenue neutrality and doesn’t allow for a situation in which a decline in values requires a higher tax rate to compensate for lost revenue.
The tax rate, or millage, would be calculated to maintain previous year’s revenue, then the cap would be applied to that base, said Scott Proctor, the county finance director.
Property is reassessed every five years, but also when it changes hands, so the county tax assessor’s office keeps up with changing values on a continuing basis.
A report hasn’t been done yet to show how values have changed since the last reassessment, said Vera Kirkland, a deputy assessor. A report probably won’t be completed until later in the year, she said.
A “tea party” in Georgetown marked the deadline for filing federal income taxes on Wednesday. See photos at coastalobserver.com.