City of Monroe finds commercial tax values skewed

County accessor ‘takes offense’ at implications from survey

A recent survey done by Monroe City Administrator Logan Propes and city government staff for the mayor and city council concludes that property tax valuations in the city and elsewhere across the county — done by the Walton County Tax Assessors office, which handles property valuations in the county and its municipalities — are geared more favorably toward large businesses and industries, rental housing and multifamily housing developments, creating inequities in terms of tax burdens for small local enterprises and single-family homeowners.

The survey also contends that the purportedly inequitable valuations are artificially decreasing the amount of tax revenue that could be available to fund local government operations and initiatives, and it has prompted Propes and Mayor John Howard to suggest that the Walton County government arrange
for an independent consultant to study property tax valuations across the county.

Howard, who along with Propes met recently with Walton County Manager John Ward and Walton County Commission Chairman David Thompson on the issue of tax valuations, said the two county officials “seemed interested” in having such a study done, and are “looking into it.”

But, Howard added, “I know there’s a lot on their plates.”

The genesis of the 24- page survey, released to the mayor and council at a recent retreat, was a sidewalk conversation that Howard had with someone who was interested in purchasing a commercial property in the city, but was deterred by his own estimation that it was valued at somewhere around $1 million. Howard said he later checked county property records, and discovered the property was valued at $337,000.

Commercial property conclusions

One conclusion of the survey is that commercial properties “appear inequitably valued and in many cases likely drastically under-valued.”

In support of that conclusion, the survey details the valuations of a number of commercial properties in the city.

One of those properties, a major discount retailer, saw a value increase of just 16% over 17 years, and underwent “a major renovation in the years where the appraised value dropped.” For contrast, the survey included the valuation history of a small downtown Monroe “mom-and-pop” business, valued at $333,500 in 2021 and today valued at $820,600. Much of the increase was apparently due to improvements made to the property — a point conceded in the survey, which nonetheless noted that the recent increases in valuation “may not be incorrect but they appear vastly inequitable compared to other larger corporate businesses.”

The survey includes a couple of questions regarding commercial property valuations. One apparently tongue-in-cheek question wonders whether land values decrease when a commercial building is placed on a piece of property, while a second question wonders whether sales prices on which assessments are based are accurately reflecting the market value of a given piece of commercial property.

Residential rentals and apartments

The survey also addresses residential rental and multifamily properties, noting in particular that multi-family properties routinely require more local government services than single-family properties. Yet according to the survey’s look at a handful of apartment complexes, on Cook Street, Plaza Trace and
Ridge Road, valuations have remained constant, or risen only slightly, over the last five years.

Referencing one particular apartment complex to make this point, Howard said, “Police are called out there very regularly. They’re never called to my home.”

As with its look at commercial properties, the survey includes a list of questions and observations regarding residential rental properties and apartment complexes, noting “in so many cases, the current assessed land value alone is well below the actual total purchase price from many years earlier.”

Among the questions posed in the survey regarding rental and apartment properties is another apparently tongue-in-cheek query wondering if land values decrease when such a property is built on a given tract, and why some property units are valued “at a near salvage improvement value or unbuildable land value.”

The survey document ends with a number of assertions, including an observation that “currently, regular, single family owner-occupied residential homes appear to have borne the brunt of the largest increases (in valuations) year after year while most commercial and residential rental properties see modest at-best increases if not some decreases in value. Many ‘mom-and-pop’ commercial properties have also endured substantial property increases.” ‘We’re going to fight for our homeowners.’

The document goes on to assert that increasing parity among valuations would allow for substantial growth of the tax digest — a listing of the assessed value of all taxable properties in the county – which, in turn, would move the county away from the current situation, in which “residential and small commercial properties are absorbing the needed tax increases year after year, which exacerbates the problems as their valuations increase at a higher clip than large commercial and many rental properties.”

Overall, the survey’s conclusion asserts, “There needs to be a broadening and flattening of the digest values across all land strata, not just residential.” In short, Howard contended, a revamped look at how industrial, commercial and retail properties are assessed “can offset a tremendous amount of residential property tax.”

Under the current situation, the mayor said, local governments “are giving up literally millions in tax dollars in the county.”

Today, the mayor argued, “everybody in the county is getting the short end of the stick,” as he went on to say that “the commercial and industrial (tax) digests should alleviate residential taxes.”

“We’re going to fight for our homeowners,” Howard vowed. “This is information that our general population needs to know.”

Chief appraiser reacts

Tommy Knight, chief appraiser in the Walton County Tax Assessors office, took exception to Monroe’s survey.

“For them to say that we’re not valuing commercial property correctly, I take offense to that,” Knight said.

According to Knight, the assessors’ office is audited each year by the state Department of Audits regarding how it values all classes of property based on property sales within the county for the previous calendar year.

“It’s the tale of the tale to know if we’re doing our job or not,” Knight explained.

According to Knight, the most recent audit of Walton County tax assessments found they were within the established ranges for residential, commercial and industrial properties.

“We’re very much in compliance on all property types,” Knight said.

Howard acknowledged the annual state audit has found that Walton County tax assessments are among the best in the state, but the mayor insisted that “just because it’s in the top range, doesn’t mean it’s correct.”

He went on to suggest that while he believes residential property assessments are realistic, commercial property assessments may be off track because there are fewer of those sales than residential sales, meaning there is less data available for making accurate assessments.

Howard went on to say he’s not questioning how the county’s assessors are doing their jobs, but is instead concerned about what is factored into property assessments in general to produce the inequities alleged in the city’s survey.

“It’s just that the formula is wrong,” Howard contended.

Knight said he was not consulted by the city in connection with the survey, nor has he seen the 24- page document. “I can’t look at anything, because they’ve not given it to me,” he said, adding “nobody called me to ask me any questions about it.“I have no idea what parcels they included, what parcels they looked at and did not look at.”

He went on to say, though, that he is willing to meet with Howard and Propes privately to discuss their concerns.

“I’m more than happy to listen,” Knight said