(Source: By Zachary K. Johnson, The Record, Stockton, Calif. (MCT) – STOCKTON – For the fifth year in a row the assessed value of properties in San Joaquin County fell, but the drop of less than one percent is a dramatic difference from the free fall that followed the depth of the housing bust.
For more than 115,000 homeowners, it means the market value of their property fell again last year, but it comes with the silver lining of a smaller property tax bill to come.
And for the local governments that have seen declining property taxes contributing to year after year of shortfalls and cuts, the slowed decline shows shrinking tax revenues are leveling out, offering some hope that better days are on the horizon.
“It seems like things are improving,” Assessor-Recorder-County Clerk Ken Blakemore said. But he cautions that the assessed value is marked on Jan. 1 of this year, and not a predictor to where the housing market is headed.
From 2000 to 2007, the assessed value of property in San Joaquin County more than doubled when it peaked at $62.6 billion in 2007.
Since then, the value declined by 19 percent, to $50.9 billion in 2012, according to the latest roll released by the Assessor’s Office this week. It was a drop of 0.3 percent over 2011.
The assessed value isn’t necessarily the market value of a home. It is used to determine how much property tax is owed.
The assessed value of a property can grow at a maximum of only 2 percent, no matter how fast the housing market is rising. If the market value falls below the assessed value, then the lower value becomes the assessed value.
Starting today, the Assessor’s Office begins sending out notices to 115,000 property owners that their properties have been assessed at a lower value.
About 60,000 owners will not receive notice because their assessed value will increase by 2 percent, according to the Assessor’s Office.
For the most part, a decline in assessed value means a decline in revenue for local governments, and any decline in revenue could be a burden on budgets, said Jessica Trounstine, associate professor of political science at University of California, Merced. “Local governments are working from paycheck to paycheck.”
The decline in property taxes is one of the precipitating factors leading up to Stockton’s bankruptcy filing and financial problems for other cities in the state, said Bob Benedetti, director of the Jacoby Center at University of the Pacific.
In court documents filed with federal bankruptcy court, Stockton makes its case for insolvency, in part, by noting the decline in property tax revenue following the sub-prime mortgage crisis and the rash of foreclosures that followed.
Stockton has a budget in place for the city to operate during bankruptcy proceedings.
The city could not say whether the assessed values were better or worse than anticipated or how the news from the Assessor’s Office would affect the city’s spending plan, without further analysis, city spokeswoman Connie Cochran said.
Property in Stockton was valued at $16.2 billion, a 1.6 percent drop from last year. The value of property in Ripon and Manteca rose by less than a tenth of one percent.
The Assessor’s Office figures have been submitted to the San Joaquin County Auditor-Controller’s Office.
The final tax roll for public agencies at the county start at 1 percent of that assessed value and goes up from there, including adding in special assessments that vary from area to area, Auditor-Controller Adrian Van Houten said. Later in the year, his office will let local governments know what their share of the tax roll will be, he said.
San Joaquin County government can expect to take in about 18 percent, said Assistant County Administrator Rosa Lee. Property tax makes up about 80 percent of the county’s local discretionary dollars, and the figures released from the Assessor’s Office indicate better revenue than anticipated in this year’s budget.
“I think that it’s good news; it looks like hopefully we’re turning the corner,” Lee said. In the best-case scenario, last week’s news could mean $1.5 million more for the county’s General Fund.
There are many pending appeals from property owners asking for a lower assessed value, Lee said.
Contact reporter Zachary K. Johnson at (209) 546-8258 or zjohnson@recordnet.com. Visit his blog at recordnet.com/johnsonblog.
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©2012 The Record (Stockton, Calif.)
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