Property Valuation in La Crosse
City Assessor's Office
June 24, 2008 - 4:42PM
Concerns about falling property values in La Crosse have surfaced with recent changes in the real estate market where the median value of residential homes is $115,000 and the median value of commercial buildings is $450,000.
The City of La Crosse attempts to assess properties at fair market value each year. In determining fair market value for each property, statistical analysis is performed on the relationship between the existing assessed value and the sale price. As property values change so do the assessments.
The City has performed a revaluation of property assessments every year since 1973.
"This is the optimum procedure for maintaining equality among properties, as they can change at a multitude of different rates by location, building type, and just generalized market perception," City Assessor Mark Schlafer explained.
Wisconsin state law requires that property valuations for assessment purposes be made at fair market value. All assessment jurisdictions are provided with copies of all real estate transfers. Statistical analysis is required to be performed on the relationship between the existing assessed value and the sale price.
No additional revenue can be realized by increasing assessments as the budget requirements have already been set. Changes in assessed value only redistribute each property’s relative portion of the total tax.
"Property tax is not a revenue-based system, but rather a cost-based system," Schlafer explained. "Regardless of whether property values increase, decrease, or remain unchanged, the same amount of tax dollars is needed. If property assessments go down 10‰ overall and the budget stays the same, this translates to the mill rate having to go up 10‰. The reverse is also true."
Property tax calculations occur about a year after property assessments are determined. Assessed values must be based as of January 1 considering factors from the prior 12 months of market activity. Budgets are set 10 months later and tax bills are generated each December. Because of this timeframe, there is a 12- to 18-month lag between tax bills and corresponding market activity.
"Falling property values do not correspond to property tax," Schlafer added. "The taxes are a fixed number. Changes in the assessed value cause the rate to go up or down."
Schlafer said that real estate remains one of the best protections against inflation.
"There have been a number of down periods over the last 30 years," Schlafer explained, "but the overall result in that time is an approximate five-fold growth in residential property value."