41 st Annual Conference Appraising Property

Transcription

1 2017 KCCA 41 st Annual Conference Appraising Property Kansas County Commissioners Association Junction City, Kansas June 2, 2017

2 Topics Overview PVD s Role in the Appraisal Process Appointment of County Appraiser Compliance Review PVD s State Assessed Duties Value and Levy Trends 2

3 Appraisal History 1. Kansas underwent a complete, statewide reappraisal that commenced in the mid-1980 s and became effective January 1, a) This resulted in: a) a classification system, b) the adoption of a statewide computer assisted mass appraisal system (CAMA) c) adoption of the majority of laws governing the appraisal process 3

4 Appraisal History , a case was filed by the Attorney General against the State of Kansas alleging property values in Kansas were not as uniform and accurate as one would expect after just undergoing a statewide reappraisal 4

5 Appraisal History a) Court case was ongoing until 1999 b) Resulted in further changes in law and procedure, including the state taking over the sales ratio study, improved appraisal guidelines and more rigid county appraiser qualifications 5

6 Appraisal History Results of Law Suit Pushed Kansas ahead nationally in terms of appraisal and assessment tools and techniques. Established laws that promote more uniform and accurate valuations. Requires acceptable levels of statewide uniform and accurate valuations 6

7 Appraisal History Results of Law Suit Recognition failure would likely result in another lawsuit at some point 7

8 Ad Valorem Property Tax Today $ billion of taxable value now generates $4.5 billion in revenues per year The property tax is the largest, single source of revenue in Kansas. 8

9 Appraisal and Assessment Uniform and Equal Constitution Article 11 the legislature shall provide for a uniform and equal basis of valuation and rate of taxation of all property subject to taxation. 9

10 Appraisal and Assessment Uniform and Equal Value = Market Value for all but land devoted to agricultural use and commercial and industrial machinery and equipment Rate = assessment rate (percentage of value) 10

11 Classification Class 1 Real Property Subclass Assmnt Value Residential 11.5% Market Ag Land 30.0% Productivity/Income Vacant Lots 12.0% Market Not-for-Profit 12.0% Market Public Utility 33.0% Market Comm/Industrial 25.0% Market Other 30.0% Market 11

12 Property Tax Calendar January 1 - annual appraisal date March 1 Mailing of Real Property Valuation Notices (appeal within 30 days) May 1 Mailing of Personal Property Valuation Notices (appeal by May 15) June 1 Certification to county clerk

13 Property Tax Calendar August 25 Budgets to county clerks November 15 clerk certifies abstract report of values, taxes, levy to PVD December 15 tax statements sent December 20 first half or full payment due May 10 second half payment

14 Appraisal System Integrated Roles of County and State PVD to administer and supervise a statewide program of reappraisal of all real property located within the state (K.S.A ) 14

15 PVD and K.S.A To have and exercise general supervision over the administration of the assessment and tax laws of the state To the end all assessments be just and uniform and at its true full cash market value (K.S.A , First) 15

16 K.S.A To investigate the work and methods of county and district appraisers in the assessment of all kinds of property (K.S.A , Ninth) To extend all statutory deadlines prescribed for the mailing of valuation notices, certification of appraisal rolls and the completion of valuation and classification hearings which (K.S.A , Seventeenth) 16

17 County Appraiser Appointment (K.S.A ) On July 1 of each fourth year the board of county commissioners shall by resolution appoint a county appraiser who shall serve for a term of four years expiring on June 30 of the fourth year No person shall be appointed to serve as county appraiser unless such person shall have 1) at least three years of mass appraisal experience and; 2) be qualified by the director of property valuation as an eligible Kansas appraiser act. 17

18 County Appraiser Appointment (K.S.A and ) No person shall be appointed as county appraiser unless such person is currently: (1) A certified general real property appraiser (2) a registered mass appraiser (RMA) or (3) a designation from IAAO The director of property valuation shall maintain a current list of persons eligible to be appointed to the office of appraiser 18

19 County Appraiser Appointment (K.S.A ) Once certified, an eligible Kansas appraiser may retain that status only through successful completion of additional appraisal courses (120 hours every four year term) The commissioners may appoint an interim county appraiser, subject to the approval of the director of property valuation, for a period not to exceed six months 19

20 County Appraiser Suspension/Termination (K.S.A ) County Commissioners failure or neglect to properly perform the duties of the appraisers office, by reasons of incompetency or for any other cause PVD - failure or neglect to discharge appraiser's duties as required by law and that the interest of the public service will be promoted by the removal of such appraiser 20

21 County Appraiser Appeal of Suspension/Termination (K.S.A ) Commissioners within 15 days after service of an order of suspension or termination, the appraiser may request a hearing on the order before the director of property valuation PVD - within 15 days after service of an order of suspension or termination by PVD director, the appraiser may request a hearing on the order before the state board of tax appeals 21

22 County Appraiser Suspension/Termination Miller v. Board of County Commissioners, Wabaunsee County When a county board terminates an appraiser who then timely seeks review his or her employment, salary, and benefits are not ended unless and until the PVD decides to terminate the appraiser. The appraiser is conditionally terminated 22

23 County Appraiser Suspension/Termination Miller v. Board of County Commissioners, Wabaunsee County this interpretation results in a statutory scheme that insulates a county appraiser from political pressures, thus ensuring uniformity and integrity across our State's tax valuation system. 23

24 PVD s Annual Compliance Review 1. Statutory Compliance timely notice of value (alternate methods) notification of appeal rights and comply with routine inspections of properties (6 years) timely certification of values 24

25 Annual Compliance Review 2. Procedural Compliance Compliance with the Uniform Standards of Appraisal Practice(USPAP) Compliance with valuation Guides and methodology Analysis completed to document / support value conclusions 25

26 Annual Compliance Review 3. Statistical Compliance Sales Ratio Study Compares appraised values to sale prices to appraised values from the prior year Measures: Overall level of Appraisal (Median Ratio - Appraised Value / Sale Prices) Uniformity (Coefficient of Dispersion - COD) 26

27 Annual Compliance Review 3. Statistical Compliance Results are provided annually to the legislature, Governor, county commissions, appraisers and published on the PVD website 27

28 Compliance Results 28

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32 State Appraised Bureau of PVD Public Utility Section Appraise all Public Utilities and Railroads in the state Similarities to locally appraised - Values certified to each County Clerk on June 1 with listing of value by company Assessed values are then included in budget and mill levy process, just as locally assessed property

33 State Appraised Bureau of PVD Differences from locally appraised Unit Value Market Value of the entire unit not individual parcels Allocation to the State Kansas Investment / Total Investment (original cost) of the Unit

34 State Appraised Bureau of PVD Allocated value is then distributed to each taxing unit where property is reported Distribution also based on total investment Appraised value (unit value) can increase but allocated value decrease Public Utility Workshop now offered by PVD

35 Impact on Property Tax Revenues 2016 Taxes 1. Westar Energy: $98,504, Kansas Gas & Electric: $50,983, Kansas City Power & Light: $45,581, Union Pacific Railroad: $40,790, BNSF: $30,319,889

36 State Appraised Bureau Oil and Gas Annual oil and gas guide publication and guide meetings (Open Meetings) Guide Only designed for the majority of the properties Locally appraised appraiser has the right to deviate from the Guide to achieve market value KCAA Guide Review

37 Ag Use State Appraised Bureau Work with KS Ag Stats and KSU to generate annual use values Summary of Value changes is provided Appraiser determines classification

38 State Appraised Abstract Section

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41 Other PVD Activities - ORKA Open Records for Kansas Appraisers (ORKA) standard viewer that allows counties to display your CAMA data GIS map and aerial imagery over a website funded by PVD as part of the original CAMA agreement gives all Counties an opportunity for online data searches for taxpayers Web based can be used by all county departments

42 Other Projects - ORKA Statewide Database with GIS Parcel Layers through ORKA Only source for property data, land uses, lot sizes, zoning, etc. Helps us in quality review, legislative research, special use property appraisals Requests from Other state agencies Federal agencies 911, Emergency Management

43 Other Projects - GIS Statewide GIS Kansas One Map 8 Counties who are not Using GIS Technology for Cadastral Mapping PVD is willing to provide technical assistance to help

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45 Homestead Abatement of Tax Destroyed or Substantially Destroyed Where cost of restoration >= 50% of Market Earthquake Flood Tornado Fire Storm 45

46 Homestead Abatement of Tax Destroyed or Substantially Destroyed Where cost of restoration >= 50% of Market OR an event which the KS governor has declared a disaster. 46

47 Homestead Abatement of Tax Destroyed or Substantially Destroyed includes: Dwelling owned or rented and occupied Home site land Part of Multi-dwelling or Multi-purpose building Manufactured Home or Mobile Home 47

48 Homestead Abatement of Tax Destroyed or Substantially Destroyed: Jan 1 thru Aug 14 Tax Abatement (a tax credit if taxes paid / a tax credit to be used in the next 3 tax years. Aug 15 to Dec 30 Tax Credit to be used in the next 3 tax years. Application made on or before Dec 20 of the next year following the event. 48

49 Homestead Abatement of Tax Destroyed or Substantially Destroyed: Application made by owner to county commissioners. County commissioners: Make findings from the facts. Subject to budgetary restraints may abate all or any portion of property tax. 49

50 Ad Valorem Property Tax The property tax is the largest, single source of revenue in Kansas. It now generates $4.5 billion per year from $ billion of taxable value. ($1,581) Property taxes are the main source of revenue to fund local services provided by cities, counties and other taxing subdivisions for: roads, streets, parks, ambulance, fire and police protection, schools, community colleges and other services. 50

51 Billions $35.00 Statewide Assessed Value $ $ $30.00 $ $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Source: PVD Statistical Report of Property Assessment and Taxation. 51

52 Assessed Value % of State Total Value Change % Change % of Total State Total 32,335,682,539 33,156,180, ,497, Johnson 8,596,685,414 9,230,030, ,344, Sedgwick 4,410,039,623 4,531,478, ,439, Shawnee 1,572,755,208 1,598,497,199 25,741, Douglas 1,215,923,483 1,255,246,445 39,322, Wyandotte 1,182,971,926 1,215,048,749 32,076, Total Source: PVD Statistical Report of Property Assessment and Taxation. 52

53 1996 Assessed Value Major Classes of Property % of Total Value 7% 4% 17% 8% 38% Residential % of Total C&I % of Total Utilities % of Total Ag Land % of Total Oil & Gas % of Total All Other % of Total 26% Source: PVD Statistical Report of Property Assessment and Taxation. 53

54 7% 2016 Assessed Value Major Classes of Property % of Total Value 1%2% 13% Residential % of Total C&I % of Total 50% Utilities % of Total Ag Land % of Total Oil & Gas % of Total All Other % of Total 27% Source: PVD Statistical Report of Property Assessment and Taxation. 54

55 Billions of $ $18 $ % $14 $12 $10 $8 27.0% $6 $4 $2 12.7% 6.8% 1.4% $ Year Residential C&I Real/PP Public Utility Ag Land Oil & Gas Source: PVD Statistical Report of Property Assessment and Taxation. 55

56 Billions 2.50 Statewide Ag Land Values Total Assessed Value Kansas 49,018,354 Acres $154/Ac Appraised Value $6.54/Ac Tax 2.0% 8.8% 12.7% 17.5% 16.1% 14.5% 0.00 Source: PVD Statistical Report of Property Assessment and Taxation. 56

57 16.00 Crop Prices SC 60e Average Annual Price 8 Year Average Soybeans Wheat Corn Sorghum (1999) (2005) Source: PVD Statistical Report of Property Assessment and Taxation. 57

58 3.000 Oil & Gas Value (Billions of Assessed Value) Statewide Source: PVD Statistical Report of Property Assessment and Taxation. 58

59 Ad Valorem Property Tax Statewide Levies K-12 schools (20 Mills) = $618,489,000 KS Education Building Fund (1 Mill) = $33,156,000 State Institutional Building Fund (.5 Mill) = $16,578,000 K-12 schools (all other) = $1,153,982,000 (37 mills) 59

60 K-12 Levy Year State Set Local Set 1991 None Mills $116.0 M Mills $97.8 M Mills $127.6 M Mills $143.7 M Mills $136.5 M Mills $181.6 M 60

61 150 Statewide Average Levy Statewide County Avg Source: PVD Statistical Report of Property Assessment and Taxation. 61

62 150 Statewide Average Levy Lowest County Avg Levy Statewide County Avg Low County Avg Source: PVD Statistical Report of Property Assessment and Taxation. 62

63 250 Highest County Avg Levy Statewide Average Levy Lowest County Avg Levy High County Avg Statewide County Avg Low County Avg Source: PVD Statistical Report of Property Assessment and Taxation. 63

64 County Average Levy > 180 County Rate Bourbon Cloud Haskell Kearny Lane Elk Labette

65 County Average Levy > 180 County Rate Chautauqua Greeley Hamilton Stanton Smith Clark

66 Effective Tax Rate The tax rate expressed as a % of the Market Value. Example #1 Tax paid / Market value = ETR $1,500 / $100,000 = 1.5% ETR 66

67 Effective Tax Rate The tax rate expressed as a % of the Market Value. Example #2 Assessment Rate X Levy = ETR.115 X.136 = 1.56% 67

68 Effective Tax Rate Subclass Assessment Rate State Avg Levy Effective Tax Rate Market Value Residential 11.5% % $100,000 $1,563 Commercial 25.0% % $100,000 $3,398 Utility 33.0% % $100,000 $4,486 Tax Source: PVD Statistical Report of Property Assessment and Taxation. 68

69 Residential Effective Tax Rate State Effective Tax Rate Kansas (13) 1.47% Nebraska (12) 1.50% Iowa (15) 1.43% Missouri (19) 1.11% Oklahoma (29).89% Colorado (48).52% Texas (2) 2.06% New Jersey (1) 2.30% 69

70 Effective Tax Rate (Lowest) County Avg Urban Levy Residential ETR Commercial ETR Leavenworth % 3.45% Brown % 3.41% McPherson % 3.39% Coffey % 3.34% Saline % 3.30% Nemaha % 3.30% 70

71 Effective Tax Rate (Lowest) County Avg Urban Levy Residential ETR Commercial ETR Douglas % 3.30% Grant % 3.17% Pottawatomie % 3.06% Johnson % 3.06% Sedgwick % 3.04% Ellis % 2.84% 71

72 Effective Tax Rate (Highest) County Avg Urban Levy Residential ETR Commercial ETR Edwards % 5.41% Woodson % 5.50% Kearny % 5.57% Republic % 5.63% Haskell % 5.63% Graham % 5.63% 72

73 Effective Tax Rate (Highest) County Avg Urban Levy Residential ETR Commercial ETR Wichita % 5.73% Hamilton % 5.76% Morton % 5.80% Rooks % 5.84% Chautauqua % 5.89% Stanton % 5.96% 73

74 Effective Tax Rate (Highest) County Avg Urban Levy Residential ETR Commercial ETR Elk % 6.02% Comanche % 6.06% Greeley % 6.17% Clark % 6.63% Smith % 6.84% Lane % 7.06% 74

75 Contact Us Division of Property Valuation Kansas Department of Revenue 915 Harrison Street, Room 400N Topeka, KS