By SHANNON HAUGLAND
Sentinel Staff Writer
Sitka’s residential taxable value went up by 18 percent, following the reappraisals of about 500 residential properties, the city assessment office said.
The overall taxable value of the community went up by 3 percent.
City Assessor Larry Reeder said most of the residential properties hadn’t been reappraised in 8 to 12 years, with a few that hadn’t been reappraised for taxes in 23 years.
“Even though the inventory of the properties may not have changed, the market has, which is why we’re reappraising,” he said.
The assessed valuation notices went out March 15. The deadline for filing an appeal on city assessments was Monday, and Reeder reported that only one has been received so far. The Assembly, acting as the Board of Equalization, hears appeals, which will take place May 1 unless changed by the Assembly to May 9, when the attorney is present, city staff said.
Alaska statute requires properties to be appraised at their “full and true value” but determining that is difficult here, Reeder said.
True and fair market value is the amount a willing buyer would pay a willing seller, “taking into account all uses to which the property is adapted and might be applied,” Reeder said, quoting state law.
In many communities across the U.S., this is done through using sales data and applying upward and downward trends on similar properties. Alaska is a “nondisclosure state,” which means the sales price of real property is not recorded and available through public record.
“Here it’s extremely challenging,” Reeder said. “Figuring out what the market is doing is very, very difficult here.”
He said this year he received the sale price information for about one-half of the 150 residential property sales in 2022. He regularly checks the real estate pages to see the asking price, and determine when sales occur. He approaches buyers and sellers after a sale occurs, but reporting the price is voluntary.
Reeder said he did get a number of questions after the value notices went out last month, with 15 asking for a review of the appraisal. Most people who had questions were satisfied with the answers, which included the information Reeder used to make the valuation. One filed a formal appeal, the first during Reeder’s three-year tenure with the city.
He added those with questions about their property values can always call him at city hall, 907-747-1820.
The city relies on property tax to cover a portion of the general fund budget, which includes schools, police, fire and public works. In fiscal year 2023, property tax revenues are expected to be $7.24 million out of a general fund budget $40.5 million. In fiscal year 2024, the city is budgeting to receive $7.35 million.
Sales tax receipts have been double that in recent years, and the city has started relying more heavily on that source to cover general city expenses, the city finance office said.
“You see sales tax growing but other areas are flat or shrinking,” Finance Director Melissa Haley said.
She noted that the higher assessments in recent years are offset by senior citizens receiving state-mandated property tax exemptions, which makes the first $150,000 of a property value exempt.
In fiscal year 2024, the expected revenues of $7.78 million will be offset by $631,000 in exemptions. Haley said that represents more than $100 million in property that is tax exempt due to senior and disabled veteran exemptions. That’s up from the $560,000 in exemptions last year.
Another reason the sales tax has become increasingly important is the decline in state assistance for public works projects and general government expenses.
The Assembly annually approves the tax rolls, which includes dedicating 4 mills ($4.9 million) from property tax to schools. The Assembly has agreed to fund schools at $8.827 million, which means the city also needs other sources such as sales tax to cover its commitment.
In preparation for the Board of Equalization meeting, the state will give a training to board members (Assembly members) 6 p.m. Thursday at Harrigan Centennial Hall. The meeting is open to the public.
