Appeals of Property Tax Assessments on the Decline

With Orange County’s real estate market gradually emerging from a five-year slump, property owners who challenge their tax assessments are facing fewer delays in scheduling review hearings.

The backlog in appeals for property tax reductions has dropped from 61,000 cases last spring to 22,000 cases this month. Moreover, the number of property owners seeking appeals hearings has slowed considerably over the last two years, and officials expect a further drop this year.

Experts said that as property values stabilize, and in a few cases start climbing again, homeowners and businesses feel less need to challenge the county’s assessed value of their parcels.

“I think we are seeing these reductions because the economy is getting better and values are being restored,” said Suzanne Privette, assistant clerk of the Board of Supervisors, which schedules assessment appeals hearings. “Our sense is that the numbers are headed back toward normal levels.”

The public requested 32,500 appeals hearings in 1995, down from 36,072 in 1994 and 41,419 in 1993.

The turnaround is good news for the county, which has struggled--sometimes unsuccessfully--to keep up with the surge in demand for hearings that came with the economic downturn of the early 1990s.

The recession was especially hard on new homeowners who paid premium prices for their property at the height of the market, only to watch helplessly as values tumbled.

The number of requests for appeals hearings jumped from 9,226 in 1990 to 41,419 in 1993 as property owners demanded that their property assessments be reduced to match the declining market.

Grappling with the wave of appeals, the county in 1994 inadvertently let the two-year deadline lapse on more than 100 cases, meaning that the property owners’ proposed values automatically prevailed. The snafu cost the county about $1.6 million in lost tax revenues.

The highly publicized incident focused attention on the backlog and prompted officials to take action. The Board of Supervisors established a third hearing appeals board and supported efforts by the clerk of the board’s office to computerize the appeals scheduling system.

Now, a computer system tracks the deadlines for all appeals and generates letters informing property owners of their hearing dates. Before, all the scheduling and file work was completed by hand.

“Envision 40,000 file folders and manually going through them. It was a tremendous amount of paper and very time consuming,” Privette said. “We have a much better handle on the work than we did before.”

The office is now able to finalize all appeals at least 60 days before the deadline. Before, some appeals came to the hearing boards just two weeks before the two-year limit was to have expired, officials said.

Appeals board panelists agree that the innovations, combined with the drop in the number of appeals requests, has made a substantial difference.

“There is much less antagonism and much less stress involved,” said panelist Mary Aileen Matheis. “I think the process has really been enhanced.”

Panelist Kent Pierce praised the county for grouping similar types cases on each agenda, making it easier for the board to focus on how to calculate the values.

But Pierce said the process sometimes runs into trouble when the clerk of the board’s computer system contains different information than data from the assessor’s office, which defends the property assessments at the hearings.

When the data conflicts, the hearing must be delayed a few minutes while officials search for the correct information.

Still, Pierce and others agree that the county has been able to iron out other problems in the appeals process.

In a move that outraged supervisors, Assessor Bradley L. Jacobs announced in July 1995 that his office would no longer defend all property valuations at hearings because of staffing shortages in his office.

But Jacobs said the policy lasted only a few weeks, and that he and other county officials were able to devise a new schedule that allows the assessor’s office to defend all valuation disputes that come before appeals boards.

“We’re handling it fine now,” Jacobs said.