Fillmore County Assessor Jason McCaslin presented a review of details involved in finalizing the 2023 market adjustment at the March 27 Rushford Council meeting. McCaslin covered Rushford, as well as other municipalities and the county as a whole.
McCaslin noted that things that affect the county tax rate vary and that time adjustments had a tremendous impact on the changes. He appealed the Department of Revenue’s originally calculated 12.56% residential inflation and adjusted it to trend at zero percent.
“Things have turned a corner. It appears the market might have turned,” he said. “I respond to data; I don’t predict where it’s going. It now appears things have flattened out.”
He spoke next to the Price Related Differential, a “statistic used to measure vertical equity in the assessment.” Data showed that properties with lower sale prices produced higher sales ratios than those with higher prices. This situation happens when lower-valued properties sell for higher than their value, while higher-valued properties do the opposite. The assessor’s office aims to keep the trend line flat in this respect. Still, it is trending decidedly downward in a regressive pattern.
“The most common strategy to correct a regressive trend is to apply an increase to the base rate tables and then increase the depreciation of homes with lower market value,” he noted. “Typically, the assessor’s office uses a range of market values to adjust the impacted sale levels and flatten the trend. With where the assessment is in the county, I couldn’t accomplish that with the formula. So I had to find a different avenue to pursue.”
Utilizing sale ratios versus depreciation and sale ratios versus year built ultimately indicated where the assessor’s office could correct the trend. Applying adjustments based on depreciation percentage and actual year built, McCaslin was able to flatten the trend.
“I made as much progress as I could with the data that I have in my sample [Fillmore County]. Rushford didn’t get hit with this,” he added, noting the adjustment for compliance. Our actions didn’t get us as close to compliance as I wanted them to, but we made significant improvements. We made two really good steps in the right direction this year.”
“This should motivate property owners to let our appraisers into properties,” he continued. “Educating the local jurisdictions will hopefully get people thinking about what we’re doing.”
McCaslin did note the fear people have of letting appraisers into the properties and that it automatically correlates to a raise in their taxes. “This couldn’t be further from the truth. We’re here to spread the tax burden evenly.”
Jurisdictions with six or more sales automatically trigger mandatory state compliance to maintain a 90-105% median sale ratio. Rushford was one of these jurisdictions. “You’re one of the few indicating a stronger market,” noted McCaslin, noting the application of a 7% increase in house values to get into compliance.
“Commercial industry is flat-out scary,” he added. The median ratio was far below compliance. As a result, the state initially looked at a 30% increase in all commercial properties in the county. Instead, the assessor’s office reassessed areas that would impact the median the greatest. “We focused on areas producing consistently low ratios and reappraised them instead of applying a high increase across the county.”
Overall, the total estimated market value of Fillmore County will rise by 16.7%. “All things remaining the same; when you add that much tax capacity, it should cause tax rates to drop,” said McCaslin. “Ultimately, the county and school district rates are where you will see the most changes.”
Rushford will be getting reappraised in 2024. “Statistically, it’s one of the better-assessed jurisdictions in the county.”
The council approved a request by the Federal Aviation Administration for a transfer of entitlements. In 2022, Rushford received two transfer entitlements from the cities of Marshall and Waseca in the amounts of $14,402 and $76,901. The city used the funds to complete the federal funding portion of the T-Hangar Replacement Project. Using 2023 entitlements, Rushford will repay the entitlement funds. The council discussed this shifting of funds from one federal pot to the other last year before approving the transfer agreement, and this completes the transfers.
The next regularly scheduled council meeting is Monday, April 10, at 6:30 p.m. at city hall. The public is encouraged to attend.