Property tax appeals jump in Duluth and the Northland
It’s an annual rite of spring: getting your property tax statements, which were sent out in the mail last week. But this year, property owners can be forgiven if they still have the winter blues, as levy increases and the loss of the homestead credit have pumped taxes up.
- Property tax refunds
- Property value appeals
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It’s an annual rite of spring: getting your property tax statements, which were sent out in the mail last week. But this year, property owners can be forgiven if they still have the winter blues, as levy increases and the loss of the homestead credit have pumped taxes up.
“We’re hearing anywhere from 13 to 15 percent,” said Duluth City Assessor Gregg Swartwoudt. “It’s a substantial increase.”
If you’re unhappy with how much you have to pay, you can be one of the hundreds of other city and county residents who have successfully fought to have their property values lowered by a combined $117 million since 2007, while other residents have gotten refunds of about $2.2 million since that time, records provided to the News Tribune show.
Whether you’ll be successful in lowering your property value or getting a refund might depend on whether you live in the city or the county.
The number of cases filed against the city of Duluth in tax court — where property owners can get a refund if they prove their assessments were too high — has gone from 26 in 2008 to 74 in 2011. The county has seen its cases go from 10 to 19 during the same time.
Statewide, 5,120 cases were filed in tax court in 2011, more than double the cases filed in 2007, according to state records.
“This seems to be due to the decline of the economy,” Swartwoudt said. “People think: The economy has gotten worse, therefore I should be paying lower taxes.
“Tax court petitions are often filed as a means of dealing with your budget,” he added.
The majority of the increase in tax court cases is from commercial property owners, said Barb Russ, an assistant St. Louis County attorney who handles the cases for both the city and county.
“I think it’s people perceiving that their values have likely dropped, and business owners being more on top of that sort of thing,” she said. “Let’s say it’s a big-box store challenging their assessment. They could see a substantial amount of money.”
The number of tax court cases filed against the city is triple that of the county, even though the county has about twice as many properties as the city.
St. Louis County public records and property valuation director Mark Monacelli said he believes the city too easily seeks to compromise on its cases.
“The unofficial word on the street is that if you send in a petition, the city lacks the resources to investigate it and therefore they’ll settle,” Monacelli said. “The county takes a more proactive role. We have the resources to do the investigations on a case.”
Bill Burns, a Duluth attorney who has filed numerous tax cases over the last several years, said he doesn’t believe that’s true.
“(Duluth) is where the majority of commercial and residential development have occurred,” Burns said. “The job of the assessor is not to resist adjusting people’s property values, it’s to make sure they’re equalized.”
Swartwoudt also said he disagreed with Monacelli’s statement, saying the city gets more tax court cases because it has more high-valued commercial and industrial properties. The average value of commercial property in the city is 2½ times greater than the county’s.
“So obviously any errors made or anything over-assessments will be compounded,” Swartwoudt said.
He also said the city is more assertive than the county in trying to accurately value properties.
“I think the county is under-assessing properties,” he said. “If you’re under-assessed, nobody’s ever going to question anything.”
Monacelli responded by saying that the county’s ratio of property evaluations to sales, which is used as the overall barometer to determine if a jurisdiction is being fairly assessed, is in line with state laws — as is the city’s.
The difference between the city and county isn’t unique to tax court cases. It can also be seen in actions taken by local Boards of Appeal and Equalization, which have the power to reduce property values, and is the option most often chosen by homeowners.
The city has seen $70 million in reduced property values through Board of Appeals actions since 2007, where the county has seen $50 million.
“Our intention is to make sure properties aren’t over-assessed,” Swartwoudt said. “If we agree that a value needs to be lowered, then what we have is the fair and equal thing.”
While about 70 percent of city petitioners get their values lowered, in the county that number is 40 percent.
But those numbers don’t tell the whole story, Swartwoudt said. He estimated that about 90 percent of the calls he gets are usually dismissed: Either they accept the explanation for why their tax bill has been raised, or they refuse to let an assessor onto their property to have it revalued as required by law.
With tax statements being sent out last week, Swartwoudt said his office is usually flooded with those calls this time of year.
“This year it’s not nearly as bad as we thought,” he said.
But it’s not over yet.
“Generally people talk about it over the weekend and vent,” he said.
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