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Tax tiff drives assessor race debate

Thursday, July 31, 2008 | 10:33 p.m. CDT; updated 10:05 a.m. CDT, Friday, August 1, 2008

COLUMBIA — Shortly after Mike and Alison Martin bought their historic home on South Glenwood Avenue in the fall of 2002, they received a letter from the Boone County Assessor's Office asking them to complete a questionnaire to help maintain fair and accurate home appraisals.

On the flip side was a form requesting the number of bedrooms, bathrooms, fireplaces, etc., in the Martins' new home - as well as the price they paid.

Nowhere did the form indicate the questionnaire was mandatory, but nowhere did it state that it was voluntary.

So the Martins wrote down their purchase price: $254,900.

Nearly six years later, they are still bothered by the financial consequences.

As a result, the Martins have been a fixture in the effort to unseat five-term incumbent Assessor Tom Schauwecker in Tuesday's primary election. They have attended virtually every candidate forum to speak out publicly on the issue of home sales-price disclosure, and they have been key supporters - financially and otherwise - of Schauwecker's sole challenger in the race, Democrat Barbara Bishop.

***

To understand the nature of the Martins' grievances, it is helpful to understand the purpose of the questionnaire they received and its role in the assessor's duties.

The assessor is responsible for overseeing the valuation of all real estate and tangible personal property in the county, used to determine tax bills. Property valuation is derived from an appraisal, or the professional opinion of market value. This is in contrast to "assessed" value, which is a calculated percentage of the appraised value, depending on a property's classification: Agricultural property is assessed at 12 percent of its appraised value, residential at 19 percent, and commercial at 32 percent.

Appraisal is an inexact science, but a common test of good appraisal is to consider the amount of money likely to exchange between a willing buyer and a willing seller of a property.

In appraising real estate there are said to be three indications of value: the market approach, the cost approach and the income approach. Although the three are often reconciled to obtain accurate appraisals, the market approach is particularly handy in appraising a residential property. It is done by evaluating comparable properties that have recently sold.

Both Schauwecker and the Missouri State Tax Commission have touted the importance of sales data in conducting uniform appraisals. Schauwecker has called sales data the "foundation of the appraisal process."

But Boone County is handicapped in this regard: Missouri does not require the public disclosure of home sales prices and is one of only six states that lack a guaranteed mechanism for obtaining home sales data.

This is why, since 1981, the Boone County Assessor's Office has been sending home sales-price questionnaires to newly purchased homes. Chief appraiser David Sabath said about half of Boone County's sales questionnaires are returned.

***

When the Martins filled out their form, they thought it was mandatory, Mike Martin said.

But in 2005, a reassessment year, the Martins were in for a shock when they received their tax bill: The appraised value of their home had jumped from $142,000 to $270,000, and their annual tax bill on the home had jumped from $1,459 to $3,074.

"They went up 92.5 percent overnight - no notice," Mike Martin said.

So he checked the county assessment log, which has been available online since 2004, and saw that no comparable properties in his neighborhood had undergone appraisal increases of more than 15 percent (the maximum allowed by law without a physical inspection).

Schauwecker said a staff inspector visited the Martin home and left a note; Mike Martin said he never got the note.

The Martins blamed the questionnaire they had filled out voluntarily three years earlier - and their willingness to disclose their purchase price - for the aberrant tax increase.

"Normally when you use questionnaires like that, you're using it to build a database of comparable values," Martin said. But he thinks Schauwecker instead used the pricing information to target the Martins and, subsequently, their neighbors.

When the Martins complained to Schauwecker - in a meeting that lasted more than 1 1/2 hours, as Schauwecker recalls - Martin said Schauwecker admitted he'd previously made a mistake in appraising the property too low.

Martin said Schauwecker also threatened to reassess neighboring properties to account for the low appraisals, which ultimately led the Martins to drop their tax appeal.

"You don't want to have your neighbors retaliated against because you're exercising your legal rights," Martin said.

Martin thinks the voluntary nature of the form should have been made clear. But he takes greater issue with the manner in which his purchase price was used.

"No appraiser would ever use one home to make a case," Martin said. "That's not proper appraisal."

Martin also thinks Schauwecker has given inconsistent explanations for the use of the sales questionnaire, pointing to conflicting statements the assessor made in the Columbia Daily Tribune.

In 2005, Schauwecker indicated he might have to conduct reassessments in specific neighborhoods to account for the too-low appraisals that were called to his attention by the Martins' questionnaire. But more recently, Schauwecker has said in public forums that a single questionnaire would not be used to target an entire neighborhood.

Martin said that his tax woes mobilized him to campaign against Schauwecker and that "fear should never stop a person from questioning injustice."

At a July candidate forum sponsored by the League of Women Voters, Alison Martin stood at the microphone and called the Martins' taxing ordeal "the most horrible experience we've had in Columbia."

***

In large part because of the Martins' experience, Bishop has made the sales questionnaire one of her foremost campaign issues.

She acknowledged the Martins were the ones who "first stepped forward and brought attention to it."

On her campaign Web site, Bishop said she would "do away completely" with the sales questionnaire as it is. Because it is not mandatory and not clearly labeled, Bishop thinks home buyers might throw it away, list an inaccurate sales price or list a price higher than its current appraisal value. The latter, she said, is what happened to the Martins and led to what she believes is an unfairly high assessment.

She added that the assessor "shouldn't be putting the burden on people by using the current certificate of value questionnaires."

But Schauwecker said there are few, if any, alternatives. The Missouri State Tax Commission, he said, would "throw a fit" if any county tried to eliminate sales-price questionnaires.

Both candidates acknowledge that the lack of a sales-disclosure law in Missouri underlies the issue.

Schauwecker has repeatedly said that if he could change one law, this would be it - because the public disclosure of home sales prices would enable more fair, accurate appraisals.

Bishop said that, if elected, she would work with legislators and to consider the fairest ways to handle sales disclosures.

In its 2007 annual report, the Missouri State Tax Commission's first recommendation to the Missouri legislature was for state-mandated sales price disclosures in all counties. St. Louis City, St. Louis County, Jackson County and St. Charles County have passed local ordinances allowing them to obtain certificates of value. But these jurisdictions represent only 50 percent of locally assessed real estate value in Missouri.

The other counties, including Boone, that rely on sales questionnaires collectively see a return of 15 percent to 25 percent.

Again asserting the importance of sales data in performing accurate appraisals, the commission calls this return "woefully inadequate to accurately measure market behavior."

 


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