By Thomas Harding    

Each New Year the Jefferson County Assessor sends notices to local property owners informing them of any increase in their real estate assessments. This year’s letters have been mailed, and they bring with them good news for most homeowners. Of the 30,000 parcels in the county, only 800 will see an assessment increase this year. The vast majority, perhaps as much as 80 percent, will see a dramatic decrease.

 Angie Banks, in her second year as assessor, says it has been a tough few months. “It has been a lot of work,” she said. “Some neighborhoods have seen many sales. Our assessors have found it shocking to see how much prices have come down in some of the communities.”

Banks says that the average drop in home value countywide was about 17 percent. Moreover, 171 of the county’s 222 neighborhoods saw a reduction in property assessments. The top three communities with the most reductions in values were Spruce Hills, Deerfield, and Mission Ridge, where homes values have dropped by more than 30 percent since a year ago.

The 2009 assessments are determined by comparing homes to properties that sold between July 1, 2008 and June 30, 2009. Banks said she expected continued falls in property assessments next year, given the data she has seen in the local real estate market.

What is the biggest reason for the drop in assessed values? For the first time, the assessor’s office has included foreclosures and short sales in their evaluations. This is a dramatic shift from previous years when staff refused to permit the inclusion of foreclosures, arguing that they were ‘distressed sales,’ and therefore not good comparables. This change in policy follows new instructions from the West Virginia State Tax Department, which has for the first time advised county governments that they can include foreclosures in their assessments in markets where foreclosures dominate the market—as is the case in Jefferson County.

“We were always told in the past not to use foreclosures,” said Angie Banks. “But now most of our market is foreclosure real estate sales. We have started including some of these, but not always. Sometimes they just don’t fit.”

The final tally of property values in Jefferson County will be made after the Board of Equalization has done its work in February, but Banks says she anticipates that lowered assessments would result in at least a $5 million dollar drop in total revenue generated from real estate taxes (if the levy rates remain the same as last year). This would result in a $600,000 hole in the county budget.

“We will have no choice but to increase the levy rate,” said County Commission Frances Morgan. “The state code says that we must maintain county revenue at 101 percent of the previous year’s value. We do this by increasing the levy rate.”

But not everyone agrees with this view. Commissioner Jim Surkamp believes that the commission has discretionary powers regarding increasing the levy rate.

Mark Schiavone, the interim county budget head, is also not sure that levy rates must automatically be increased. He says that the tax department says that the commission can choose not to raise the levy rate. “We know that there is a cap,” said Schiavone. “If we had to increase the county levy by seventeen percent this year to make up for lost revenues we would not hit that cap, but we might in future years if the drop in real estate values continues.” He added that the county portion makes up only 14 percent of the real estate taxes paid, so even if the commission increases the levy, most people should see a drop in taxes— so long as the school board does not raise its levy.

Property owners in Jefferson County can appeal their assessments even if they do not receive a letter from the county assessor and even if their values remained the same or fell from the prior year. Applications for review must be submitted by noon on 12 February 2010.

Thomas Harding is a licensed realtor in West Virginia and broker for Greg Didden Associates, Shepherdstown.