Jackson County, OR Assessor Explains Property Tax

Jackson County Assessor Josh Gibson

The Rogue Valley Association of Realtors sits down with Josh Gibson, the Jackson County, Oregon Assessor. Josh explains the property tax system and how to handle complaints;

Rogue Valley Realtors:  Josh Gibson is here today visiting with us, the Rogue Valley Association of Realtors. He’s the county assessor and we appreciate Josh for being here today to meet with us and have a hopefully informative discussion about some of the concerns that we may have here in the association, and to get to know you a little bit better as well, so welcome.

Josh Gibson: Thanks for having me.

Rogue Valley Realtors: Thank you. Why don’t you give us a broad overview of what your department’s responsibilities are and what your rules are, then  we can follow up with some other questions.

Josh Gibson: Our main duty is to have a complete appraisal on all properties in the county, and to determine the fair market value of them. And what ever values those come may trigger new taxes, so basically we’re doing an appraisal to get a fair market value for tax purposes.

Rogue Valley Realtors:  Some folks, including me have a hard time remembering what terms and phrases mean, sometimes we talk about the appraised value, the real market value, or market value, can you explain the differences between assessed value and market value?

Josh Gibson: Yes. There is three main acronyms we use; “Real Market Value” (RMV) is what you would your house or property for on January 1st of that tax year. Your “Maximum Assess Value” could have been when measure 50 was passed in 1997, or if you’ve built on since then, it triggers new taxes. Your maximum assess value is kind of like your ceiling in which your taxes are based. Then you have “Assessed Value”, which is either the lower of your real market value or your maximum assess value, which was never really an issue until the Bubble Burst.About three or four years of continuous declines in real market value, until that real market value finally fell below that ceiling. 

Rogue Valley Realtors:  And what happens as that point? What happens to the assessed value?

Josh Gibson: Your taxes get reduced at that point, because it’s based on the lower value. However, your ceiling is still up here. Your real market value could be here (lower). If at some point that real market value is a percentage lower than your maximum assess value that MAV freezes. But as real market values are starting to pick back up, and let’s say the real market value is above the maximum assess value, now the maximum assess value grows by 3% again.

Rogue Valley Realtors:  Okay, I understand. Do you see a relationship between the work that you and your office does, and the real estate industry?

Josh Gibson: It’s a direct correlation, because you guys are trying to sell houses. Fee appraisers are trying to appraise basically the same way we are, we’re trying to get to that fair market value. However a fee appraiser can pick from four, five, six, seven different comps, where we have to base ours on entire cities.

Let’s take East Medford; It’s a maintenance area, we got seven of those in the county. Inside those maintenance areas we have study areas. Those are broken down by what we see as like neighborhoods, like subdivisions or different areas. So say like multifamily, condos or townhomes have their own study area. 

We have an appraisal on properties and we trend those every year by the sales that occur in that study area. Lets take townhomes in East Medford; We have to trend the townhomes in East Medford by probably 250, but only 10 sold. So we have to base those trends of those 250 by those 10 sales. So we’re doing it in more in mass than a fee appraiser, but there is a direct correlation between everything that we do.

Rogue Valley Realtors:  So that helps establish a basis for discussing what the negotiated price would be on a transaction, right? and number 2; it gives the perspective to buyers the idea of what property taxes are going to be, that’s an important piece of information in any transaction; What are my ongoing taxes going to be?

You talk about measuring in large areas and by groups, do you see areas in our county where there’s much more volatility than other areas in the county, or by property use type? 

Josh Gibson: It goes by area and by property use type. Condos are still getting hit hard after the bubble-

Rogue Valley Realtors:  Hard meaning their values are going down?

Josh Gibson: Yes, continuing to decrease. Even with last year (2013) when the majority of the properties had either stabilized in value or were starting to go up, condos were still going down by about 15% compared to 2012.

The areas like Eagle Point, Central Point, White City, the areas hit hard by foreclosures, now that the banks have less of a role to play. You know, they kind of got out of the business a little bit, you see those values starting to creep up again. So those are probably the main volatile areas.

Rogue Valley Realtors: So Eagle Point areas is one of the targets, I’ve heard historically Ashland was more volatile as well, is that still the case?

Josh Gibson: They [Ashland] have a stronger real estate market than anywhere else in the county. So where the bubble really started to drop for the rest of the county, Ashland still stayed strong for a couple more years, then started to drop. They’ve seen the same kind of drop, but their medium price is still higher than the rest of the county. They were always stronger and now their growth is starting to show.

Rogue Valley Realtors: So less volatile, less than the Eagle Point area where you see, historically, rapidly increase in valuation.

Josh Gibson: The most of Ashland, probably on the average 5-6% increase over the last year, where Shady Cove, Eagle Point, those areas grew by 14-16%.

Rogue Valley Realtors: Thank you for that explanation, because I always wonder about these things and I don’t have a lot of exposure to it. Measure 50 was the demarcation for establishing a maximum increase in property taxes per year, I think it’s at 3%.

Josh Gibson: Yes.

Rogue Valley Realtors: So you’ve just explained that when property values go down, according to your figures, the property taxes would go down, but then once they come back to the historic level, the measure 50 level, then they could increase only by the 3% above that. 

Josh Gibson: Yes, so where we saw probably 15% of the properties this year, where they have saved over the last two or three years because the real market value has dropped below the ceiling.

I sent out a flier with all the tax statements, and I used one of the Eagle Point properties; Where the last two years they have seen an 8% drop in taxes. Then all of a sudden you have a 14% increase in real market value. So it can grow that gap of 8% until it hits that ceiling, and then it starts growing. So you don’t have that 3% growth in the maximum assess value, however the taxes grow by 8%, because they were below that ceiling. 

Rogue Valley Realtors: I can imagine that some folks may have been surprised by such a large increase in one year. What would be the process if a property owner wanted to challenge and dispute the tax being imposed?

Josh Gibson: Once the tax bills go out we start getting phone calls and foot traffic. The proponent of evidence is on the shoulders of the property owner. They have to look at the listings, sales prices, if they have an appraisal, bring those in. We’ll look at the information they have and look at the sales that we have as well. We look at every sale in the county as it’s occures, so basically we’re looking at the same amount of evidence.

We’ll either say; “yeah, we’re to high”, or “we believe by these sales and these comps, we’re going to sustain our value”. However, as we get closer to December 31st, which is the appeal filing deadline, we advise people to file an appeal. That kind of extends their rights into next year, when they can go through the process and go in front of the board of property tax appeals. They can have their voice heard there (AND HERE!), at least to an independent board. They start meeting the middle of February, but even between January 1st and the middle of February, we can still come up to a stipulated agreement, if we agree that the value needs to be changed.

As we get to the end of the year, it’s harder for us to do more research, and to come with a good estimate of value, and it extends their rights so they don’t get left in court.

Rogue Valley Realtors: Right. Are you familiar with surcharges?

Josh Gibson: Yes.

Rogue Valley Realtors: Local governments in Oregon have gotten into the ‘habit’, if you will, of imposing surcharges, which appear as an additional charge on utility bills. Water and sewer bills now have line items added to them called surcharges, and those surcharges are to pay for local government services, in some cases capital improvements that we’re seeing now. What’s your opinion about surcharges?

Josh Gibson: Well, my personal opinion is; I live in the City of Medford, so I have seen the surcharges on my utility bill, or at least I don’t know if they’ve come yet, but I know they’re coming. I see it as a fee, or a tax disguised as a fee, and I believe that if a money measure, especially of that magnitude, needs to go in front of the voters. If the citizens want it in, then it should be voted in. If they don’t want it in, government needs to figure out a different way to provide those services or improvements.

We’re always looking at Josephine County. They’re in a much worst situation than we are. My chief appraiser said; “Well, if you take away the services, eventually if those services are needed, they will be voted in”. And I think the power needs to be in the people when it comes to something of that magnitude. 

Rogue Valley Realtors: We were talking about property taxes being an important factor in a decision for a property transaction. For a buyer, you want to know what the property taxes are. Historically, property taxes have been used to provide general fund money to local governments to fund those basic services. Now, with surcharges being imposed separately, the prospective buyers are not going to have a full picture of what the full amount of money is going to cost them each year. Do you agree with that statement?

Josh Gibson: I do. 

Rogue Valley Realtors: And maybe something that could and should be disclosed during a property transaction, so thanks for the explanation, we appreciate your opinion on that because it is a growing trend and we’re seeing surcharges being imposed now for capital projects, major construction projects and not just services.

There has been some discussion recently, within the last year and probably working it’s way through the legislature. I’m not sure where it’s at now, but there was some talk about eliminating the discount program that you offer if you pay your property taxes by November 15th, you get a 3% discount. It has been purposed to eliminate your option to give the discount. Do you have an opinion on that?

Josh Gibson: I think it should stay. The county is basically the tax collector for all the jurisdictions. They need to be able to get the money out to every tax district and it’s an added benefit to get that money in time. Usually you either get taxes wrapped in your mortgage or you pay either your three installments or upfront to get your 3%, the mortgage is usually going to get the 3% because the banks don’t want 3% more on the taxes. Those individual people that have decided to pay it all in one lump sum a month and a half before Christmas, it’s just one of those added benefits that should stay. 

Rogue Valley Realtors: You’re providing a service to local governments. As part of that, do you charge those local governments a fee for doing work for that? How much is it and what is it used for?

Josh Gibson: No. There’s been talks at the legislature to try to get it. Jackson County in a lot better shape than a lot of other southwest counties.  You know; Curry County, Josephine, Douglas is in a little bit of trouble. [The legislature is] trying to get as much as 2% back from the taxing districts as an administrative fee, but I don’t think it’s got a lot of tread. I don’t think it’s going anywhere anytime soon. 

Rogue Valley Realtors: There has also been some talk about upon sale of a property to reset the property tax, the assess valuation at that point. Have you heard of that?

Josh Gibson: Yes, and I don’t think it would be a very good solutions because we’re trying to get to this fair and equal, everybody pays the same amount of tax, where right now one house right next to another has completely different taxes and that’s not fair. I think this reset of sale would further that inequity.

What really needs to happen is a group of all invested citizens, cities, school districts, governments need to come to the table and figure out a solution to rewrite measure 50. The problem is they come up with little solutions here and there that might change ten or a hundred properties, but they screw up another 10,000. So they try to put little bandaids on it.

If you’re going to do it, take a look at the whole thing and get it fixed.

Rogue Valley Realtors: Understand. Well Josh, we appreciate you spending some time with us today and it’s been helpful to me as an individual and helpful to the association, I hope those watching will get an equal amount of value out of it and thank you very much.