Louisiana's state tax commission is not providing enough oversight for residential property tax assessments, according to a report released Monday by the Legislative Auditor. But little may come of the issue unless lawmakers step in, the auditor said, since the commission categorically disagreed with the report's findings and placed the responsibility for ensuring accurate assessments elsewhere. The report by...
Louisiana's state tax commission is not providing enough oversight for residential property tax assessments, according to a report released Monday by the Legislative Auditor. But little may come of the issue unless lawmakers step in, the auditor said, since the commission categorically disagreed with the report's findings and placed the responsibility for ensuring accurate assessments elsewhere.
The report by the state Legislative Auditor highlighted three concerns with the current state of affairs at the Louisiana Tax Commission, which is charged with determining the fair market value of properties in the state:
- The commission did not follow up on residential properties assessed outside the 9 percent-to-11 percent acceptable range of fair-market value. This resulted in widely disparate property taxes being paid by homeowners living in comparatively similar properties.
- The commission approved changes -- both increases and decreases -- in assessments provided by parish assessors without determining their accuracy.
- The commission doesn't ensure parish assessors are reappraising properties every four years as required by state law.
AUDIT RECOMMENDATIONS
The bulk of the report dealt with the first finding. According to the audit, of the 6,551 properties offered as samples in the Tax Commission's 2011 Residential Ratio Survey, 39 percent were outside of the 9 percent-to-11 percent range of fair-market value required by state law. A total of 1,925 properties fell below 9 percent and 643 above 11 percent.
The report said there could be a number of reasons for these discrepancies, including differences in how the commission and the parish assessor determine the value or a failure by the assessor to reappraise every four years.
Regardless of the reason, however, the report said the issue could at least be partially mitigated by looking at the properties at the highest and lowest end of the range -- the 42 above 15 percent and 141 below 6 percent.
In addition to this recommendation, the audit also urged the commission to require parish assessors to date their assessments to ensure they're being completed anew every four years.
A table was provided to shed light on which parishes had not experienced a change in fair market value since 2007, a possible sign that reappraisals hadn't been completed, according to the audit.
Madison stood atop the list with over three-quarters of its property values remaining the same. Ouachita and Ascension rounded out the top three while East Baton Rouge came in 11th at 23.3 percent. Orleans Parish was not included in the sample.
ASSESSOR, COMMISSION QUESTION AUDIT FINDINGS
In its official response to the audit, the Tax Commission disagreed across-the-board with the report's recommendations, stating it was not its responsibility to provide oversight over the assessment process at this level. It also said taking certain steps to make the changes recommended by the auditor would be too costly.
Livingston Parish Assessor Jeff Taylor agreed, saying he understood why the auditor made the recommendations it did, but that most of the responsibility lay with parish assessors, not the Tax Commission.
"If the Tax Commission is being accused of not doing their job, you might find that some of the assessors aren't doing their job," Taylor said, adding he thought the auditor didn't go "deep enough" into the data to provide an accurate analysis.
However, he admitted the audit did have some recommendations the commission should consider.
The commission response, however, accused the auditor of having "predisposed intent to find fault where none exists." It added taxpayers have the ability to view comparative property assessments once a year during their "open book" period and anyone dissatisfied with the findings can take legal action.
One surprising anecdote in the report was the admission by one anonymous parish assessor that a reappraisal of residential properties hadn't been completed in his area in 30 years -- another figure the Tax Commission took issue with in its response: "For an assessor (unidentified by the audit) to admit to such malfeasance defies belief," it said.
Taylor also found the quote unbelievable: "That would put us in 1983, so you're going to tell me I'm using 1983 numbers and I'm passing a ratio study? That would be hard to do."
Taylor, who has been nominated for two international assessor awards in his 13 years in the post, also called into question the audit's view of assessment changes given approval by the commission -- $118
million in decreases and $10 million in increases in 2011.
He said the bulk of change requests he receives come as the result of delayed homestead exemptions filed late in the year as well as assessment freeze forms filed by residents 65 and older, the disabled and the military.
"Those numbers are a little bit misleading," Taylor said, adding the yearly ratio studies are also thrown off by these late-filing taxpayers and those operating outside of the current system.
NEED FOR LEGISLATIVE ACTION
Legislative Auditor Daryl Purpera, commenting Monday on the audit, called the commission management's response "unfortunate."
"The Louisiana Tax Commission, they're obviously charged -- they have the responsibility of oversight (but) they seem to want to pass it off to the courts," Purpera said. "I personally wish management would have taken a different tack on it."
Since the auditor's office doesn't have the legal power to enforce these recommendations, Purpera said it might take an act of the Legislature to more clearly define where responsibility over the accuracy of assessments lies.
He added that he was heartened by the fact that the Tax Commission said it intended to consider some of the recommended changes even if it disagreed with them, such as taking a look at properties assessed below 6 percent and above 15 percent of the fair-market value.
But Purpera said this didn't ease his concerns about the issues raised in the report, especially considering their "far-reaching implications" for tax revenues brought in by he state and the overall fairness of the state tax system.
Taylor also urged legislative action on the issue, saying the commission needed more resources and staff to deal with overseeing the 64 parish assessors. But he doesn't think what is at question here is where the responsibility for accurate assessment lies.
"The point is just go out and do your job (as an assessor) and do it right and if you do you're job right, the Tax Commission's job should be the easiest job in the world."
Read the full auditor's report below.