Probably no one enjoys paying property taxes. It’s a big check, rather than a few dimes or dollars in sales taxes each time at the register.
But it’s an essential part of the municipal budget, second only to sales taxes in bringing in revenue to pay for schools, roads, police, fire and other services.
The tax is based on the value of property — whether commercial or residential, the tax rate is all the same. Cities and boroughs across Alaska send out assessment notices each year, telling property owners what their home, fourplex, warehouse, retail shop or other property is worth. City councils and borough assemblies then set the tax rate to match what the community needs to provide services.
In Wrangell, the rate is 12.75 mills, or 0.01275% on each $100,000 in assessed value. On a $250,000 home, that comes to $3,187.50 a year. On a million-dollar commercial shop, it would be $12,750 a year.
State law requires municipalities to assess property at the “full and true value,” which the statute defines as the “estimated price that the property would bring in an open market.”
The most important thing about property taxes is that they should be assessed fairly and equitably, which does not mean equally. Not all three-bedroom homes are worth the same on the market; some are in better condition, some have larger rooms or may have a garage, or a sun deck or be on a larger piece of land. An assessor is supposed to take all those variables into account and arrive at a fair-market value. That means an approach that treats all square feet, extra bathrooms, decks, garage and roof rot pretty much the same.
It’s not a perfect system, but it should be consistent and current, which takes constant work particularly in a tight housing market where values only go in one direction because of limited supply.
All of which are good reasons to support the borough in its effort to undertake a comprehensive review of all of the property assessments on the island. Though the assessor tries to review each piece of property every three years, some have gone years without a reassessment for taxable value. Which means the owner probably is underpaying taxes compared to neighbors with a current valuation.
There will be a cost to paying a contract assessor to review the file for every parcel and building in town, maybe even inspect some of them in person, and it will take a lot of work to get it all done before assessment notices for 2023 taxes need to go out in the mail before March 20.
Despite the cost and work, it’s the fair thing to do. Fair so that every property owner pays taxes by the same standards.
— Wrangell Sentinel
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