Tax valuations increase on ag and commercial land

Property owners may have experienced a moment of surprise when opening their valuation statements this year. County Assessor Theresa Curren says increases have occurred for two distinct reasons and urges anyone unsure about their valuation to visit her before the May 13 deadline.

The first of the two causes relates to agricultural land, she says, and is a result of legislation that passed in 2018. Senate File 148 essentially proscribed that, for each habitable structure on ag property, one acre must be assessed as residential land.

“That went through the legislature in 2018, then the Wyoming Department of Revenue (WDR) rules changed to compensate for that,” Curren says.

“For 2019’s tax, we had to basically look at the aerials of every single ranch that we have and we had to actually measure out how many acres compensate all of the buildings.”

The new rule applies to any structure that could be inhabited, including mobile homes, houses and ranch hand houses. If an ag property only has one house, she says, then just a single acre of residential land would be assessed, “Unless you have that area fenced off and you’re not using that area for agricultural purposes – your cows can’t come up to your porch and graze. Then, whatever you’ve fenced off is what I’m going to measure.”

Similarly, if several habitable buildings are encompassed in one area, the assessor says she would simply measure that area. However, if the buildings are spread out across a large swath of land, each would need to be assessed individually.

Agricultural buildings are also affected; however, these are not evaluated as residential.

“We have to look at how much of the acres encompass your agricultural buildings – your barns and things. When we measure those out, we put them on what’s called ‘farmstead’, which means that that acreage is going to value at your highest acreage of soil type on your property,” she says.

For example, if you have two acres of barns and silos and 60 percent of your land is considered irrigated, those two acres will be valued at the rate for irrigated land.

This represents a significant change for Crook County, where farmstead was not previously counted, each property was automatically allotted two acres for a house and that acreage was valued at what the average agricultural acre was selling for, she says. Residential land is assigned much higher values.

“Now the rules have changed so every habitable structure has to be valued at residential value, I’ve had to change the Land and Economic Area (LEA) that it pertains to,” she says.

“You’re going to be valuing just like every other residential property [in that LEA], except you’re only going to be at that one acre while they’re valuing at 30 or five acres, or whatever it happens to be.”

This change had to be implemented for all 2000 of Crook County’s agricultural properties, says Curren, which in turn forced a reevaluation of the ‘neighborhoods’ against which valuations are made.

“In order to value a house, it has to be in a neighborhood, which is comparable properties. On ag, it wasn’t that way – it was replacement cost new less depreciation,” she says.

The State Board of Equalization (SBE) stressed to all 23 counties this year that every house has to have a neighborhood and the assessor must use at least five sales to value it.

“Since I was touching every single account anyway, I had to make sure that every single house had a neighborhood that was associated with it,” she says. “In doing that, I found a lot that weren’t being assessed at market value. In turn, agricultural properties have increased in assessment because of that.”

All of this, Curren says, has led to sharp increases for some agricultural property owners.

Commercial land

“Commercial land all over Crook County has increased and that is due to not having enough vacant commercial sales to value them,” she says.

It’s a problem the SBE and WDR has identified all across Wyoming, she says: all counties have their commercial values undervalued due to not having enough sales and, without sales, it’s not possible to make regular adjustments to valuations.

Curren says she took her cue from peers in other counties to find a solution, because the SBE essentially informs assessors that a problem exists and then leaves the assessor to figure out how best to handle it.

Curren opted to view all vacant land sales the same, whether it is commercial or residential. “It doesn’t matter if it’s residential or commercial, it’s still vacant and I’m still going to use that sale,” she says.

“A lot of places went down, but a lot went up too because they were being over-assessed from having sales I don’t know how long ago. I have the sales now to defend my values by combining residential vacant land with commercial vacant land.”

Future changes

The changes to agricultural land that have appeared on this year’s valuations come from a legislative decision made a year ago, because assessors must work from what was in place on January 1 each year. A more recent change, however, was voters’ decision to allow Crook County Senior Services District to request mill levy funding.

“Your estimate of taxes is off the last year’s mill levy, that’s a statute we have to go by even though we know there’s going to be an increase because of the new Crook County Senior Services District,” she says.

The district will hold board hearings in May and June to determine how many mills to request and this will be brought before the county commissioners in August. After that date, the mill levy for the new district will be reflected on property tax bills.

Individual cases

Speaking from his own experience, that of friends and family and a number of calls he has received from constituents, Representative Tyler Lindholm says the increases appear to have affected quite a few property owners.

“There are a lot of people who saw a lot of increase on their tax roll that doesn’t come from any extra mill levies or any action from the state,” he says.

“The best advice I’ve given people is to call their assessor and find out what’s going on with their property and what’s going on with the valuation change.”

Curren agrees and strongly encourages anyone who has questions about their valuation to contact the Assessor’s Office. If, for example, a property owner feels measurements made are incorrect or a building has been misidentified as residential, these can be adjusted accordingly.

“We had to do what we had to do because of our rules, but if we are wrong then we can change it,” she says.

Curren notes that it may not be possible for people to figure out whether their tax valuation is correct using just the information available to them. In the Assessor’s Office, she explains, there are other rules that need to be followed to make sure valuations are in compliance.

“I also have to be in compliance with the State Board of Equalization and the Department of Revenue concerning way more than just the median. I’m looking at the coefficient of dispersion, I’m looking at the price-related differential – all of these things have to be in compliance with their ranges,” she says.

“I cannot change a valuation unless I’m in compliance. It’s complicated, for sure, and that’s why it’s good for each person to come in because everybody’s house and situation is different.”