Cass assessor fears added tax burden will hit homesteads

WALKER -- State legislative actions this year could shift a lot of the property tax burden from seasonal properties to homesteaded ones, said Cass County Assessor Steve Kuha.

Valuation cards people receive this time of year show values to be used for computing next year's taxes. Through this year, state legislation requires that statements show estimated market value and limited market value.

For counties like Cass where values have escalated dramatically in recent years, the Legislature chose to limit the amount of value increase each year that could be used for computing property taxes, Kuha told the county board Tuesday.

Thus, most residential property owners actually are paying property taxes based on a much lower amount (limited market value) than the actual (estimated market value), he said.

About 20 percent of the actual market value of Cass County property currently is not being used to compute property taxes, he added.

The legislative limited market value law ends at the close of 2001. Kuha expects the Legislature to enact legislation to phase it out over three years, but, in reality, without new legislation, it could simply end this year.

That would mean a major shift to properties that have benefited from market value increase limits for tax purposes the last decade, Kuha said.

Overall, Cass' market value rose from $2.4 billion in January 2000 to $2.9 billion in January this year, he said.

New construction, he said, has leveled off in the county at about $66 million per year. There was more new residential construction in 2000, compared with a higher amount of commercial construction in 1999, he added.

There were 270 new homes recorded in January 1999 valuation figures over the previous year, 347 in January 2000 and 375 in January 2001, Kuha said.

A second issue before the 2001 Legislature proposes to drop the percent of valuation paid in property taxes on undeveloped lakeshore for lots involving 200 feet or more of shoreline from 1.6 to .5, he said.

This could mean an $11 million shift from property taxes currently being paid by undeveloped property owners to residential and commercial property owners, Kuha said.

It would cover not only undeveloped land 400 feet from lakes, but also along streams and wetlands, he said.

Cass County Board members Tuesday decided to study a revised version of this legislation before taking a stand on the issue and sending a letter to legislators following their April 17 board meeting.

Kuha said the proposal is designed to protect undeveloped lakeshore.

County Administrator Robert Yochum told the board it appears to be another shift of property tax burden from seasonal properties to homesteaded residential taxpayers.

Responding to a strong lobby from seasonal property owners in the last decade, the Legislature has decreased the percent of valuation seasonal property owners pay, while homesteaded property owners' formula has not been reduced in recent years, Kuha said.