Assessor explains property values and taxes

By Molly Moser

Many Guttenberg homeowners recently received a shock when semi-annual property tax notices arrived in mailboxes earlier this month. The Press reached out to Clayton County Assessor Andy Loan to shed light on the big changes some have seen in their bills. “I think there are a lot of misconceptions about the property tax system. There are many factors and influences at the state and local level that go into a property tax that make it difficult to understand,” Loan told The Press. 

“Clayton County is not an easy county to maintain assessments or property taxes in,” said Loan, citing diverse topography which creates flooding in some areas and spectacular views in others, as well as a mix of large industrial and small commercial companies, and a large rural residential influence mixed with small and large agricultural parcels. The county also contains seven school districts, 18 incorporated towns, and 22 townships. “This creates a lot of burden on the property tax system to maintain the county roads, schools, and cities. That’s why it’s important to consider the county as a whole, and not just a school or town.”

Assessments are done annually, but during the 2016 assessment, residential properties were re-appraised, or relisted. This was the first relisting since 1968, causing some homeowners to see large changes in values countywide.  

For the reappraisal, all properties county-wide were checked during a 12-month period. Land values were then set based on the current market value of vacant lots and normal sales, and a replacement value for new construction was determined based on the Iowa cost manual, used statewide. Depreciation tables were updated to reflect age and conditions. Then the new assessed values were compared to properties in the town that have sold over the past several years. 

“A map factor for that town or township is adjusted up or down by a percentage until the sales match the assessments at their closest point. That is mass appraisal, and that was done for each town separately – nothing to do with Cedar Rapids or any other influences outside of Clayton County,” said Loan. “The main goal is to create a better current equity than what we had. So far we’re seeing that in the sales. Our sales ratios are much more consistent for similar properties in the county.”

Clayton County’s assessments had been inaccurate for some time, according to Loan, and the sales were reflecting the inaccuracies prior to the relisting.  “We are staffed to be able to maintain the new construction, deconstruction and sales checks in the county.  A typical assessment office is not staffed to handle a relisting of their county,” Loan explained. Clayton County staff maintains five classes of property and 28,000 total parcels. During odd years, state officials check the county’s work. “Our sales during 2016 for residential averaged right at 99 percent, which means the work we did for the 2016 assessment was very accurate county-wide.”

Value changes in the overall market for a specific class of property will cause property values to change, as will new construction or deconstruction. “It’s important to keep an eye on how property is selling in a taxing district. We compare the sale of a property to its assessment, which is referred to as a sales ratio. These sales ratios develop an average that indicates which way a jurisdiction’s value will move,” Loan explained.   

“It’s also important to note that we maintain the assessments and do not do the taxes. Taxes are created by the budgeting entities that collect the tax money,” Loan reminded readers. School levy rates, like the one recently updated by vote in Guttenberg, are just one part of taxes, as are city and county rates. While the overall school levy rate went down slightly following the PPEL vote, the amount property owners pay for the school levy on their taxes will change if their property values increased or decreased.

“There are many taxing districts that affect the overall levy rate. Each tax statement shows the dollar amount that property is contributing to each taxing district,” said Loan. “For example, a school could increase their levy rate by 50¢ at the same time the county could lower their levy rate by 50¢. The taxable value within a jurisdiction is divided by the budget, or asking amount, from that jurisdiction to create the levy rate. So a taxing body’s budget is what creates the taxes. The assessment process could actually cut all assessments in half and if the taxing body's budgets don’t change, then the levy rate will just double. That’s why we can't just increase assessments to increase taxes.”

Ultimately, said the assessor, good taxable value growth and new construction within the taxing districts helps create an overall lower levy rate. 

The Clayton County Treasurer has issued a reminder that Sept. 30 is the property tax payment deadline. Penalties will attach Oct. 2.

Payment made be made at the Treasurer's office in Elkader or by mail; at the driver's license station in Elkader, or online at IowaTaxAndTags.gov.