Demystifying Assessing
(from Maine Townsman, February 1996)
by Jo Josephson

My value went up. What happens to the extra tax money?

I don't care if other properties sold for high prices; I'm not selling. Why should my value go up?

My property value went down, or stayed the same; do I get a refund for taxes paid?

Why do we need a revaluation?

Good questions-questions typically associated with revaluation and questions that deserve good answers, especially in these days of tight money and taxpayer distrust and revolt.

They are the kinds of questions that Cindy Michaud hopes her course "Understanding the Property Tax," a six-hour, adult education course that she will be teaching, will help answer.

Michaud, who currently serves as Waterville's assessor and who has taught courses in assessing to municipal officials in central Maine for years, says this is the first time she has taught such a course to your average taxpayer.

"It's time," says Michaud, who admits that the proposed statewide tax cap was a major factor in her decision to take to the streets. People need to understand, people need to know how it all works, people need to have more information than they hear on the streets.

Michaud says her course will focus on three areas:

As she sees it, "If you have no information and consequently no understanding of it all, how can you make an informed decision on the proposed tax cap?"

Echoing Michaud on the need for citizen education it this arena is Anne Gregory, Falmouth's assessor. It is Gregory's belief that people distrust that which they do not understand. "It is our job, as assessors, to demystify their assessment and help them make the connection between their assessment and their property tax," says Gregory, who is gearing up for a revaluation in Falmouth next year.

That said, the Townsman has gone fishing around the state to find out what municipalities are doing to enhance their taxpayers' understanding of property values and their relationship to the property tax. What follows are some of the approaches and materials being used. They are probably just the tip of the iceberg.

The Importance of Words

Everyone agrees that revaluations are about establishing or reestablishing equity. So it should come as no surprise that some cities and towns have begun to substitute the word equalization for the word revaluation when explaining the process.

It appears that the first municipality in Maine to do so was Brunswick, when in 1988, Assessor Robert Tripp developed a four-page brochure to answer questions on the upcoming revaluation of the town and entitled the brochure Equalization '88.

The first question raised in the brochure was: "What is the purpose of the equalization?" The answer: "The purpose of the equalization process is to more equitably distribute the property tax burden based upon valuation."

It should be noted that when Richard Main, the assistant assessor in Brunswick in 1988, moved on to become the assessor in Freeport, he recycled and refined the brochure for Freeport's purposes when the town undertook its own revaluation in 1992. Main titled the brochure--what else but--Equalization '92.

Main says the word revaluation implies that the goal of the process is to increase value. By substituting the word equalization, assessors are better able to convey to taxpayers that equity, not increase, is the driving force behind a revaluation.

But sometimes descriptive words aren't enough. Sometimes analogies with common everyday experiences are needed to make clear exactly what revaluations are. Freeport's Main likes to use the following analogy:

A group of us go to a good restaurant, where we each order a good meal and tell the waiter to put it all on one check. But after the meal is over, we notice that people start slipping out of the restaurant and only a few people are left at the table when the bill arrives. Rather than look for the missing diners, those remaining pay the bill.

Main says the analogy is useful in pointing out that revaluations are done to make sure no one slips out or pays more or less than his or her fair share of the taxes.

The Value of Numbers

Waterville's Michaud says that words and analogies aren't always enough to explain equity and that examples using simple math are an excellent teaching tool. What follows are some examples she uses in the assessing course she teaches to explain what happens when properties are not assessed equitably. Michaud says the important thing to remember in using numbers by way of explanation is to use numbers you can do in your head, as in the two examples:

Inequality in Property TaxValuation

Comparable property assessed equitably pays similar tax:

 

$ 100,000 X .0223 = $ 2,230.00

100,000 X .0223 = 2,230.00

100,000 X .0223 = 2,230.00

$ 300,000 X .0223 = $ 6,690.00

 

Comparable property assessed incorrectly pays a higher or lower tax:

 

Over-assessed taxpayer…….$ 150,000 X .0023 = $3,345

Average-assessed taxpayer… $ 100,000 X .0023 = $2,230

Under-assessed taxpayer…… $ 50,000 X .0023 = $1,115

$ 300,000 X .0223 = $6,690

Michaud says the above example clearly shows what happens when one taxpayer gets a "break," when properties are not equitably assessed--everybody else pays because the bill (the amount needed to run the town, schools, and county) hasn't changed!

Equity aside, Michaud also likes to use numbers to show the relationship between valuation and the mill. Again, she uses rounded-off, easy-to-use numbers to make her point, as in the example in the following example:

Effects of Value and Amount to Be Raised on the Mill Rate

Sample Rate:

Raise $ 2,000,000 = .020, or 20 mills, or 2 percent.

Value $100,000,000

Increase amount to be raised; no change in valuation:

Raise $ 3,000,000 = .030, or 30 mills, or 3 percent

Value $100,000,000

No change in the amount to be raised; increase in valuation:

Raise $ 2,000,000 = .010, or 10 mills, or 1 percent

Value $200,000,000

No change in the amount to be raised; decrease in valuation:

Raise $ 2,000,000 = .040, or 40 mills, or 4 percent

Value $50,000,000

The Question and Answer Format

Numbers aside, all those contacted for this article say that one tried and true way of explaining revaluation to taxpayers is to develop a reader-friendly (simple, uncluttered, and free of jargon and buzz words) brochure that anticipates taxpayers' questions. Excerpts from a variety of brochures follow:

Q. My value went up. What happens to the "extra" tax money?

A. There is no extra money. Your increased taxes may be offset by another property's decreased tax burden. An increase in your taxes probably indicates that you have been paying less than your fair share. Likewise other taxpayers have been paying more than their fair share.

Q. Why did my taxes go up and other people's taxes go down?

A. Although almost all properties have increased in value, some properties have increased at a higher rate than others. Those properties that have increased in value at an above-average rate will probably see a tax increase. Properties in that category include shorefront properties, rural land parcels, and apartment houses.

Q. When can I discuss my assessment?

A. Simple questions . . . may be handled in person or by telephone. Detailed explanations will be best handled by scheduling an informal hearing. The informal hearings will be carried out by experienced, assessing-office representatives.

Encourage Comparison

A picture is worth a thousand words when it comes to explaining equity and when it comes to comparing properties, says Elizabeth Cumback, the assessor in South Portland. Cumback should know. Photographs of almost all of the properties in South Portland are stored not on cards, but on computer disks. When a complaining taxpayer asks to see comparable properties, Cumback pulls the pictures of comparable properties onto the screen. Cumback says the technology is still in its infancy and that she is still waiting for the software that will automatically pull up comparable properties.

But not everyone has the time or inclination to meet with the assessor to look at comparable properties. Some people are just mildly curious. To meet their needs, Freeport and a number of other municipalities have taken to publishing the results of their revaluations, property by property.

Following its last revaluation in 1992, Freeport published the results in the local newspaper, noting the name of the owner, the address of the property, the value, and the tax bill before and after the revaluation. Taxpayers were able to compare their assessments with those of properties they were familiar with and judge the equity of the results for themselves. Some say that publishing such lists does away with the mistruths heard on the street.

To those who say it is too costly to print such lists, Freeport's Main says the local newspaper, The Times Record, published, at no cost to the town, the sixteen-page tabloid in which the property valuations of some 4,000 properties were listed for comparison.

Teach by Sound Bites

Brochures aside, if Anne Gregory, Falmouth's assessor, has one rule of thumb when it comes to educating property owners about the process by which their properties were assessed, it is "to teach by sound bites," that is, to provide the information in small amounts over a period of time.

To do so, Gregory makes liberal use of the town report and the town's newsletter, Falmouth Focus, in educating Falmouth's taxpayers. In a recent issue of the newsletter, Gregory developed a half-page article, "So You Think Your Assessment Is Too High," in which she noted:

According to Maine Taxation Law, your property's assessment is considered reasonable if it falls within 10 percent of its most probable selling price; i.e. Fair Market Value.

Gregory then went on to outline six steps taxpayers could follow in conducting their own informal review, and, for taxpayers who feel they need a formal review, she then outlined, using graphics, the process of the formal appeal.

Gregory uses the town report in a similar way, describing pieces of the process in a reader-friendly way.

Make Yourself Available

Gray Assessor James Thomas says he has no magic bullets. He just spends a lot of time on the phone and in the office answering questions one-on-one. "Plain vanilla," he calls his approach.

South Portland's Cumback would add a few spins to the one-on-one approach that she picked up in her research. One is a button worn by the assessing staff in a municipal office in Canada that welcomes questions. It says, "Let Us Explain."

Another good idea, a "brilliant idea," in Cumback's words, is one she picked up closer to home in Auburn and has recycled. It is to mail the impact notices in staggered batches, so that those with questions can reach the assessor by phone.

"If all they hear is a busy signal, the callers will think there was something wrong with the assessing job." Therefore, she sends her 9,000 plus notices out in four batches, by neighborhood, a week apart.

In the Wings

As Gregory prepares for the upcoming revaluation in Falmouth in 1997, her thoughts are turning to the production of a thirty-minute video that could explain the process in a visually interesting way. She has located a company that is interested in producing the video. Now she is looking for others to share in the cost of production, noting that as conceived, the video would be generic enough to be used statewide.

Note: Two brochures are available from the IAAO: For the Property Owner Who Wants to Know ($20 per 100 for members) and Understanding Your Assessment ($25 per 100 for members). The IAAO's informational videotape, A Fair Property Tax: The Assessor's Work ($35 for members), is excellent for explaining assessment to taxpayers. Call Debra Thomas, 312/819-6125 to order.

Public Relations during a Revaluation

Gerald E. Daigle, CMA, Assessor, Cape Elizabeth, Maine

 

Strive to provide complete and accurate data to taxpayers and non-taxpayers alike.

Be open and courteous when discussing the assessing or appraisal process.

Keep the discussion of the assessing function informal and avoid using too many technical terms.

Invite property owners to review their assessment records and to make value comparisons.

Make property assessment records easily accessible to the public, as required by the "Right to Know Law."

Be available to explain the abatement procedure to taxpayers and be as helpful as possible.

When talking with taxpayers, use brochures prepared by the International Association of Assessing Officers (IAAO) [see note above] to explain the taxation and valuation process.

Whenever a property valuation is adjusted, up or down, notify the homeowner by letter prior to the mailing of the tax bill.

Review any appraisal report or analysis and inform the taxpayer of the results of your review in writing.

Upon taxpayer request, mark the property assessment record for review during spring of the year.

Notify the town council and town departments about the project, along with goals and timetable. Report progress of the project to the council every other month.

Provide the local newspaper with details regarding the project and indicate when and where field work will begin.

Keep homeowners updated every two weeks by publishing in the newspaper the areas that will be visited next.

When no one is home, leave name cards with telephone number so a date to inspect the property can be set.

Speak to local community groups to explain the revaluation project and answer taxpayers' questions.

Mail notices of new valuations to all taxpayers showing the estimated tax rate and providing information on informal hearings.

Provide information on the abatement appeal process required by statutes; use simple language and explain taxpayers' rights.

Maintain a climate of openness, while being proficient in assessing matters. Be respectful of taxpayers, and keep your composure in meetings with taxpayers.

Provide a final report on the results of the revaluation project to the town council and the local paper.

Regardless of the project's success, always remain sensitive to the political climate among taxpayers.