Looking to ensure that all property is taxed fairly and equitably, the borough is considering a reassessment of all residential and commercial properties for next year’s tax bills.
The goal is for assessments to be consistent and “fair and equitable for everyone,” Borough Manager Jeff Good said last week.
It’s not about raising taxes, it’s to ensure that similar properties are assessed accordingly, he said.
Generally, the borough’s property assessor — a contractor from out of town — reviews the value assigned to about a third of the property in town each year. But despite that three-year cycle, some properties have not been reassessed in 10 years, Good said.
Property taxes are based on a percentage of assessed value. The borough assessor sets the value as of Jan. 1 each year for every residential and commercial structure and land in town, subject to appeal by the property owner, and then the borough assembly sets the tax rate.
This year’s total assessed value of all taxable commercial and residential property in Wrangell is $150 million. Property owned by the borough, state and federal governments, the SouthEast Alaska Regional Health Consortium, churches, some other nonprofits and senior-owned homes are exempt from taxes.
The borough this year is budgeted to take in $1.78 million in property taxes, the second-largest revenue source for Wrangell after sales taxes.
Good, who took over as borough manager last November, wrote in this year’s budget report it became apparent this year “that we need to conduct a city-wide assessment of all the properties for the 2023 property assessment cycle. This will allow us to correct disparities between like properties, while adequately adjusting property assessments to current values.”
State law requires municipalities to assess property as of Jan. 1 each year at the “full and true value,” which is defined as the “estimated price that the property would bring in an open market and under the then-prevailing market conditions.”
Alaska does not require property sellers or buyers to report the value of their transaction, unlike many states that require disclosure of the sales price. That lack of data “makes it tough on the assessors,” Good said.
Besides, not many sales occur in Wrangell each year, further limiting the information available on property values, he said.
Undertaking a reassessment of every property in town will be a large job, the manager said. He does not have a cost estimate. Assembly approval would be required for a contract for the work.
The contractor would be on a tight deadline to complete the work before assessment notices need to go out in the mail by March 20 next year.
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