Property taxes for local homeowners will increase dramatically due to “factoring order”
There will be a dramatic increase in property taxes for local homeowners when tax assessments are sent to San Juan County property owners in coming weeks.
This will occur, despite the fact that the individual taxing entities will not experience an increase in overall collections. It is part of an overall shift in the property tax burden in San Juan County from industrial properties to homeowners.
A “factoring order” through the Utah State Tax Commission resulted in an across-the-board 21 percent increase in the assessed value of each privately-owned home in the county. The increase is even higher in specific areas, including a 34 percent increase in the Blanding area, a 35-percent increase in the Monticello area, and a 41-percent increase in Spanish Valley.
The San Juan Record has put together the tax rates set by each taxing entity and determined that the overall tax bill for homeowners will increase by roughly the same amount as the factoring order. The initial communication of a possible tax bill generally arrives in August and the tax bill is due by November 30.
Local taxing entities who met in recent weeks to determine the tax rate were generally caught by surprise by the development. The majority of the entities adopted the “certified rate”, which is the tax rate that results in the same amount of total collections as the previous year.
The certified rate is the highest tax rate that the entities could set without going through Truth in Taxation hearings.
At a June 22 meeting to set the San Juan County rates, San Juan County Assessor Rick Meyer explained that a dramatic increase in the prices of home being sold in the county triggered the factoring order.
“Every year, the assessor conducts a sales ratio study,” said Meyer. “Of 100 sales in county, about 70 were used to compare the value to the sales price.
“The market values have gone way, way high based on properties sold in Spanish Valley, Monticello, Blanding, and Bluff.”
Meyer told of homes in Spanish Valley which were valued at $300,000 and sold for $600,000. He also mentioned a home in Blanding that was valued at $80,000 and sold for $250,000.
Meyer said that the State of Utah says county valuations must be kept between 95 and 105 percent of the market value.
“We were way, way, way low based on market value,” said Meyer, who became the assessor in January.
Greg Adams, the prior assessor who continues to work in the office, added, “The market is driven by sales by the public. The assessor processes the figures.
“We don’t change the market; the sales change the market. No matter what we do, we are held hostage”
The factoring order for homes came at the same time as a continued decline in the value of centrally-assessed industrial properties.
These properties include oil, gas, mining, pipelines, communication towers, industrial and infrastructure properties. In the distant past, they provided up to 85 percent of the property tax base in San Juan County.
That has changed over time and even accelerated in recent years. The centrally assessed property were two-thirds of the San Juan County tax base just ten years ago and now are roughly just one-third of the tax base.
The value of these properties dropped by $30 million in the past year, with the majority coming after an appeal by Elk Petroleum in the value of its properties in the Aneth Oil Field.
San Juan County Commissioner Bruce Adams complained about the process of setting the centrally-assessed values. “When a company gets a tax bill, they run to the state tax commission and complain about it,” said Adams. “I’ve never seen the tax commission deny a tax appeal.
“This means that it shifts everything from those companies back to the homeowner. How do we correct that?”
At the end of the June 22 meeting, Commissioner Adams explained, “I’m not sure what choice we have” while moving to accept the certified rate.
Commissioner Willie Greyeyes seconded the motion and added, “There is no way out, I guess.” Commission Chairman Kenneth Maryboy did not participate in the hearing.
“We are in a bind,” said Adams. He explained that San Juan County has had no employee raises in several years and added, “I know that this is on the back of the homeowners. We can lower the rate, but I don’t know how to fix the value part of it. That is the part that is a little unfair.”
Nielson explained that homeowners will be getting notice of taxes next month that will show both tax rates and property value.
“If you do not feel that the value is correct, you do have a remedy with the Board of Equalization,” said Nielson.
Describing how the Board of Equalization works, Adams said, “You can speak with a hearing officer and you need to have evidence why you think that your valuation is too high.” This evidence could include proof of a similar sale, a recent appraisal, and more.
A small number of county residents participated in the public meeting, which was hastily called after a previous Commission meeting and changed starting times.
Monticello City Council member Kim Henderson expressed frustration that Commissioner Maryboy wasn’t in attendance and asked about the impact on homes used for nightly rentals.
Monticello resident Doug Allen expressed frustration with the situation and added, “Everything I’ve seen by this commission, is that anything with centrally assessed value is shot down by this commission by a 2-1 vote.
“These two commissioners reside in an area of the county where no property tax is due and this is shifting all the burden to those of us who do have to pay it.”
After officials reported that the factoring order came from the state, Marlene Huckaby, of Spanish Valley, said, “We come to you and complain because we think you did it and now we see that you didn’t do it.”
Huckaby added that this development “may discourage people from buying vacation homes and that could be a positive.”
Ann Austin, of Spanish Valley, requested that Commissioners “ask the state to reduce the tax rate to let people catch up” and said that “state promotion of growth has left the homeowners out to dry.”
The Assessor’s office announced that businesses will be appraised next year across the county, for the first time since 2012
Adams added, “So this is not only bad news for the homeowners this year, but it will be bad news for businesses next year.”
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Seems to me the County Assessor receives a list of properties that sold on a given year, including location, and the selling price. It would seem logical, when a property sells, the property value increases, and taxes are indexed to that price. In a County of 15,000 residents, it cannot be that difficult to follow the sales and adjust taxes accordingly. One could adjust all properties, sorted by use, etc. based upon the sales value increase based upon location. Spanish Valley being the highest value per sq ft, decreasing as one moves south with perhaps the exception of Bluff, Blanding, and Monticello, where services are available.