Douglas County homeowners should see smaller increases in the value of their property this year. It's too early to say how that will translate to tax bills, though.
County commissioners Monday were told that slower growth in property values could squeeze an already tight county budget.
Douglas County Appraiser Marion Johnson told commissioners that most residential property owners should see their property valuations increase by 5 percent in 2002, compared with average increases from 6 percent to 8 percent the past two years.
Johnson said a weakening economy and the Sept. 11 attacks, persuaded him to be more conservative in setting property values, though actual home sales prices haven't shown decline.
"We had to start setting values around Nov. 1, and at that time there was a lot of uncertainty in the marketplace both locally and nationally," Johnson said. "I talked to people knowledgeable about the local real estate market, and they saw a bit of a slowdown coming. The numbers don't really show there has been, but it's too late now to change from our approach."
Valuations are only a part of the formula that determines how much property owners will pay in property taxes. The other part is the mill levy set by local elected officials. Property tax bills may still go up considerably if county, city and school district officials increase their mill levies in response to tight budgets.
Monday's news from Johnson may make those budgets slightly tighter. Historically, the county has seen its overall property tax base grow by about 12 percent per year. This year the tax base is projected to grow by about 9.5 percent from a year ago. About 4.5 percent of that increase comes from new construction in the county, Johnson said.
County officials said the end result would be less new money to spend on increasing county needs.
"It doesn't make the budget situation much worse, but it doesn't make it any better," said County Administrator Craig Weinaug.
County officials also fear a slowdown in sales tax revenues and cutbacks in state aid to local government programs.
County Commissioner Bob Johnson said Monday's news increases likelihood the county will deny funding requests from many departments seeking additional funding.
"I think this news will be a bump in the road because there won't be any appetite in increasing the mill levy," Bob Johnson said. "So that means we'll just have to limit our expenditures even more."
"I think Marion made absolutely the right decision in being a little conservative this year," said County Commissioner Charles Jones. "Nobody knows ultimately how Sept. 11 will impact the economy, but I think it was reasonable to assume it could have some adverse impacts."
This year's lower property values may mean that the appraiser's office will have to make larger increases in 2003 to make up for underestimating this year's values.
Marion Johnson said current sales data show values continue to rise between 7 percent to 10 percent on average. If that trend continues, state guidelines will pressure Johnson to make up the difference in 2003.
Commercial property also is expected to see valuation increases of 5 percent or less, Johnson said. Agriculture values, which are set by the state, also have been received by the appraiser's office. Cropland will increase by approximately 3 percent, while hay and pasture ground will increase 6 percent on average.