June 01 2017 Newsletter (888) 516 9594
Part 2:  Assessing the Impact of Property Tax Appeals on Your Community

In a recent edition, I discussed the impact property assessment appeals using the “dark store” theory can have on your tax base, tax rate, potential to increase tax cap losses and even reduce the revenues from a TIF area. In this edition I’ll look at the concept of market segmentation and provide you options to mitigate or evaluate property tax appeals.

During its 2016 session the General Assembly directed the Department of Local Government Finance to create new assessment rules requiring properties be evaluated and assessed based upon their market segments. In other words, comparable property cited for an assessment must be in the same market or submarket as the property being evaluated. Details for the new DLGF market segmentation rule are expected soon (or synopsis of the rule if released in time.)

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Do You Have a CCD Fund?

If not, you may have noticed a reduced levy for 2017.

Beginning in 2017 the Cumulative Capital Development (“CCD”) fund will be the only cumulative fund that will be allowed an adjustment outside the maximum levy limit. Before legislation passed in early 2016, taxing units were given a positive adjustment to the maximum levy for a CCD fund. In other words, a taxing unit with an existing CCD fund could generate additional property tax above the maximum levy limit. Taxing units without a CCD fund were also eligible for a positive adjustment to the maximum levy if it had other cumulative funds, but the adjustment was typically less than what could have been with a CCD fund.

2016 Legislation Removed Adjustment

New legislation removed the adjustment for all other cumulative funds except CCD. This is not an issue for those that currently have CCD funds. However, taxing units that do not have an existing CCD fund can no longer generate property tax above the maximum levy for the other cumulative funds. How do you keep that ability?

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