Homer land assessments draw record appeals
April 14th, 2017 | Carey Restino
Kenai Peninsula Borough Mayor Mike Navarre faced a room full of frustrated landowners last week after changes to the way property values were assessed in the Homer area resulted in dramatic jumps in value for many.
Navarre said he has been studying the situation both with the borough's assessing department as well as with the state assessing association but hasn't yet decided how to proceed. He said the borough's hands may be somewhat tied by the requirement that it issue a complete tax roll by June 15, which would be hard to meet if the borough tried to do anything more than respond to individual appeals.
But just the number of appeals, which at last count was more than 750, is alarming.
"It is by far the most appeals we've ever gotten," Navarre told the 50 or so residents gathered last Thursday at the Islands and Ocean Visitor Center. "That in and of itself says, 'Hmmm.'"
Navarre said he has asked that board of equalization appeals hearings be held in Homer, where most of the appellants live rather than making people drive to Soldotna.
Navarre said the sometimes dramatic changes in property value — some reported a 200 percent jump in assessed property values from last year — stem from changes the assessors office used to calculate those values. The model applied value to the recently built natural gas pipeline to all properties that connect to it, for one, but it also applied a value to properties with a view. In some areas, that view raised property values by 90 percent, he said.
But landowners questioned the claim that their view was never considered in prior assessments, while others contested the fact that neighbors with the same view did not see the same jump in value.
Others questioned the way assessors applied value to things. Homer resident Jeff Sharp said he bought a $4.99 solar pathway light that barely works and assessors recorded it as a $500 value increase for a "lighted pathway."
"My assessed value has gone up 148 percent, taxes have gone up 142 percent," said Sharp, who recently retired and said he is seriously weighing whether he can stay in Homer. "You can't afford to retire in this state."
Navarre countered that with the senior tax exemption, Sharp and other retirees would have the first $350,000 in property value exempted from taxes at age 65, in addition to the hardship exemption that means seniors cannot be charged more than 2 percent of their income for property taxes.
Navarre said that while the model wasn't perfect, most accepted that the borough's assessments generally ran far below the actual land values on the open market. He said that's partly because in Alaska, land sales do not get reported to local governments, leaving assessors to depend on voluntary reporting to determine land values.
"Land values on the Kenai Peninsula have been undervalued for a long time," he said. "How many of you have ever gone in and said, 'I think my value is way more and I'd like to raise it.' It doesn't happen very often."
Navarre said he wanted to debunk the rumor that the increased land values were a sneaky way of getting more tax revenue out of property owners during tight financial times. He said his office didn't even know they were applying a new formula to land values until the assessing department sent him its final values. He had budgeted for a 1 percent increase in land values, assuming that with a contracting economy, last year's 2 percent increase was likely to drop.
"I get the information the same time you do," he said. "I can see folks are upset, and I have concerns about how things were applied also. We're going to have to figure out what our options are in order to be fair — that's the goal."