Town to update property values (Printed April 13, 2007)
By Ward Peck
Editor
Do you miss the days when home values increased by double digits in a year? For Cape Elizabeth homeowners, fiscal year 2007-2008 will be such a year, sort of.
Beginning this summer and continuing into next winter, the Cape Elizabeth Assessing Department will be busy updating the assessed values assigned to each property in the town. It is the first such update since a major revaluation project was undertaken in 2003. According to Town Assessor Matthew Sturgis, in the four years between the 2003 revaluation and now, home sale prices have increased to the point where the assessed value of the average home in Cape Elizabeth represents only 66 percent of the fair market value. Sturgis said the state requires towns ensure assessed values on properties represent “just value” and that the tax burden is equitably distributed among all property owners. He said the state uses an assessed value/ market value ratio of 70 percent as the lower limit before it begins penalizing a municipality for not keeping assessed values up to date. If a municipality falls below the 70 percent threshold, the state will withhold money in some revenue sharing programs such as the “circuit breaker” property tax rebate, Sturgis said.
While the town’s assessed value has technically fallen below 70 percent, it has not yet been penalized, due to an allowance in the rules that allow the assessor to declare a ratio that is higher than his calculations indicate.
Sturgis said, unlike the 2003 revaluation, the increase in values has been largely proportional throughout town, with he exception of several “hot spots” such as the northeast corner of town and the Two Lights neighborhood. The 2003 revaluation significantly shifted the tax burden toward the waterfront, while the last four years home prices have largely increased at the same rate throughout the town, he said. Sturgis said the northeast part of town, near the Shore Road Fire Station, was largely unaffected by the 2003 revaluation and has started to catch up the rest of town in the last few years.
The assessment update will also differ from the revaluation in methodology. As opposed to 2003, Sturgis said he will not be visiting all 4,350 parcels of land. The work involved in the update will largely be done within town hall and will involved researching and reviewing several sources of data such as home sales and construction costs.
While an increase in assessed value does not necessarily lead to an increase in property taxes, experiences for individual property owners will vary. Those whose assessed home value increases are disproportionately lower than the rest of town will likely see their tax burden decrease, while those whose values increase disproportionately higher will have the opposite experience and still others will experience no change.
The state maintains its own valuation assessments and uses that data to determine education funding and revenue funding formula among other things. According to Town Manager Michael McGovern, Cape Elizabeth’s state valuation of $1.76 billion currently places it fifth in a survey of 10 nearby municipalities but first among those municipalities when the valuation is divided by population. McGovern explained the high per person ranking can be attributed to relatively high home prices in the town and the fact that virtually all developed land in the town is devoted to residential use.
As a result of the high per capita valuation ($196,879 according to McGovern), the state paid for 17.7 percent of the town’s school expenses. Gorham, with a per capita valuation of $88,356, received 65 percent of its education budget from the state.
Editor
Do you miss the days when home values increased by double digits in a year? For Cape Elizabeth homeowners, fiscal year 2007-2008 will be such a year, sort of.
Beginning this summer and continuing into next winter, the Cape Elizabeth Assessing Department will be busy updating the assessed values assigned to each property in the town. It is the first such update since a major revaluation project was undertaken in 2003. According to Town Assessor Matthew Sturgis, in the four years between the 2003 revaluation and now, home sale prices have increased to the point where the assessed value of the average home in Cape Elizabeth represents only 66 percent of the fair market value. Sturgis said the state requires towns ensure assessed values on properties represent “just value” and that the tax burden is equitably distributed among all property owners. He said the state uses an assessed value/ market value ratio of 70 percent as the lower limit before it begins penalizing a municipality for not keeping assessed values up to date. If a municipality falls below the 70 percent threshold, the state will withhold money in some revenue sharing programs such as the “circuit breaker” property tax rebate, Sturgis said.
While the town’s assessed value has technically fallen below 70 percent, it has not yet been penalized, due to an allowance in the rules that allow the assessor to declare a ratio that is higher than his calculations indicate.
Sturgis said, unlike the 2003 revaluation, the increase in values has been largely proportional throughout town, with he exception of several “hot spots” such as the northeast corner of town and the Two Lights neighborhood. The 2003 revaluation significantly shifted the tax burden toward the waterfront, while the last four years home prices have largely increased at the same rate throughout the town, he said. Sturgis said the northeast part of town, near the Shore Road Fire Station, was largely unaffected by the 2003 revaluation and has started to catch up the rest of town in the last few years.
The assessment update will also differ from the revaluation in methodology. As opposed to 2003, Sturgis said he will not be visiting all 4,350 parcels of land. The work involved in the update will largely be done within town hall and will involved researching and reviewing several sources of data such as home sales and construction costs.
While an increase in assessed value does not necessarily lead to an increase in property taxes, experiences for individual property owners will vary. Those whose assessed home value increases are disproportionately lower than the rest of town will likely see their tax burden decrease, while those whose values increase disproportionately higher will have the opposite experience and still others will experience no change.
The state maintains its own valuation assessments and uses that data to determine education funding and revenue funding formula among other things. According to Town Manager Michael McGovern, Cape Elizabeth’s state valuation of $1.76 billion currently places it fifth in a survey of 10 nearby municipalities but first among those municipalities when the valuation is divided by population. McGovern explained the high per person ranking can be attributed to relatively high home prices in the town and the fact that virtually all developed land in the town is devoted to residential use.
As a result of the high per capita valuation ($196,879 according to McGovern), the state paid for 17.7 percent of the town’s school expenses. Gorham, with a per capita valuation of $88,356, received 65 percent of its education budget from the state.
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