Friday’s deadline to appeal property tax valuations in Baldwin County appeared to attract an average number of applicants, Revenue Commissioner Teddy Faust said last week. In recent years, there has been an average of about 1,500 appeals for the roughly 150,000 parcels in Baldwin County, down from a high of 22,000 appeals in 2007.
That situation, Faust said, compelled him to run for office.
“Back then what happened was the assessor raised the property values significantly because the [Alabama] Department of Revenue told him he needed to get in compliance, and when he did everything broke loose and went crazy,” Faust recalled, mentioning how the market was affected by Hurricane Katrina in 2005 and the subprime mortgage crisis of 2006.
“The balloon popped basically … after that it took a couple more years for Baldwin to realize it, but we had a huge influx of people from Louisiana and Mississippi who bought up a lot of real estate. So around 2007 is when we really started seeing the foreclosures and the property values starting to decline, so when they went down, we went down with them.”
But more recently, Faust said, “we have a tremendous amount of growth” and valuations have been trending upward for the past four to five years. The growth has translated into a larger tax base for the county, with Faust providing an example of a 40-acre parcel of farmland that may generate a $150 tax bill.
“Fully developed, that tract of land would probably produce in excess of $100,000 of property tax,” he said.
A review of specific subdivisions comparing the pre-subdivision tax to the after-development tax in 2018 indicates the 80 acres comprising the Bellaton neighborhood in Daphne was assessed for $173.04 in 2004, but 159 lots developed there afterward were assessed for $288,490.70 last year. Similarly, the 39-acre property that became the Nature’s Trail neighborhood in Fairhope was assessed for $1,186.84 in 2012 but in 2018, the 58 lots there generated $58,344.75 for the county.
The same scenario has played out dozens of times across the county in recent years, as developers continue to turn large tracts of formerly vacant land into subdivisions, strip malls, entertainment complexes, condos and more. All told, the county listed $20 million in ad valorem tax collections for the general fund in 2018, an 18-percent increase since 2015.
Chief Appraiser Walt Lindsey said generally, appeals of valuation notices are motivated by surprisingly active market forces driving values up or improvements made to properties that haven’t been noted by the Revenue Department since the last time a property may have been inspected, four or five years prior.
“Overall we’re about the same as we’ve been for the last few years,” he said of the number of appeals. “We think we’ll end up with 1,500 out of the 150,000 parcels we have, and we think that is pretty good, a relatively small number. Ten years ago we cut it down from 7,000. They have been decreasing, and then held at 1,000 to 1,800 for the last several years, so we don’t see anything unusual.”
The Baldwin County Revenue Commission assesses most residential property using the standard cost approach, which adds the value of the land and the costs of any improvements, less depreciation. Most properties are on a rotation to be visited by an appraiser every four or five years, but in lieu of individual physical inspections, the department also relies on aerial photography.
Each parcel is also assigned a “property report card” (PRC), indicating the values and how the department arrived at the assessment.
“Generally, the reason we have appeals is the regular growth of people moving in and there is a market force in affect, but the other thing is we review one-fourth of the parcels in the county every year — sometimes we don’t get to all of them but we’re usually pretty close — and at that point we will either correct errors we have on a parcel or we’ll pick up new improvements that have been built — add-ons, swimming pools, barns, whatever. They may have been on the parcel since our last review four or five years ago, but we haven’t picked them up to charge taxes on them, so we get additional value there.”
Most commercial properties — including hotels, apartments, shopping centers, self storage and other uses — are valued using the income approach. In some cases, the property owners provide specific income and expense figures from the property, while others are valued using comparable data from similar properties.
Condos are valued using the market approach.
“It looks at what similar properties are selling for,” Faust said. “Condos are relatively easy because they are all the same in any given tower in terms of square footage and what-not.”
Unusually large increases in assessments can indicate the loss of an exemption, Lindsey said, and they can usually be reversed or resolved in communications with the property owner. Alternately, those that have filed appeals should expect a notice in the mail the second week in June setting a date for an informal hearing with an appraiser. There, about half of all appeals are resolved by comparing data. The remaining half are forwarded to the county’s three-member Board of Equalization where, surprisingly, “less than 30” of the appellants showed up for formal hearings last year, Lindsey said.
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