Even though the first wave of county reassessments reported in 11 Mississippi counties reflects a pattern of healthy growth, most homeowners and manufacturers were not expecting such a hefty appraisal increase.
“The increase has averaged 31% over the 11 counties done so far in Class 1 (residential) properties and has created a substantial increase in Class 2 (commercial, industrial) properties,” said Lester Harrington, deputy commissioner for the Mississippi State Tax Commission.
Of Mississippi’s 82 counties, the remaining counties will be reassessed by the end of 2002 — 34 counties this year and 37 next year, Harrington said.
“The constitution provides that all property is supposed to be valued at true value,” he said. “The old system allowed a greater divergence from being 100% accurate, and the revised system has a smaller allowed deviation from the mean, and is requiring a greater degree of accuracy. Updated numbers are creating the difference in assessment.”
The 11 counties that have been adjusted include: Calhoun, Franklin, Hancock, Harrison, Jeff Davis, Leake, Lee, Lowndes, Neshoba, Pike and Yazoo.
Britt Herrin, executive director of the Pike County Chamber of Commerce and Pike County Economic Development Foundation, where Class 2 property increased 16%, said reassessed values haven’t been an issue — yet.
“I haven’t heard any comments from manufacturers,” Herrin said.
So far, the heftiest increases for Class 2 property have been reported in Harrison County, with an 81% increase, and in Neshoba County, which received a 64% increase. The average increase in Class 2 property has been 33%.
Jerry Frazier, executive director of the Yazoo County Chamber of Commerce, said it’s taken a toll on downtown merchants who have already “suffered limited sales this past year and are seeing taxes go up considerably.”
“Buildings are being assessed for more than they can be sold,” Frazier said.
Hinds County Tax Assessor Mike Barnes said the manual had not been revised since the early 1980s, which, until then, was based on 1946 cost factors. The new manual is based on 1996 cost factors. Rule 6 of the Mississippi State Tax Commission mandates updated appraisals every four years, he said.
“Upper end properties have not been valued at their true market value for quite some time,” Barnes said. “The reappraisal gives better flexibility for reaching true value on upper priced property.”
Hinds County is not scheduled for reassessment implementation until 2002, Barnes said.
“Right now, Harrison County is the most highly assessed county in the state, at about $1.5 billion, but conceivably, Hinds County will be No. 1 when they complete their reassessment,” said Bill Mitchell, vice president of economic development for the Mississippi Gulf Coast Chamber of Commerce.
When compared to new property, the reappraisals “seem pretty close to the mark,” Mitchell said.
“The municipalities in the counties have reduced their millage to compensate, which can be done when you have that type of growth,” Mitchell said. “Overall, it hasn’t seemed to have a major impact, because everybody expected property values to go up from the last reappraisal because of the time gap, strong economy and the growth that we’ve had. But the exception has been for people over 65 who are on fixed incomes. With the reappraisal, their home values have gone up, homestead exemption has remained the same, and for the most part, so has their income.”
Many retirees are now being forced to pay property taxes for the first time in years. Calhoun, Harrison and Leake counties have reported the greatest average increases so far, approximately 42%. Pike and Franklin counties reported the smallest increases of 13% and 15%, respectively.
To offset the increase, the Mississippi lawmakers are mulling a bill that would keep property taxes down for residents on fixed incomes. Last week, the House endorsed HB 1565, which would increase the exemption from property taxes from $60,000 to $75,000, by a 122-0 vote. At press time, the bill was awaiting action in the Senate.
By comparison, Class 3 property (personal property) increased an average of 15%; Class 4 property (utilities) increased an average of 4%; and Class 5 property (automobile tags) increased an average of 6% in the 11 reporting counties.
Contact MBJ contributing writer Lynne Wilbanks Jeter at firstname.lastname@example.org or (601) 853-3967.