MEQUON'S ASSESSMENT FOLLIES

By this time all Mequon property owners have received the City Assessor’s Official Notice of their new assessment which is an estimate of the full (100%) "market value" of their property as of January 1, 2009. "Market value" is defined in the 2009 Wisconsin Property Assessment Guide as: "The dollar amount for which a property would be sold by a willing seller to a willing buyer under normal market conditions."

Considering single homes, including town house condominiums, it comes as no surprise that both the State and Ozaukee County are on the record stating that such properties lost value in 2007 and 2008 and a further reduction is forecast in the State’s Department of Revenue equalized value report due out in August 2009. The Wall Street Journal, however, reports that a small up-tick is underway in the nationwide home sales market thus far in 2009.

Since the City Assessor states that the January 1, 2009, market value assessment is based on sales in 2007 and 2008, one could logically conclude that the majority of 2009 sales would occur near or above the 2009 market value assessment.

Surprise, surprise — that is not the case at all. A sampling of single homes and town house condos sold since January 1, 2009, show that about 90% were sold for below their 2009 market value assessment, with town house condos taking the biggest hit at some 11% below their 2009 assessed market value. Single homes sold at about a 6% deficiency to their 2009 market value assessment. The only reasonable conclusion from this analysis is that the City Assessor has over-assessed single homes about 6% and town house condos some 11%, all contributing to the average 18% increase imposed on all Mequon property.

Now, the City Assessor states that a higher assessment does not necessarily mean an increase in property taxes, but is that really the case? First, with different classes of property (i.e., town house condos vs. single homes) assessed at a greater percentage than warranted, that class will be paying more than its fair share of the property tax. Second, with all Mequon property over assessed in comparison with other property in Ozaukee County, Mequon property owners will be paying more than their fair share of both the County and State imposed property tax. Lastly, an over assessment condition will make it likely that Mequon will be subject to the Ozaukee County Library tax, for which Mequon is currently on the bubble. To avoid the Ozaukee County Library tax, Mequon would have to increase its funding to the Weyenberg Public Library, beyond its needs, to meet the exempt formal criterion. In either case, Mequon property owners will be zinged with an additional property tax component.

The solution to this dilemma is for the City Assessor to first resolve any assessments which property owners can show are incorrect in comparison to similar properties. Then the City Assessor should reduce all residential assessments by the percentage the data indicates that category has been over assessed. (i.e., condo town houses vs. single homes, etc.) That will result in an overall assessment that is on-the-money meeting the market value definition of a value that a willing seller and buyer would agree on. This solution will result in a fair allocation of Mequon’s residential property taxes to each category – the City, the County and the State, which, after all is the goal of the assessment program.