RE: evaluation property tax regressivity
From: smarshall@co.patrick.va.us <smarshall@co.patrick.va.us>
Sent: Mon, Mar 3, 2025 at 6:39 am
To: Charles Vivier
Cc: Clayton Kendrick, Jr, Doug Perry, Jonathan Wood, Glennda Morse, Beth Simms
Dear Mr. Vivier
Thank you for your email, and please accept my apologies for the delayed response. I appreciate the time and effort youve taken to share your insights and raise important questions about the real estate tax assessment process. Your experience as a real estate broker and your understanding of the local market are invaluable, and I’m grateful for your input on this issue.
You are absolutely correct that the total anticipated annual revenue from real estate taxes is determined by the levy set, and I appreciate your clarification on the formula (Revenue = Levy Set × Total Assessments). However, the point I was making regarding the $1.5 million in potentially lost revenue is directly tied to the regressiveness of the current tax assessment.
When lower-value properties are assessed at rates higher than their fair market value, while higher-value properties are assessed at rates lower than their fair market value, it creates an inequitable distribution of the tax burden. This imbalance results in a wealth transfer from poorer to wealthier individuals, bypassing the county coffers. This wealth transfer is directly reflected in the loss of revenue.
In order to get an exact revenue loss number we would need to quantify the difference between assessed values and actual fair market values at the time of assessment. While the exact amount of revenue loss may be out of reach to us, the fact remains that there has been a significant loss.
While larger appraisal companies do have access to the advanced tools that can provide us with accurate benchmarks for the initial assessment, I do agree that an in-house assessor could offer a more tailored and accountable long-term solution for Patrick County. I have proposed to the board hiring a competent company to complete the initial assessment, ensuring reliable benchmarks, while simultaneously transitioning to an in-house assessor. This approach not only guarantees accuracy upfront but also establishes a sustainable, in-house solution that will keep assessments up to date and safeguard against lost revenue moving forward.
Your point about the timing of property purchases before a general reassessment is also well-taken. It underscores the importance of ensuring that assessments are as accurate and up-to-date as possible to avoid distortions in the market and ensure fairness for all property owners.
Once again, I apologize for the delay in responding, and I appreciate your patience. Your input is valued as we work toward a more equitable and effective tax assessment process for Patrick County.
Best regards,
Steve Marshall
Subject: evaluation property tax regressivity
From: Charles Vivier <vivier@swva.net>
Sent: Thu, May 9, 2024 at 3:32 pm
To: Steve Marshall
Cc: Clayton Kendrick, Jr, Doug Perry, Jonathan Wood, Glennda Morse, Beth Simms
Dear Mr. Marshall,
Since you are my supervisor, I kept the article / interview dated 25 October 2023 about you for the election. I agree with much of what you said and the importance of good general reassessments.
However you are quoted as saying “If we could find a (vendor) company to do our assessment where we could get a 10 score from the IAAO, we would realize at least $1.5 million more in revenue each year.”
That is an invalid conclusion. The total expected annual revenue from real estate taxes is dependent on the levy set, irregardless of good or bad or fair or unfair assessment values.
Revenue = Levy set x total Assessments or as you have already been made aware
(Revenue desired) divided by (total Assessments) = rate of Levy to be set annuallly.
The Equalization Rate of Levy is a discussion for another day. The subject comes up after a General Reassessment.
I sent an email dated 20 February 2024 to our local Commissioner of the Revenue and CC’d it to our supervisors. My questions have yet to be answered. Our next general reassessment could be underway in 2026 to be effective by 1 January 2027. The gist of some of my questions is should we again hire a vendor vs. establishing an in-house tax assessor.
I once found a listing of real estate transfers by year for Patrick County. I found the number for a particular year to be surprisingly low (maybe 400) compared to the number of existing parcels.
About 2000 I retired as a real estate broker practicing in Carroll and Patrick Counties. I can appreciate the difficulty of doing appraisals with low numbers of comparable sales data. It is my understanding that the bigger appraisal companies have access to purchase sophisticated programs and algorithms.
Appraisals really went ballistic here about 2008. We thought that the vendor was using comps from Roanoke and surrounding areas.
The Virginia Department of Taxation has some nice links starting with
dropping down to
and finally getting to
Notice on page 9 of 56 that in 2022 Patrick County had 366 sales for a Total Fair Market
Value of Real Estate of $1,612,665,500.00.
Beginning on page 12 of 56, there is a breakdown (by Class of property) giving the Ratio of 2022 Assessed Valuations to 2022 Selling Prices. The last column of each Table provides a Regression Index. That’s over my head. This link doesn’t help me: https://www.investopedia.com/terms/r/regression.asp
“What is a Regression ….”
In my opinion, the time to buy property would be just before the General Reassessment. Buyers tend to look at the tax assessed value (which might be six years old) as a basis for their offer. Buyers might do a comparison of “forsale” properties, but they don’t do sold comps; agents should.
Generally speaking, a sale price is irrelevant to the Commissioner when determining a tax ticket (for county revenue).
Best regards,
Charles