FORT SMITH -- Sebastian and Logan counties experienced noticeable increases in property values when compared with five years ago.
They are just two of 19 counties in Arkansas taking part in state-mandated reappraisals this year. Among their ranks are Bradley, Calhoun, Clark, Crittenden, Cross, Independence, Johnson, Lincoln, Miller, Monroe, Ouachita, Prairie, Sevier, Sharp, Van Buren, Washington and Woodruff counties, according to the state Department of Finance and Administration.
Sebastian County Assessor Zach Johnson said via email that the county assessor's office mailed out slightly more than 38,000 notices of value changes for properties whose values have increased from the last reappraisal cycle, which took place in 2015. This translates to about 66% of the approximately 58,000 taxable parcels in the county.
Johnson said there was a 9% increase from the 2015 total abstract, or value of all types of property during that year, versus the 2020 total abstract. However, this could change as errors are discovered and corrected, such as square-footage issues and acreage amounts, as well as any values that are adjusted through an appeals process.
In an email July 16, Logan County Assessor Shannon Cotton said the total real estate value throughout Logan County, which is also on a five-year property reappraisal cycle, increased 14% since 2015. However, this does not mean that every real estate parcel went up.
Cotton said that "45% of properties went up in value and will receive a notice, that means 55% either stayed the same or went down in value."
This percentage of increase is estimated to raise real estate property taxes by about $250,000 for the 2020 tax year payable in 2021, thereby increasing revenue for the county, Cotton said. This will affect any property owner who had a value increase.
Under Arkansas law, whether counties reappraise property on a three-year or five-year cycle is determined by the amount of growth a county experiences. If a county grows by less than 15% in a three-year cycle, it goes to a five-year cycle. If a county grows more than 25% in a five-year cycle, it reverts to a three-year cycle. Property taxes in Arkansas largely go to schools.
Johnson said it is difficult to determine the reappraisal's overall effect on actual property taxes because each one must be considered on a case-by-case basis due to capped limitations provided by Amendment 79 to the Arkansas Constitution.
Cotton said that according to Amendment 79, property tax increases come in at 5% per year for homestead properties and 10% per year for non-homestead properties. These increases continue on an annual basis until the property reaches full assessed value.
Other protective measures provided by this amendment, Johnson said, include taxable assessed value freezes for qualifying homesteaded properties for those who are either 65 years of age or older, or 100% disabled.
"There are a few exceptions to these limits on increases, as any new construction or changes to the property itself will constitute an increase to the taxable assessed value that is not limited, as well as any property that sells in an arm's length transaction," Johnson said. "The property that sells will have all capped limitations removed the following lien date (January 1st of the year following sale date) and will be increased to full assessed value per the established values of the assessor's office."
Johnson added that any increases to established millage rates will also affect the overall tax bill of both frozen and non-frozen assessed values. The tax bill is equal to the taxable assessed value multiplied by the millage rate.
The first four years of the Sebastian County reappraisal process, Johnson said, involve a complete canvass of all parcels in the county to ensure proper data is on file. Basic sales and rental/income information is performed as part of the canvassing, which can be done in-house or contracted out.
In the fifth year, final analysis of data is finished and values are established by July 1. Notices of value changes are mailed 10 business days into July, with the informal appeals process between property owners and the assessor's office or contracted representative taking place July 1-31. The 2020 total abstract is currently in the hands of the Sebastian County Equalization Board, which is responsible for any changes to established values.
The Sebastian County notice of value change issued this year states that property owners have the right to informally review the reason for the change and new valuation with an appraiser. They also have the right to appeal the new valuation to the Sebastian County Equalization Board, even if it was changed during an informal hearing. Those who wish to schedule an appointment with the board are asked to call the Sebastian County clerk's office at (479) 782-5065 on or before Aug. 17. The board will be in regular session through Sept. 30. Property owners can also appeal the equalization board's decision to the county court and then to the circuit court.
Cotton described similar instructions on the back of the notice of value change for Logan County.
Information for this article was contributed by Doug Thompson of the Northwest Arkansas Democrat-Gazette.