After a substantial debate, the Shelby County Board of Commissioners voted to withdraw a proposal to appraise property every two years.
The proposal was initiated by Melvin Burgess, the Shelby County assessor of property, who recommended the 2-year reappraisal plan to aid the city’s budget and to have Shelby County properties reflect market value.
The assessor’s office plays no part in resetting tax rates and is only responsible for reporting on accurate property values in reappraisal, but Burgess’s reappraisal plan received pushback from the Memphis Area Association of Realtors (MAAR) and commissioner Mark Billingsley. Billingsley addressed concerns property owners would not have enough time to negotiate appeals processes if their properties have decreased in value in comparison to their assessed value.
“I’ve never known MAAR to chime in when it comes to the tax base,” Burgess replied to Realtors’ concerns. “If you don’t like it, you don’t like it. They didn’t take the time out to really understand this. That’s why I think there is so much confusion.”
2021 reappraisal notices have been sent to property owners across the county, and Burgess estimated there’s an average 20% increase in values countywide. Burgess added that he only saw benefits in resetting tax rates every two years instead of four.
Memphis Mayor Jim Strickland has said that the city’s current $3.19 rate is likely to drop to between $2.75 and $2.80.
Having property taxes reflect market values will be beneficial to property owners since Shelby County does not currently have the ability to recognize market growth from economic market shifts until several years after it occurs, according to Burgess. This may leave property owners suddenly facing considerably increases in property tax obligations.
Despite the benefits, Billingsley and the Realtors fear issues that could arise, such as how the city’s budget will change using current property tax rates. By state law, the new tax rates have to produce the same amount of revenue for those governments as the current property tax rates.
“The proposal does not address potential inequities,” said Billingsley.
The commission had previously twice delayed the vote.
Commissioner Michael Whaley proposed a pilot version of the proposal before voting on a formal appraisal but added that the logistics would need to be determined. Bilingsley worried that the pilot program would become a permanent fixture without addressing possible issues.
The commission is set to vote on the proposal in the next council session.