Property Revaluation in the State of Kansas

Marion Johnson

[A presentation at the annual conference of the Council of Georgist Organizations, held at Kansas City, Missouri, 2008. Reprinted from GroundSwell, May-June 2009]

MARION JOHNSON is Chief appraiser for Douglas County, Kansas, and was the 2007 president of the International Association of Assessing Officers (IAAO)

In the state of Kansas we do an annual revaluation cycle. Every year on January 1 we revalue all the parcels in my county. We mail out property valuation notices to everybody on March 1 and we go through the process of appeals of people that disagree with the values. We have had an annual process in Kansas since 1989. Prior to that it was a 20 year cycle when last revalued. In 1989 when the property owners got their valuation notice for the first time there was a lot of sticker shock because values went up tremendously, 200%-300%. Since that time we have gone to an annual revaluation cycle.

When I did IAAO, and we always were for annual revaluation in our standards and in our writing and in our publications. We support annual revaluation cycles. We think that is the best method of handling the property tax valuation system in the United States, but that is not to say that all jurisdictions do. I was just in North Carolina doing a class and in N.C. they have counties that revalue once every 4 years and some counties that revalue once every 8 years.
In our state of Kansas our property owners, once they got through the sticker shock of that first time and we got through that first year, then in the first three years they grew accustomed to seeing the annual amount on their property. And it is more acceptable to them to see a 3% or 5% increase in value on that year. Most property owners do tend to forget a property increase the 3 prior years and if they get a 25% to 30% increase in value the 4th year they get upset.

So an annual revaluation has been pretty acceptable to our property owners in our state. The other thing is using a base year. In the jurisdiction now the values are going down and flat. Unless we do an annual revaluation, people are probably overpaying what the actual value is as they have to stay in the base year until we do a revaluation cycle. In my particular jurisdiction this year 60% of our parcels saw no value increase at all but the value declined. So the ability to do valuing adjustments every year allows us to reduce the value every year for a large number of our properties in this particular appraisal cycle.

One of the other considerations is land values and building values. CAMA, computer assisted mass appraisal systems, is how most jurisdictions in the mass appraisal world establish values. Without computerization you wouldn't be able to value the large number of properties we have to value; we would have to do it be hand like we did 27 years ago when I started. You couldn't do that any more because you value every property every year.

In my state and in my jurisdiction we establish a land value and that land value is applied to every parcel in the neighborhood whether it is vacant or improved. If it is a residential parcel and the residential lots sell for $40,000 a lot in one neighborhood, then every property parcel will have a land value of $40,000 and what is left over will be the building value.

For example, say my house is worth $200,000 and if the land value established in my neighborhood is worth $40,000 then the improvement value is $160,000. We have to break it out so if the property owner comes in he can see how much we assigned for land and how much we assigned for parcels. The land value doesn't fluctuate just because it is a vacant lot, and that is the same with commercial also. If we have commercial lots in the industrial park, for example, we see what the commercial lots in that industrial park sell for and then value all of them at the same price per square foot. Whatever the total value is, we take the land value out and whatever is left we assign to the improvement value. It works pretty well

In my state of Kansas, the burden of proof is on me, the assessor. When property value is appealed it is a 3-4 step system. When we mail out valuations notices, if property owners disagree, they have right to appeal within 30 days. The first hearing is with a member of my staff. If we can't reach a settlement with property owner and can't reduce the value, then the property owner can appeal to the state of Kansas which is called a formal appeal. The burden of proof was on the assessor, not the property owner. That changed 4-5 years ago in our state. Prior to that the burden as on the property owner.

I am proponent of annual figures. I think it is the best way to get fair valuation of property. For property value to be fair and equitable we have to start out with fair market value, what a willing buyer and willing seller would agree upon. Our state constitution charges us to value property at fair market value.