Walton Continues To Sound The Alarm About Property Values Increasing
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DAVE’S WORLD
By David Howell
I know I am beginning to sound like a broken record on this topic, but here we are again. The upcoming tax cycle for county supervisors, trustees serving on the Water Valley and Coffeeville school boards and alderpersons in Oakland, Coffeeville and Water Valley may be one of the most interesting in quite a while.
Yalobusha County Tax Collector/Assessor Michael Walton is finalizing assessments for all real property in the county, work that should be completed by early summer to start the annual tax cycle. Walton will present the tax rolls to the county in July. The tax cycle continues as supervisors (and aldermen and school trustees) hammer out the projected expenses and revenue before the budgets are finalized for the new fiscal year.
While working on these assessments, Walton has repeatedly warned us that the taxable value (defined as true value) of our properties will increase by an anticipated 20-plus percent this year. Walton is visiting each board providing a break-down of the projected increases. Last Tuesday night, April 22, he attended the Water Valley School Board meeting. Walton reiterated that the property index, or a benchmark used to track the performance of the real estate market, must increase for the coming tax year. This index is used as part of the formula to determine the taxable value of all real property in the county and the taxable value of all property in the county will increase.
During the school board meeting, Walton used his house to show an example of the projected increase. This year the real value, or taxable value, of his house is $155,787. The assessed value for a homeowner is 10 percent of real value and for Walton that is $15,579. Using the Water Valley School District’s current tax rate of 57.60 mills, Walton paid $897.35 in school taxes this year.
Next year with the increase, the real value or taxable value of his house will jump to $189,620. If the Water Valley School Board keeps the same tax rate (57.60 mills), he will pay $1,092.21 in school taxes in 2026. And that is just school taxes, county taxes and municipal taxes will similarly increase.
Walton recommended that school board members lower the tax rate, and used 50 mills as an example. Using the $189,620 taxable value of his property, he explained to school trustees that if they lowered the tax rate to 50 mills he would pay $948.10 in school taxes – a small increase.
This is it in the nutshell, now for how we got in this position. First, Walton has repeatedly explained that he is required to set the taxable value, or true value, within 80 percent or higher of actual market value. Everyone knows market value of real estate has increased, so let’s look at the three main catalysts in this conversation.
1) Soaring real estate prices and inflation means property values have increased in recent years.
2) The true value (taxable value) for the vast majority of real property in Yalobusha County was already undervalued before Covid and inflation. Walton has repeatedly explained that property values in Yalobusha County are at the bottom of the barrel.
3) The property index (remember the reference to index from earlier in the article) set by the state increased to 1.25 for north Mississippi. The property index value in Yalobusha County is currently 1.08, and must increase to at least 1.15, as it must be within 10 points of the state property index.
Admittedly I know very little about this property index. Walton explained that it is the measure of how the price of residential housing changes over time and is tied to the Consumer Price Index.
Rest assured, there could easily be some finger pointing when all this shakes out and it comes time for the tax bills to be mailed out at the end of the year. Walton is on a mission to inform all of the taxing authorities in the county (supervisors, school trustees, alderpersons) that without a significant decrease in the tax rate (or millage rate), property taxes will increase substantially. Walton has repeatedly explained that setting the tax rate is not his job, instead he is charged with determining the value of property taxed in the county.
Local CPA Joe Black also has solid advice on this subject – each governing board should first determine the dollar amount needed to operate for the fiscal year and then set the tax rate accordingly. It would be tempting to instead look at the possibility of taking in additional revenue. I think Joe and I would agree that all of our taxing authorities in the county are fiscally conservative. I have missed very few Board of Supervisor meetings during the last 21 years, and have witnessed far more belt-tightening than excess spending during budgeting.
But there is no question that inflation has drastically increased the cost of doing business for city, school and county governments and the entities probably need more money to operate. The million dollar question – how much is enough?
