Lexington PVA office uses uneven, unfair process to value our homes | Opinion

How would you feel if you discovered that the property taxes on your new home were 78.6% higher than an almost identical home next door? Outrageous, yes, but this is entirely possible under the current Lexington-Fayette Property Valuation Administrator (PVA).

Two homes in my neighborhood were assessed identically last year for $176,300. One home sold for and is now assessed at its sale price of $315,000. Using last year’s tax rates, the new home owner will pay a projected $1,681.00 more than his next-door neighbor.

Current practice by the PVA reassesses all recent home sales at their purchase price. The problem with this process is that in so doing a part of the tax burden is unequally being shifted onto new home owners. In the property assessment community this is called “welcome stranger assessing.” Kentucky state law provides that all real property be assessed at 100% of its fair cash value. The focus is on the word all, not on some or just on a select few, but all. Under the existing system new homeowners are being treated unfairly.

The community’s current assessment roll is anything but equitable. Assessment equity is defined as the “degree to which assessments bear a consistent relationship to market value…In popular usage, a synonym for tax fairness.” The expectation of the public should be that everyone pays “their fair share” of local property taxes and not $0.01 more.

The PVA has established a complaint system but the process for filing a complaint is rather opaque. Some assessing offices around the country provide complaint forms, property data, sale data, and the statistical information that was used when reassessing the community. In Lexington none of this information is readily available from the PVA. The homeowner is forced to go it alone.

The PVA also limits what a home owner can discuss when trying to make a complaint. There is a certain amount of circular logic employed by the PVA. They tell you that “that is what you paid and therefore that is what the assessment is.” If you ask about your neighbor living in an almost identical home that is assessed for considerably less, the PVA replies that “we are not going to talk about your neighbor, we are only going to talk about what you paid for your home.” This is an exercise in frustration for the home owner and a convenient way for the PVA to avoid talking about assessment equity issues.

Another problem with the current roll is that when a neighborhood is reassessed the PVA office is not reassessing every home in the subject neighborhood, it is primarily “value trending” the neighborhoods. Under this practice if home values have been increasing at “X%” per year in the selected area, then the old assessment is raised by the trend value of “X%.” The problem with this practice is that relatively recently sold homes will have their assessment raised but the differential between newer sales and underassessed neighbors is never rectified.

There was general upset when it was discovered that former Mayor Jim Gray’s home had not been reassessed in 17 years, but such a situation is not unique. A survey of my own neighborhood has discovered a home that had not been reassessed in 18 years. Dozens of other homes had not been reassessed in a decade. The problem for the general taxpaying public is that these lucky homeowners had their tax liability decline while everyone else’s went up.

The Kentucky State Constitution provides that all real property shall be valued at 100 % of its fair cash value (FCV).” However, even a cursory review of the local assessment records reveals that the local PVA is not maintaining the roll at 100% FCV and therefore is not in compliance with its constitutional mandate. But as currently managed the PVA will never, ever address assessment inequality in the community.

W. R. Torp is a Kentucky State Certified Appraiser and a retired member of the New York State Institute of Assessing Officers.