By PETER HUSSMANN
Residential and commercial property values will increase across-the-board in Jasper County after the Iowa Department of Revenue denied county assessor John Deegan's appeal of its previously issued tentative equalization order.
Last month, the state revenue department issued a tentative equalization order for Jasper County that would increase the values of all residential properties 6 percent and all commercial properties 5 percent. When finalized later this year, the order would be for the Jan. 1, 2009 assessments. Equalization orders are issued in odd-numbered years.
In making his appeal against the need for such valuation increases to revenue department officials, Deegan noted that his review of county sales figures show that current assessments are within the statutory range of market value precluding the need for any increase in each class of properties. He also noted the high level of foreclosures in Jasper County, the high unemployment rate and the glut of vacant commercial properties in Newton and Jasper County.
"I thought I had some compelling arguments against the need for the increases," the obviously irritated county assessor said today of the Department of Revenue's decision. "We don't need it. My arguments fell on deaf ears."
In ruling on the appeal, Dale Hyman, director of the Iowa Department of Revenue's Property Tax Division, acknowledged that "the high number of foreclosures and the unemployment rate in Jasper County are certainly reasons for concern."
However, he noted in denying the appeal, "it is surprising that foreclosures have not had more impact on arms-length sales."
"Our time analysis indicates a stable market for those properties not influenced by foreclosures," he said.
While that may be the case now, Deegan worries that in the future those foreclosures may have an impact on other property values.
The county assessor pointed to a recent Des Moines Register analysis on the potential impact of foreclosures where lender-owned properties are sold at steep discounts.
In 2007, the analysis found, Jasper County recorded 55 foreclosures with a median sale price of $54,000. A year later, the county recorded 127 foreclosures with the median sales price on those properties falling to $52,300. Of greater concern, however, is that those sales prices were 36 percent and 35 percent, respectively, below assessed value.
The county assessor did not appeal the department of revenue's initial 48 percent equalization order on agriculture properties in Jasper County. However, the department recently notified Deegan that an alternative order will be forthcoming that will increase valuations on agricultural land by 53.5 percent but leave current values for ag land structures.
All counties had previously been notified of the pending change with many making the assessment changes last spring. While the rate appears steep, it is primarily due to high crop prices the last two years. The state said it would soften the blow by manipulating the "rollback" factor for ag land to limit the taxable value growth to 4 percent.