Wednesday, June 21, 2006

More anguish, more financial pain arrives in mail

The groans of pain and exclamations of outrage spreading throughout Blaine County (and elsewhere in Idaho) means that property assessments have arrived in the mail.

How many more years must property owners endure this annual sticker shock?

Idaho doesn't require real estate companies or property owners to report the sales price of property.

This forces county tax assessors to use unreliable guesswork to determine property values. As Blaine County Assessor Valdi Pace recently wrote in the Mountain Express, "New buyers consistently tell me they are told not to disclose to the assessor what they paid for their property, thereby making our job of fairness and equity a very difficult task to achieve."

Pace said she had the smallest sample of sales data last year on which to base assessments—just over 13 percent of market activity. Understandably, the county will be flooded with appeals from taxpayers howling about higher assessments.

One example: In Ketchum, a couple in their 70s learned the land on which their modest 1,800-square-foot home sits increased 50 percent in value. This underscores the inequity inherent in Idaho's tax system. Families that have no intention of selling their homes are victims of real estate speculation in their neighborhood—higher prices fetched by nearby homes that boost the assessments and taxes on their property.

The consequence has been families selling homes because they could no longer afford to pay the taxes.

Local businesses are also feeling the pinch of higher property assessments.

This creates turmoil in communities that have enjoyed social stability through families and individuals who took part in civic activities and voted, and businesses that enriched the area's character.

Now, in the place of year-round neighborhood populations, Ketchum, especially, is seeing the arrival of part-time residents who buy older homes, level them to build expensive vacation residences that boost taxes on neighbors, and who thereafter are caught in the same cycle.

Idaho's legislators have failed taxpayers miserably. They've heard the anguish; they've seen the disruption the tax system causes, and still haven't acted.

Lawmakers could easily help offset the need for higher taxes in growth communities by imposing a real estate transfer tax—a modest tax on property sales transactions that would go to county treasuries to offset higher taxes for permanent residents.

Buyers paying hefty prices for Blaine County property surely could afford a tax based on a small percentage of price.

How can legislators continue to ignore the unnecessary financial distress of families and tolerate the rending of communities?

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