In reflecting back about my summer activities, I spent an unusual amount of time working partly because I was still rehabbing from a persistent case of tennis elbow and couldn’t get on the courts at all. One of my more interesting assignments was to be hired as an expert witness by The Sage Tax Group to testify about land values in front of The State of Arizona Equalization Board, which is the body that hears individual cases where property owners have appealed the Assessor’s recommended valuation of their property and disagree with the Assessor’s “final” conclusion. It is the next, and last appeal procedure  a tax payer has before filing a lawsuit, which is too costly and time consuming for most individuals to endure. (I’ll talk about the entire appeal process in an upcoming post). Thus, this appeal process becomes critical in a taxpayer’s hope to establish a reasonable market value for their property, based upon current market conditions, and to wind up paying a fair amount of annual real estate tax. The impartiality of the Board is critical as it purports to mediate an opposing view of values; the Assessor’s and the taxpayers.

I attended three hearings, each dealing with high end vacant lots in distinct areas and in some cases whole subdivisions around Tucson. I was given the locations and the individual lots prior to the hearing allowing me to do the appropriate research. The assignment and the purpose of the hearing was to determine the full cash value of each property as of January 1, 2009, as compared to it’s value in January 1, 2008. The critical  focus and discussion was the real estate market during the 2008 calendar year and it’s effect on land values.   Full cash value is an Assessor’s term which is used to calculate the actual amount of tax to be paid and is usually 70% – 80% of the parcel’s market value. The format of the hearing was that an Assessor’s employee would  make a presentation, recommending a value; the tax payer representative would then make a counter proposal and suggest a value; questions would be asked by the hearing officers and then they (if there were more than one officer) would have a discussion and establish a value. Prior to the hearing, the tax payer representative and the Assessor had discussed values and in some cases come to an agreement. The cases heard by the Equalization Board are the cases in which they disagree.  As I mentioned,  this is a final determination short of filing a lawsuit.

In each of the hearings I attended the composition of the Board was different and became  perhaps the most critical factor in determining the outcome of the hearing.  In the first it was staffed by a single member, who I found out was a retired, 30 year, past employee of the Pima County Assessor’s office. The second hearing was staffed by a three member panel comprised of two, currently active, independant land appraisers and a retired, 25 year past employee of the Assessor’s Office. The final Board was staffed by a two member panel including the retired Pima County Assessor and a private real estate investor/owner. The make up of these Board’s was striking to me in the sense there seemed not to be an independance from the major stakeholder in the dispute; the Assessor’s Office. The deck appeared to be stacked against the taxpayer. How could an individual expect a fair, unbiased, interpretation of the market’s effect on their property’s value?

Wasn’t the purpose of the hearing to weigh the facts and make sure full cash value accurately reflected changing market conditions?

Could a career County employee or the retired County Assessor provide a ruling giving credence to both sides of the argument?

To be continued.

This entry was posted on Monday, November 9th, 2009 at 8:38 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.