The Kootenai County website is the Gold Star when it comes to listing their weekly meetings and attaching agendas by the prior Friday afternoon. Every municipality and taxing district should look to the County when they put out their meeting and agenda notifications. So, when a new special meeting pops up in the middle of the week on the county website titled “Assessor” with the ONE agenda item that says “Corrective Procedures,” one should drop everything to watch said meeting.
This Commissioner meeting with Assessor Bela Kovacs Thursday afternoon was a sharp reminder that checks and balances are in place for a reason, and they become very important when a human error can lead to a $52,000,000 mistake. This one mistake has the potential to disrupt many moving parts within the county like the tax bills will be mailed later than usual (giving the property owner less time to pay), and could potentially disrupt the taxing districts receiving state funds, i.e. lottery, education, etc.
The Assessor explained that an appraiser made an error when assessing a Bayview property, accidentally omitting a decimal point when determining the taxable value. Because of that error, the property went from a $1.4M assessed value in 2022, to a $54M value in 2023, which directly affects the levy rate for the county and every taxing district attached to that area. The correct assessment should have been $634,120.
Kootenai County levy rates are calculated by adding up the total valuation of the entire county which is divided by the county’s proposed budget. The levy rate is then multiplied by the owner’s property value ending with the amount of property taxes due.
Because the property was incorrectly assessed, the $54M made the total county valuation rise above its actual amount, subsequently lowering the levy rate, and then the county and taxing districts do not collect the appropriate amount of taxes. After doing some rough calculations, Kovacs estimated that this error will cause the taxing districts to lose about $200,000 in revenue. The taxing districts will still have the opportunity to place the lost amount into foregone taxes though the revenue will not be included in their normal FY24 budget.
The Assessor says they are working to set up more checks and balances to ensure a human error mistake is caught earlier in the year and doesn’t get this far through the tax process again. Treasurer Steve Matheson informed the Commissioners that there are already reports in place to allow one to check for any significant changes in a property’s valuations, and when the report is used properly, this property would have been caught.
The Commissioners motioned to recalculate the levy rates for the taxing districts affected (including Kootenai County) after correcting this valuation error. Once the Assessor and the State Taxing Commission come up with the correct levy rates, the Treasurer, as the county’s tax collector, will at that point mail out the county’s tax notices. Because of this whole debacle, the tax notices will be mailed out late and after the statutory deadline of the 4th Monday in November. This late mailing will result in residents having less time to pay their tax bills before the December 20th statutory due date. The December 20th date is a hard deadline cannot be extended but it is the authority of the BOCC to waive penalties and interest of anyone that needs it due to this error. Matheson will be meeting with the Board next week, once they get a better understanding of when the tax notices will be in people’s mailboxes, to determine whether they want to accommodate an extension for people to pay their tax bills.
The Auditor’s Office will now have to focus on recalculating the levy rates with the help of the State Tax Commission. Once they have the new rates, they should be able to get the new calculations quickly and efficiently for the affected taxing districts, which will then allow the Treasurer to print and mail people’s tax bills.
This error and delay also affects state payments to the taxing districts; the State mandates that the Assessor certify the Property Tax Reduction by November 20th but due to this error the Tax Commission is extending that deadline until the first week of December. If that extension deadline is missed, the county could potentially be late distributing $1.5 million in state payments.
The Treasurer’s office will be sending letters to all the affected taxing districts to inform them of this debacle.
Everyone makes errors and this is nothing different, however this is why it is imperative that there are checks and balances in place – and those checks are used properly – to ensure that the government agency does not have to scramble at the last minute to correct the matter. Fortunately, there are many competent people and offices working on this issue to rectify the situation as soon as possible, but if anyone receives their tax bill later than normal, now you know the reason why.
Full meeting below.