Increase in property tax lawsuits an anomaly

mowen@ledger-enquirer.comApril 6, 2013 

A perfect storm of sorts passed through Columbus in 2012, causing a flood of lawsuits against local property owners, filed by the city's Board of Tax Assessors.

The confluence of three events last year caused the spike in the number of property owners who appealed their tax assessments to the county's Board of Equalization, and then an ensuing spike in appeals of that board's rulings by the assessors. Those appeals, as well as property owner appeals of Board of Equalization rulings, are in the form of lawsuits filed in Superior Court.

When a property owner disagrees with the Board of Tax Assessors' assessment of their property, the most common avenue of appeal is to the Board of Equalization. In a normal year, there are about 100 or so of those, observers say. Either party may appeal the Board of Equalization's decision to Superior Court. In the previous two years, the tax assessors board appealed only one case per year.

But in 2012, 800 property owners filed appeals with the Board of Equalization, resulting in 213 downward adjustments in tax assessments, according to Chief Appraiser Betty Middleton. Of those, the tax assessors appealed 48, according to City Attorney Clifton Fay. Of those 48, 33 were filed against developer Dave Erickson, over individual lots in two developments. Twenty-eight of those have been consolidated into one appeal and Fay expects the five others to be consolidated into another. That brings the number of appeals down to 17 -- 15 against homeowners and two against Erickson.

Three things caused the eruption of appeals, observers say:

A 2009 state moratorium on property reassessments expired, allowing local tax assessors to reassess property that may have gained in value. At the same time, a new state law required tax assessors' offices to send out assessment notices to every property owner in the county, whereas in the past, those notices went out only to those whose property had been reassessed. On top of that, a one-year, $30 million tax millage rollback in Muscogee County, the product of the passage of a permanent Local Option Sales Tax, also expired, resulting in some cases of sticker shock.

So far in 2013, the Board of Equalization has heard close to 500 property owner appeals, had issued about 60 downward adjustments and the Board of Tax Assessors has appealed none, Middleton said.

Suing the taxpayer

None is the perfect number of such appeals, in the opinion of Jack Williams, a professor of state and local tax law at the Georgia State University College of Law. They are rare, and they should be, he said.

"It is rare enough that a lot of people are surprised to find that the tax assessor can actually sue the taxpayer," Williams said. "It is unusual, but not totally unheard of. What is most unusual is for them to actually try a case. That is very rare."

Williams pointed to the lone appeal that the Board of Tax Assessors filed in 2011, the failed lawsuit filed against Green Island Hills homeowner Gunby Garrard, whose property tax assessment had been lowered from about $1.9 million to $1.4 million by the Board of Equalization. In a strongly worded order, Superior Court Judge Bill Rumer not only sided with Garrard and chided the assessors' methodology, but he ordered the city to pay about $160,000 in attorney fees.

Williams said he was not surprised by the ruling and strong language in Rumer's order and said the judge should be considered "a hero."

"It is easy for a judge to rule with the taxpayer, then not award the fees," Williams said. "If this went unchecked, we would be back in the old days where the government had the greater advantage. They could just sit back and challenge all of these in court. ... The Board of Equalization is a system designed to reduce cost and give voice to the taxpayer.

"It took courage for the judge to stand up and say, 'Not in my court, not in my system.'"

Attorney Randy Lomax, who represents and advises the Board of Tax Assessors, said the board does not take the appeals process lightly. And the historical numbers back up that assertion, he said.

"There has to be a significant difference between the BOE's value and what the Board of Tax Assessors believe it ought to be valued for there to be an appeal," Lomax said. "They're just not going to appeal because the BOE made a downward adjustment. That does not happen."

Accountability?

Depending on the gap between the tax assessors' value and the Board of Equalization's, Columbus Council may or may not have any say in whether an appeal will go forward to court.

At-large Councilor Judy Thomas said if the Board of Tax Assessors wants to appeal a Board of Equalization decision, councilors must be notified of the decision within 10 days, and councilors can decide whether it goes forward. But that's only if the assessment reduction is less than 20 percent of the original. If the reduction is more than 20 percent, as it was in the Garrard case, the Board of Tax Assessors can file the appeal on its own.

"That is the part of it that is troubling to me, that the Board of Tax Assessors, that has no accountability to the citizens, except that they are good citizens, can make a decision on going forward, obligating the city not only for whatever kind of settlement might come out of it, but for lawyer fees and court costs," Thomas said.

That can be frustrating at times, Mayor Teresa Tomlinson said, but it's by design and probably for the best.

"We have ongoing concerns about a lack of efficiency, and certainly about how the process is administered," Tomlinson said. "And as mayor, I am limited in how I can organize or reorganize the Tax Assessors office, because state law limits that."

Tomlinson said the autonomy the office enjoys was established to prevent politics from entering the process.

"We want to make certain that the process is fair and used to facilitate our citizens' lives, and not to hinder them or harass them," she said.

That kind of harassment, said law professor Williams, is the effect of challenging the Board of Equalization and taking citizens to Superior Court. The Board of Equalization was created by the state as "a people's court, of sorts," Williams said.

"It is a system designed to reduce costs and give voice to the taxpayer," Williams said. "... The Board of Equalization is designed by representatives in state and local government to be the primary administrative remedy for these issues. The whole idea was to take it out of the courts and give voice and venue to the taxpayers."

Jane Jones is a defendant in one of the Board of Tax Assessors appeals. Her husband, Ray Jones, appealed a reassessment of their Nancy Street home to the Board of Equalization in 2012 and got a reduction. The Board of Tax Assessors appealed to Superior Court.

Then her husband died of cancer, and Jane Jones said her attorney advised her that attorney fees and court costs would likely be more than any tax savings she might see.

"He said I'd be better off to just drop it," Jones said. "Knowing Ray, he probably would have fought it. He was a fighter. But I just wasn't up to it."

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