The borough assembly and staff spent a fair amount of time at last week’s assembly meeting, explaining the intent of a contract with an appraisal firm to reassess the value of all the property in town. Homes, businesses, industrial properties, empty lots — they will all get a new look to make sure the borough’s valuation is fair.
This is about treating property owners equitably.
It’s also about following state law, which requires that cities and boroughs assess property “at its full and true value.”
This is not about raising taxes, though several assembly members said they have heard complaints from residents who believe otherwise.
The borough manager discovered soon after starting the job late last year that property valuations around town are inconsistent, that similar homes might be assessed at significantly different values. And although the borough’s long-held intent had been to update assessments every three years, some properties have been stuck in time at the same assessment for 20 years.
None of which meets the requirement in state law for “full and true value.”
The solution is to have the borough’s contract assessor look at every file for every piece of property, check out the ones that need new information for the file, drive by some as needed, and prepare an updated valuation for everything in Wrangell.
Under the law, property owners will be able to appeal their assessments to a borough review panel.
It’s likely that the new assessments will be higher for many of the homes, businesses and pieces of land in town. Housing and land prices have gone up, not down, in recent years. But that doesn’t necessarily mean property taxes will increase.
After the new assessments are in the system, the borough will look at its spending plan for the fiscal year that starts July 1. How much should the borough contribute to school district operating expenses? What’s the cost of fuel for heating buildings? The cost of employee health insurance? The budget for Parks and Recreation, the Nolan Center and the police?
After adding up expenses, seeing what is available from state and federal sources and how much the borough expects in sales tax revenues, the assembly will set the property tax rate, also known as the mill rate — which has nothing to do with a sawmill but is the tax rate per $1,000 in assessed value.
The current mill rate for most of the borough is 12.75, or, for example, $2,550 on a $200,000 home.
If assessments increase and the assembly decides the borough can function just fine with the same property tax revenue this year, then the tax rate could decrease so that overall tax collections do not change. If the borough needs more money, such as to repay bonds for repairs to school buildings, the tax rate could increase.
The borough is doing the right thing to reassess all the property in town to ensure people are taxed fairly. The actual tax rate will be set next spring as part of the budget. It’s a two-step process.
— Wrangell Sentinel
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