Tax appeal hearings to be held throughout county
A discussion of upcoming property tax appeal and equalization meetings throughout Hubbard County in the next month led county commissioners to the subject of the loss of $200,000 to a Michigan-based tax assessing software developer.
It began with Hubbard County Assessor Bob Hansen presenting visual aids he will carry to those township halls explaining the differences between how parcels of land are taxed.
Hansen meticulously compiled a tax comparison of 33 different parcels of property, classified as seasonal, homesteaded residential, agricultural, commercial and rural vacant land to show the state's complex tax picture.
He selected the parcels based on value, all approximately with a taxable market value of $170,000.
The chart he prepared explains why value isn't the only indicator of what a person's taxes will be.
"It's only one piece of the pie," he told Hubbard County commissioners.
Classification rate issues have much to do with how land is taxed. For instance, last year the Legislature decreased the agricultural classification rate, so some properties experienced a commensurate decrease in taxes.
School districts also figure into tax rates. If a district's populace votes on an operating referendum, those taxes will be higher than someone living down the road in a different school district.
Park Rapids city dwellers pay higher taxes for that $170,000 home because they have city services such as police protection, garbage, water and sewer rates that are figured in.
Some property owners who were taxed under a now defunct program called Limited Market Value saw their taxes jump significantly when the program was phased out after last year. Those valuations were sometimes well below the market value of the home. Now the estimated market value will equal the taxable value.
But those designations didn't necessarily mean that all tax burdens from Limited Market Value properties rose. Some decreased.
Disabled veterans get tax breaks on their property according to Legislative mandate.
But the complexities of how taxing is related to valuation led the board into the discussion about Manatron, the assessment and billing software the county abandoned this winter after a $200,000 initial investment and likely $20,000 more to implement the faulty program.
Hansen presented commissioners with his department's overtime amounts, 57 hours to date, and said if the county hadn't pulled out of the software implementation when it did, "those numbers would have been much higher."
The county balked at paying the Michigan software maker any more money when it appeared local officials could not get tax statements in the mail on time and the program wouldn't perform to specifications.
Commissioners said losing the $200,000 was cheaper than losing much more trying to get the software to work.
Many other counties are still struggling to get their Manatron programs operational, commissioners noted.
"Regardless of how much time we put in, things would have gone out the door with problems," Hansen told the board of the tax statements mailed out last week. "We didn't have time to look everything over."
The county quickly reverted to its old tax software to get the statements out in time. Other counties haven't been as fortunate, the board discussed.
But the state's complex tax laws were much of the problem, commissioners agreed.
"How can they write a program to cover everything the Legislature thinks up in the middle of the night?" questioned board chair Lyle Robinson.
Manatron, which has sold taxing software to several other states, was "trying to put a square peg in a round hole" in Minnesota, Hansen said.
"I don't think we can ever get involved again in fronting people the money to figure something out," said commissioner Cal Johannsen. Hubbard County joined a co-op of 30 counties to purchase the software.
"I'll never vote to front somebody money again," Johannsen said.
Commissioner Dick Devine blamed the co-op. "We let them carry the ball and we never should have," he said.
Hansen starts his series of town hall meetings April 19 in Thorpe and Mantrap Townships.
His three-year projections on the 33 parcels show that by 2011, some of those $170,000 properties will carry a taxable market value anywhere from $148,500 to $196,500. Almost none of the properties' market values will remain static.
And Hansen will explain that an "RV" designation on a parcel means it's rural vacant land.
"People have called me to say they've never parked an RV on their property," Robinson noted about some of his confused constituents.