Fillmore County Auditor/Treasurer Christy Smith recently sent out proposed property taxes for 2023 to property owners. Property taxes are collected to pay for services provided by the county, city, township, and school taxing districts. Each property owner is asked to pay his/her fair share, no more and no less. Jason McCaslin, county assessor, is responsible for estimating the market value for each property, which is then assigned a classification according to the property’s use. The goal is to distribute the property tax burden evenly and fairly.
The 2023 final budget and levy will be adopted by each taxing district this month. The proposed property tax statement received recently will reflect the preliminary numbers provided to the county auditor in September. These numbers can be lowered but not increased this month.
When a specific property owner finds either an increase or decrease in his statement, this may be due, in part to a levy increase, but not necessarily. Each property is required to be inspected on site at least once every five years by one of the four property appraisers in the county assessor’s office. Many are appraised from the exterior only; a more accurate appraisal includes an appraisal of the interior, if the owner allows an inside inspection.
A property is assessed each year based on like sales in each jurisdiction. The estimated market value or what the property may sell for in today’s market is determined by the county assessor.
Ostrander
Ostrander was physically reassessed in 2022. Ostrander is an example of a jurisdiction which has been brought back into compliance. it is not the only jurisdiction in the county which has had market adjustments to bring it back into compliance. Adjustments across the county range from 15% to 50%.
The state requires the county assessor to maintain a median sales ratio between 90% and 105% where there are six or more sales. Ostrander had a median sales ratio of 59.88%. If a jurisdiction is out of compliance, the State Board of Equalization will order changes to bring the jurisdiction into compliance. After the reassessment was complete, the median ratio was a compliant 92.52%. When valuations were brought into compliance in Ostrander, many property owners were upset when they opened their 2023 proposed property tax statement.
When a jurisdiction is brought into compliance, the total amount of tax collected does not change. There will be a “tax shift.” Property owners in the jurisdiction that was out of compliance will see increased estimated market values, which will require them to pay their fair share of the property tax burden (no more, no less). Also, other property classifications will likely see a decrease in their tax burden, even if the valuations of those properties remain the same, leaving the overall tax collected unchanged.
The estimated market value of each property is multiplied by the tax capacity percentage set by law for its classification, resulting in the tax capacity.
McCaslin, in his presentation before the Ostrander City Council, noted, “The primary reason Ostrander residents saw such a large increase in tax liability is because properties had not been picking up their fair share of the school district and county tax.”
Ostrander Mayor Pam Kunert said she didn’t get much satisfaction when she discussed the increased property values and taxes with McCaslin. She maintained that the increased tax, which in some cases doubled, will be difficult to pay for many elderly residents in Ostrander. Kunert made it clear that the increases were not due to increases in the city’s levy, which was unchanged from 2022.
Kunert said recent improvements including the water tower and improved sewage system were to be paid for through manageable increases in sewer and water rates, not the levy.
Ostrander residential estimated property values were increased in order to keep the jurisdiction in compliance as required by the state. The state offers programs including property tax refunds and also property tax deferrals for senior citizens to help property owners who may have difficulty paying their property taxes. For more information go to www.revenue.state.mn.us/property-tax-programs.
Countywide adjustments
Jurisdictions reassessed in 2022 saw both increases and decreases. Tillable land values increased by 9.5% (timber land values increased 52%). Agricultural property represents 62.1% of the total property value in the county. Residential property valuations increased 17.3% over the previous year. Residential properties represent 28.8% of the total property value. Commercial property value increased 2.6% over the previous year. Commercial property represents 3% of the total property value in the county. Apartment valuations decreased three tenths of a percent. Apartments represent six tenths of a percent of the county property value. Seasonal recreation property valuations increased 11.8%. Seasonal recreation property represents 1% of total county property value.
Over a five-year period, agricultural property total value in the county has decreased from 67.7% to the current 62.1%. Total residential property valuation has increased from 23.4% in 2018 to 28.8% in 2022.
McCaslin’s office has been working on a reassessment of all properties in the county, to identify those jurisdictions that are most out of compliance and to reassess them first. Appraisers will be continuing the reassessment of all taxable properties in Fillmore County.
Questions or contesting an evaluation
The appeals process begins toward the end of March. If a property owner wants to contest an estimated market valuation, contact the county assessor’s office to review the property and to explain the evaluation. Most questions and concerns can be answered at the assessor’s office. If not satisfied, the next step is to appeal to your Local Board of Appeal and Equalization (if applicable). If still not satisfied, appeal to the county Board of Appeal and Equalization, which meets in June, in person or by letter. Final steps are to appeal to the State Board of Equalization or Minnesota Tax Court.
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