Even though St. Louis County residential assessments last week dropped by a median of 9 percent — the first such drop that county officials recall — some County Council members may work on legislation to seek even further tax relief.
The county Department of Revenue last week posted the new 2009 assessments of more than 365,000 county properties on its Web site at revenue.stlouisco.com/ias.
Property owners can search for their properties on that site and see their newly assessed value.
Sixth District County Councilman Steve Stenger, D-south county, and 7th District County Councilman Greg Quinn, R-Ballwin, believe the county’s median 9-percent drop in assessments didn’t go far enough.
“It’s nice to see that there’s a reduction for the residents,” Stenger said. “At the same time, I would have liked to see it be more.
“But Greg Quinn and I are talking about legislation that would bring these rates more into line and something lower than it is right now,” Stenger added.
Quinn last week proposed dropping assessments by 20 percent to 25 percent to reflect some housing index reports of home prices dropping by as much as 25 percent in 2008 alone.
But county spokesman Mac Scott is skeptical of those indexes as officials base fair market value on all 35,000 estimated home sales in St. Louis County in 2007 and 2008.
“From January 2007 until the end of December 2008, there were 35,000 home sales in St. Louis County,” Scott said. “We took those 35,000 sales and determined the comparables from that … I’ve seen studies that say real estate in St. Louis County is down 30 percent, 25 percent. But they’re looking at 500 homes or something. We looked at 35,000 sales. This is pretty extensive stuff.”
But Quinn said at a press conference last week that he does not believe the county accurately has included foreclosures and that county officials should not use comparable home sales from two years ago to assess properties. In the county’s 2007 reassessment, the county increased the assessed value of homes by an average of 22 percent.
“The county’s assessment process takes into account certain things and omits other things that are very relevant to assessed valuations,” Quinn said. “They can’t really achieve the real value the way they do the process now. One thing they omit is foreclosure sales. Foreclosure sales have a tremendous effect on the value of real-estate properties in the area of foreclosures. One of my constituents said to me: ‘Greg, I can’t sell my property for any amount that would be reasonable because there’s a property that was foreclosed on the same block that I live on.’ The foreclosure property was actually selling for about half of what this particular taxpayer was trying to sell his house for.
“The other thing that is put into the mix that should not be is that the valuations from more than a year ago are put into the mix and determining comparables … That has the effect of minimizing the overall reduction in values. If you take values from 2007 and compare them to 2008, 2008 values are down considerably. If your property is compared to a 2007 comparable, you’re going to have a much higher valuation and a much higher assessment than someone who’s property is compared to a 2008 sale. So the county’s valuation system is flawed.”
Scott said that while time on the market and foreclosures certainly are factors in determining assessed value, they are not included as comparables.
“Homes are on the market longer,” Scott said. “That is factored into our final appraised numbers as are foreclosures. Foreclosures are not used as comparables because a foreclosure is not a comparable sale. It’s not an arm’s-length transaction. So those numbers have to be looked at in a different way. So, does a foreclosure have an impact on property in a neighborhood? Of course it does. And that gets figured into the final numbers.”
He added that if property owners believe they were assessed at an inaccurate level, they always can appeal to the county and the Board of Equalization. He added that homeowners can see comparable homes on their updated assessments at the Department of Revenue’s Web site.
“It not only shows you the homes that you are comped against, but it will show you how big those homes are, what the size of the yard is, what kinds of amenities that house has,” Scott said. “You can see how those homes are compared.
“And you might look at it and say: ‘Well, wait a second. They comped me with a house that doesn’t match my house.’ That would be something that would be good to talk about at our informal appeal process. That’s a really valuable tool for us because we’ve got 365,000 homes in St. Louis County. Accuracy is our goal. But out of 365,000, that doesn’t mean that we’re going to be exactly right on every single property.”
To ensure more accuracy, Quinn believes county officials should stop using home sales from two years ago in calculating assessed value. He also said that county officials should be less concerned about any property-tax revenue that the county may lose from lower assessments and more concerned with fair market value.
“The county has had significant increases in property-tax revenues over the last three cycles,” Quinn said. “Very dramatic increases of 22 percent two years back. This is not supposed to be a process that is based on the county’s revenue needs. It’s based on just the assessed valuations, just the values that properties are selling for. That’s what the county said two years ago when they went up 22 percent.
“The county administration said: ‘Hey, we don’t have any choice. Values went up 22 percent. So we have to raise assessments to that amount.’ It’s not supposed to be based on the amount of revenue that the county will realize from that. The county has significant balances in each of its funds.”
Stenger said while he is happy for his south county constituents that assessed values have dropped, he advocates further declines.
“As far as our district goes, we have so many people on fixed incomes,” he said. “They can be pushed out of their house without too much of an increase at all. So it’s nice to see a decrease. I’d like to see more, especially in these times. I want to definitely drill into those numbers and see where the 6th District falls and how it’s all divided up.”
But Scott said that because state law requires that properties be assessed at 90 percent to 100 percent of fair market value, he does not believe that a 20-percent decline is possible.
“Our question is how do you come up with 20 percent?” he said. “You can’t just arbitrarily say values have to drop 20 percent. That would be in violation of state law. And we’re not going to violate state law. But if (Quinn) can show us we can drop 20 percent, believe me, we’ll drop 20 percent.”
