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By Max Erikson
Reporter 

Committee, Assessor at odds on Net cash rental

 


The Open Space Advisory Committee meeting on Feb. 21 brought many members of the local agricultural community to the county courthouse to discuss disagreements with the Klickitat County Assessor’s determination of the “Net cash rental” for property owners and farmers, which sets the 2018 property values and tax obligations.

The “Net cash rental” is “the average rental paid on an annual basis for the land being appraised, and other farm and agriculture land of similar quality that is available for lease for a period of at least three years without unreasonable restrictions on its use for the production of agricultural crops” as stated in RCW 84.34. The assessor’s office uses this information to set the assessed values that farmers and land owners pay taxes on. The current “Net cash rental,” or earning capacity, is determined by the assessor with the advice of the advisory committee, as provided in RCW 84.34.145.

Under the Open Space Taxation Act of 1970, property owners can have their open space, farm and agricultural, and timber lands valued at their current use rather than at the highest or best use. Under this program, landowners and farmers enter into agreement under a lease that determines the cost obligations and return value of crops produced on the land. The “Net cash value” is determined on leases that farm and agricultural land pays annually— that can also include government subsidies—based on the earning or productive value of the land.

The purpose of the meeting was for the advisory committee to voice their concerns and disagreement with the assessor’s office process of setting the 2018 assessed value rate. Using income received from crops and costs used to create crops, plus the expense obligations for both farmers and land owners, helps set the “Net cash rental” and ultimately the assessed property values.

The disagreement is about what statistical data is being used to assess property values. The advisory committee contends that the county is not using the correct attribution of statistical numbers to come up with an accurate assessed value. The committee thinks that the assessor’s office is not using the information presented to them by the committee as laid out in the RCW.

The advisory committee is a five-member committee appointed by the Klickitat County Commissioners to represent the farming community and to advise the assessor on implementing assessment guidelines for open space, farm and agriculture, and timber land. The committee advises the assessor on typical crops, land quality, and “net cash rental” assessments to assist the assessor in determining appropriate values.

Unlike in the past, this year the accessor’s office is sending request letters to farmers and landowners for the release of leases for the purpose of getting more information to determine property values. County Assessor Crista Schroder says that the information in the leases will help with a more accurate property value assessment. Schroeder says she understands that it has been nearly 20 years since this information has been requested, causing concern for some farmers who wonder if the request is even necessary.

”I think their biggest concern is government in their business,” Schroder says. “It isn’t mandatory to show terms of the lease, but it will help me to assess the typical property values more accurately and what the overall averages will be my job here is to work for everybody. We are very conservative to our approach and think through what we are doing. We are very aware of how what we do impacts everybody.”

Schroder says that there has been little or no change for many years on how property values were assessed, and now the assessor’s office is running values through the whole assessment process. For many years assessed values were rolled over from the previous year. This renewed evaluation process has caused an increase in property values and in turn has raised the tax obligation of farmers and land owners.

“The tax increase is because valuations have not been changed for many years and we are now updating information and data,” Schroder says. “Cap rates change every year, so assessed value should change every year and in many cases that was not being done. This is a way to get it current.”

The Department of Revenue gives a new cap rate every year. It is a component of the average mortgage on a piece of property, and each county gets its own tax component. Net income is divided by the cap rate which determines the assessed values. The current cap rate is 5.49 percent.

The advisory committee is at odds with the new valuation process that the county is implementing and are in stark disagreement with the assessor’s office. In expressing their views the committee unanimously passed the following motions.

• To avoid inaccurate and unfair assessments:

It is the position of the Advisory Committee that if insufficient time or data is available to accurately determine “net return” to property owner for the 2018 assessments for 2019 tax year, the rental rates of 2016 shall be used for tax year 2019.

• It is the opinion of the Advisory Committee that the information used to create the 2017 assessments for 2018 tax year were inadequate to represent current use and therefore the resulting increase of assessments were unjustified.

Members of the advisory committee think that their expertise, education, and combined experience has provided the county assessor with the best and most accurate information that should be used in assessing the 2018 property values. The committee feels strongly that the assessor is ignoring the committee’s recommendations that the assessor should rely on. Though the recommendations from the committee are taken into consideration, the assessor’s office says it is not mandated to comply with those recommendations.

One advisory committee member stated: “We all know agriculture, we all know numbers. As a group we have a lot of credentials and experience. The assessor’s role is to get the numbers as truly accurate as possible and the committee provides those numbers and that data.”

The assessor’s office and the advisory committee will continue discussions in the coming months, with meetings set for the first Wednesday of every month starting in April.

Schroder says that her door is always open and she welcomes calls from the community whom have questions about the 2018 assessments, and encourages farmers to come to the future meetings.

“I’m really trying to reach out to the farmers to come to these meetings,” Schroder says. “If people have questions or concerns I want them to call our office.”

To reach Schroder, call the County Assessor’s office at 773-3715.

 

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