Lisbon's Revaluation Nightmares Have Only Just Begun

AS HOUSE VALUES FALL, WHY DON’T TAXES

It would appear there is a deep discrepancy between the “assessed value” and the “fair market value” of property.  Please read the below listed article which tries to explain why this occurs.  

http://www.pressherald.com/news/homeowners-ask_2012-01-02.html

One of the most critical points brought out in the article is “More importantly, when municipalities do lower assessments, property owners see little change in their tax bills because towns and cities simply raise the tax rate to cover the cost of running local government.  The only real way to reduce municipal budgets or tax bills is to reduce spending on police, schools or other public services.”   According to Dave Ledew, director of the state’s Property Tax Division, “If you roll back property values for everybody by 10 percent, it shouldn’t change their tax bills.”

Maine Revenue Services uses two methods to test whether property assessments – and the tax bills they generate are valid and fair.

(1)    The assessment ratio compares the average value with the average sale price of all homes sold during a specific.  Under state law, a town’s assessment should not be more than 10 percent higher or 30 percent lower than average sale prices.

(2)    The quality rating-determines the percentage of individual properties in a town that deviate from the assessment ratio.  That number should not fall below 20 percent.

Maine Revenue Services provides minimal oversight given state laws that set market-related assessment standards but impose few or no penalties.  As a result, some municipalities view the standards as guidelines rather than requirements.  While the state’s Property Tax Division encourages municipalities to do regular town wide revaluations to keep assessments current, the process can cost more than $300,000 and take one to two years to complete.  As a result, many towns now make incremental adjustments or do in-house revaluations.  Special software allows assessors to keep track of sales and building permits, make changes to individual property assessment and adjust values on similar properties accordingly.

Lisbon could have opted to have an in-house revaluation or incremental adjustments instead of a full blown revaluation saving the taxpayers a great deal of money.   But instead, this town council decided to spend $80,000 per year for four years, if my memory serves me right.  Why is Lisbon shooting themselves in the foot?  Lisbon needs to find ways to cut spending and lower the operating cost.  The secret to reducing taxes is to reduce spending.  There is no other magical spell for reducing taxes.  

 Lisbon's Town Manager

(Editorial note: He doesn't even live in town so why should he care about lowering taxes?????  Think About It!!!!!)

The article answers a lot of questions and provides excellent education into the process utilized but never answered the original question.  When property values fall; why don’t taxes fall?  The real answer is because the town’s operating costs have to be paid somehow and the only method available to towns and cities is through taxation.  Yours taxes are really not determined by your property value but instead it is based on the operating cost of the town or city.   This article outlines the methods town and cities utilize to cover their operating costs.  Lisbon taxpayers are in for a rude awakening comes this August/September. 

Now is the time to come to Town Council meetings and workshops demanding this council reduce operational costs in order to keep taxes as high as they already are or even demand for a tax reduction.  Remember, you cannot speak at workshops but you can witness which of the councilors are trying to help and which ones are trying to increase spending.

DO IT NOW BEFORE IT IS TOO LATE.  DO NOT BOTHER TO SHOW UP WHEN YOU GET YOUR TAX BILLS BECAUSE IT WILL BE TOO LATE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Larry Fillmore
Concerned Citizen