HELENA – State Revenue Director Mike Kadas said Wednesday his agency is working with lawmakers on a bill that would require the state to reappraise property, for tax purposes, every two years instead of every six.
But the change would cost more money, because the agency would have to hire more people to carry out the huge task more frequently, he said.
“We’re providing a much higher level of service, in going from every six years to two, and that doesn’t come for free,” Kadas told a legislative budget panel.
The subject came up as Kadas talked to the House Appropriations Committee about the Revenue Department’s budget, which is already proposed at 6 percent higher for the next two years.
The current budget increase includes five new temporary positions to help carry out the Revenue Department’s six-year-cycle reappraisal, which is scheduled to finish by 2014.
The reappraisal updates the market value of all taxable property in the state, so property taxes are calculated on the most current value of the property.
But, as outlined by Kadas, the Legislature is considering a bill that would direct the department to do reappraisal every two years, starting in 2016, to keep the values more accurate.
The proposed change was prompted in part by the timing of the last reappraisal, which set values based on market values for 2008 – at the height of the housing boom. By the time the values took effect the next year, the value of many homes had plummeted in the wake of the late-2008 stock market and housing crash. Property owners were left to pay taxes on the inflated value for the next six years.
Senate Bill 4, sponsored by Sen. Jim Peterson, R-Buffalo, creates a two-year reappraisal cycle. It was heard by the Senate Taxation Committee in January.
Kadas said the bill is being redrafted and that he hopes its cost will be $5 million to $6 million for the next two years, instead of its original $9 million cost.
The bill also would entail the hiring of 17 new people for the Revenue Department, to help with the more frequent reappraisals. Kadas said the five new temporary people in his agency’s 2014-15 budget to help with the current reappraisal would become permanent positions, and that the new personnel in SB4 would be offset by that amount.