LITTLE ROCK — An increase in used-car values and business inventories in 2011 led to a rise in property assessments that will generate 3 percent more tax revenue over 2010, according to reports released last week by the Pulaski County treasurer and the county assessor.
“I think we’re in an enviable position here that many counties would love to be in,” Treasurer Debra Buckner said, calling the county’s growth stable to moderate.
The total amount assessed for 2011 is about $1.3 billion in personal and business property, and $4.8 billion in real estate, a report from the assessor’s office shows.
According to a report from Buckner’s office, the 2011 roll could generate $424 million in taxes due compared with $412 million in 2010.
The increase on the tax roll means local taxing entities will see more money this year, Buckner said, noting that the Little Rock and Pulaski County Special school districts could see about $4 million more, while North Little Rock could see about $500,000 more.
“That’s if we collect 100 percent,” she said. “However, we never collect 100 percent. We typically collect between 93 percent to 95 percent of all taxes owed.”
Joe Thompson, chief assessment administrator, said the 2011 assessments include 429,456 vehicles ranging from cars and trucks to boats and trailers. The report puts the vehicles’ value at about $509 million but does not break out the number of new versus used automobiles.
To calculate property tax, the property’s market value is divided by five, and that number is multiplied by the total millage rate of the area.
A person who lives in the Little Rock School District, which has a millage rate of 0.070500, would have an assessment bill of $282 for a vehicle valued at $20,000.
“People are buying fewer new vehicles so used vehicles have increased in value, and that’s making the personal part of the tax go up,” Thompson said. “They’re not only buying more used cars, but they’re holding onto used cars longer.
“Five years ago, you would expect a car’s value to depreciate, but this year, it might be worth the same as the previous year,” Thompson said. “We’ve even seen a couple that increased in value.”
Michael Pakko, the state economic forecaster for the Institute of Economic Advancement at the University of Arkansas at Little Rock, said, “It’s always good news to hear values are increasing.”
“I don’t find it surprising to hear that we’ve had at least modest increases, given that 2009 was the low point of the recession and the end point officially,” he said.
Pakko said the federal Car Allowance Rebate System commonly known as “cash for clunkers,” also drove up the value of used vehicles. The federal program ran from July to late August in 2009 and provided cash incentives for trade-ins of old cars that had poor gas mileage.
“Cash for clunkers removed a lot of used cars from the market,” he said. “The cars traded in were sent to the junkyard rather than entering the used car market.”
Pulaski County’s $1.2 billion in combined business property and personal property assessments in 2011 was up by about $69 million. However, this category saw big losses in value in 2009 and 2010 compared with previous years.
In 2010, values dropped $56 million to about $1.2 billion compared with 2009’s $1.3 billion, and 2009’s values were $93 million less than 2008’s.
Out of the 14,436 Pulaski County businesses assessed, the top 10 on the books saw a combined inventory increase of about 20 percent in 2011, further boosting the amount of increased valuation the county would see over 2010, Thompson said.
The growth is a sign of recovery, Thompson said.
He said the top 10 business accounts had about $89 million in assets in 2010 compared with about $104 million in 2011.
“While real estate went up in 2010 - and tends to go up 3 percent to 4 percent each year - what went down on the business side negated most of what went up in real estate,” he said. “And it still hasn’t recovered as much as it lost in the previous year.”
An example of that slow recovery can be seen in 2010’s loss of 8,147 total accounts, Thompson said. Nearly half that number of accounts, 3,981, were added to the 2011 tax rolls, Thompson said.
“That could be businesses that reopened or it could be new businesses,” he said.
The $4.8 billion in real estate assessments reflects an increase of $127 million in 2011compared with a $117 million increase in 2010, when the county assessed $4.6 billion in real estate, the assessor’s report shows.
Joey Dean, vice president of economic development for the Little Rock Regional Chamber of Commerce, said that despite the recession, central Arkansas saw some growth in the business community.
“We have worked with companies that have created over 7,300 new jobs, new annual payroll of over $285 million and capital investment in excess of $1 billion since 2005,” he said.
“Even in this economic downturn that’s been so difficult, we have had some of the best economic development success in central Arkansas, recruiting new companies and growing the ones that are already here,” he said.
Looking back two decades, the 2011 tax revenue figure is 152 percent higher than 1992’s when the county tax roll showed $168 million in revenue, the treasurer’s report shows.
According to the report, the amount of growth has varied widely. For example, the increase from 1999 to 2000 was 9.2 percent when tax bills went from $227 million to $248 million.
Gains dipped to 5 percent growth in 2001 and 2.3 percent in 2002.
The amount of revenue increase went up again in 2003 and held steady at around 5.5 percent until 2005, which saw a 7.7 percent increase over 2004. It dropped to a 6.4 percent increase in 2006 and spiked in 2007 with a 9.8percent increase. In 2008, the increase was about 7.2 percent then fell to about a 1.8 percent increase in 2009 and 1.1 percent in 2010.
Thompson said the economy drives those swings, and he noted that the increases of less than 2 percent are the result of business property losses in 2009 and 2010.
“There’s pretty consistent growth in the real estate every year,” he said. “But in 2009 and 2010, when we were still in the worst part of the economy, businesses quit keeping inventory on hand. They were doing whatever it took to survive. I wasn’t here in 2000, but I would expect such an increase. We had a very good economy then.”
Another factor that’s contributed to the growth of the tax roll is that the assessor’s office has done a better job of getting assessments from businesses, Thompson said.
In the past, he said, some had fallen through the cracks because they appeared to have gone out of business.
“We have done a whole lot of work just making sure that if they’re still in business, they rendered an assessment,” Thompson said. “In the past, when we mailed [businesses] letters telling them it was time to assess, if the letter came back, we might have assumed they were closed. We’ve added additional people to that department to go the extra mile to make sure, and it turned out that some weren’t closed.”
Buckner’s office has also stepped up efforts to collect taxes from businesses. Under revisions to state laws that went into effect in July, she collected about $80,000 in delinquent business taxes in just a few weeks.
Act 821 of 2011 made it clear that people owing late taxes can’t just sell their businesses or change the names and get out of paying. It also laid out stiff penalties for those who try, while Act 555 of 2009 allows county collectors to sell a business’s assets on-site. The laws have been effective tools in collecting what’s owed to the county, Buckner said.
As for this year, she said all tax bills should be delivered by the end of the month and noted that Oct. 15 is the deadline to pay.
“It’s due when you get it,” she said. “But it’s not delinquent until after the deadline.”
Front Section, Pages 1 on 02/13/2012