The Telegraph Herald reported last week that property assessments in Dubuque County are out of whack now.
That’s not what those in the industry — even experienced assessors — would have predicted. Amid a pandemic, who would have guessed local properties would be selling for prices well above their assessed value?
But in fact, sales have been soaring, pushing purchase prices outside the range the state deems acceptable. That means assessments will have to rise to more accurately reflect property values.
Generally, when your property goes up in value, that’s a good thing. When it’s time to sell, the higher the price is above what was paid when the property was acquired, the more gain. Buy low and sell high and all that.
However, there are some factors that temper the positive developments of higher property values. Most involve taxes. Taxes on proceeds of a sale, for one thing. And even when the property doesn’t change hands, a rise in assessed value can have an impact on property taxes — and that’s what tends to get residents bending assessors’ ears.
But an increase in assessments doesn’t have to mean a hike in property taxes. And as citizens continue to endure this pandemic, government entities should do their part to keep taxes in check.
Assessed values might be rising due to market forces — the law of supply and demand — but that doesn’t mean property taxes have to climb as well.
Sometimes when assessed values increase, local governments keep the tax rate the same and allow increased valuations to power an increase in tax bills. The explanation is simple: “Gee, we kept the tax rate the same.” They can take that defense all the way to the bank.
But in this scenario, taxing entities — cities, counties, school districts, community colleges — all get more in taxpayer money because property owners are now paying that same rate on a more expensive piece of property.
This year, that could be particularly painful. The impacts of the COVID-19 pandemic have been far and wide among community residents. Some have seen their livelihood dramatically diminished or cut off completely. Many have endured health problems. Others have lost loved ones.
From schools to workplaces to family life, the past year has brought numerous challenges to area residents, many of those financial.
Taxing bodies must weigh the burden that local residents are carrying before they check the “status quo” box on property tax rates, knowing that ultimately will result in a financial setback to homeowners.
In the city of Dubuque, assessment increases are expected to range from 7.4% to 12.4%, while in Dubuque County outside of the city, the plan is to increase the overall assessed values by 8.2%, though that does not mean a uniform, across-the-board increase.
Taxing bodies can help offset the jump, regardless of its size, by lowering the tax rate this year.
That’s not to suggest rates should be lowered to the point that city, counties and schools have to decrease services because of a revenue hit. Rather, taxing bodies should strike the balance so that the amount of taxes paid by residents and received by government remains the same as the previous year.
Local residents, businesses, cities, counties and schools all have been dealt a blow with the pandemic. With assessments going up, we expect government to adjust tax rates accordingly so property owners don’t have to shoulder this burden on their own.