Property tax protest! It's on the minds of many people, some ofwhom may never have thought about it until various groups formed in Baltimore County.
My group, Property Taxpayers United, started in January 1990 when central Baltimore County property owners were reassessed. Now new groups and extensions of our group are organizing in Dundalk, Essex, Perry Hall, Parkville and elsewhere. These are the homeowners from the Eastern part of the county who recently received their new assessments and tax bills. Thousands of them don't feel they've been treated fairly, otherwise the appeals (we call them protests) wouldn't be pouring into the Department of Assessments and Taxation so fast and furious.
It doesn't surprise me to see the protest groups forming. It was inevitable because the Maryland State Department of Assessments and Taxation didn't learn its lesson in 1990. Overall, Baltimore County property values are not what the assessors (we call them "assessorcrats") say they are. Real-estate sales are down and property values have fallen. Therefore, the old gimmick cast by the assessorcrats upon the homeowner: "Well, wouldn't you sell your house and ground for what I assessed it?" no longer works. In many instances, homeowners are replying: "Hell yes! Now you go get me a buyer!"
One of the major issues in the dispute between the property owner and the assessor is fairness. Just what is the fair market value of one's home and land? In depressed times the value drops, and we are in depressed times. One man whose house and land jumped from $147,000 full cash value to $287,000 has put his property up for sale at the recent reassessed value. "I know it won't sell," he said, "and after it sits there for a year, I'm going to the Department of Assessments and Taxation and demand a reduction -- a big reduction -- in my assessment.
There is another issue that incites property owners as they learn more about the protest process. This is the three-level process established by the Department of Assessments and Taxation that the dissatisfied property owner can try to muddle through in an attempt to receive fair reductions.
The first level is a meeting with the assessor who is usually reluctant to admit he was wrong. The burden of proof in showing he was wrong rests with the property owner, who must provide documentation of depreciation on the home and/or land (land doesn't depreciate much unless there are drainage or other problems with it) and cite comparable properties.
"Comparables" are work sheets of other homes in the neighborhood or surrounding area that show inconsistencies in assessments. These work sheets contain facts and figures in various columns and blocks that convey how the assessor arrived at his final reassessment of your property. Assessors do make mistakes, and there are inconsistencies, but again, it's up to the property owner to find them.
Many errors fall in the grade of the home which ranges from one to eight. A one is a shack while an eight is a mansion. The average home (3 bedrooms, 1 1/2 baths, up to 2,000 square feet) is a grade four. Under the category of Building Cost Index, a 3.76 is too high because the market leveled off last year. Another item to watch carefully is condition. This is graded one through seven, but there are no known written criteria for it. Judgment as to condition is left entirely to the assessor. This is strictly a subjective opinion and should be challenged.
Another important category is depreciation. There should be a depreciation factor of one per cent per year for the age of your home. Look for the figure given for the preceding assessment. It should be lower than the new figure. Homeowners are finding that in many instances the depreciation has dropped and it should increase because the home is older. One man's worksheet listed 40 percent depreciation three years ago and the latest figure shows only 23 percent, something he will challenge at this protest hearing.
A property owner might also challenge the MVI -- Market Value Index. This figure should never be higher than 1.00 on an average property and preferably .90 or less.
If the property owner finds errors or discrepancies, presents them to the assessor at the protest hearing and is not satisfied with the reduction he receives (if any) he may protest at the second level -- the Property Tax Assessment Appeals Board. This is a three-panel board which hears the same protest all over again as the property owner presents his case and the assessor tries to defend his. Property owners should be aware that they stand a much better chance of a reduction here than at the first level.
A third level is an appearance before a representative of the Maryland Tax Court, where the property owner and assessor present their cases again.
Property Taxpayers United fees this whole process is a ruse -- a bureaucratic nightmare designed to confuse and discourage the property owner. We feel it should be simplified. One way to do this would be to get the state out of the assessment process and let each county and Baltimore city handle the reassessments and continue to set their tax rates. There is other suggestions we have, but there isn't enough space to review them here. PTU holds regular meetings to educate the public. Workshops are being conducted throughout the county where trained citizens are helping fellow citizens interpret their property tax worksheets. Our motto: "Knowledge is Power."
David Ellsworth Boyd is president of Property Taxpayers United.