Editor’s Note: The following commentary was submitted by San Francisco City and County Assessor-Recorder Phil Ting based on the article ran by PublicCEO, “County Assessor Retaliates Against Taxpayer.”

Further, we have reviewed Ting’s response with an expert source and here is the expert’s interesting take.

Assessor Responds To Allegations That He Retaliated Against Taxpayer
By Phil Ting, San Francisco City and County Assessor-Recorder

In San Francisco, as in every county in California, we make our assessments based on facts, and facts alone. The assessments are made by professional staff, with no consideration of what is written in the press or any outside entities other than the data.

Based on last year, the facts are that we reviewed approximately 18,000 homes and granted a temporary reduction in assessed value to over 11,700 homes in San Francisco, which is allowed under state law (Proposition 8) if the current market value is lower than the assessed value.  This is the first time since the mid-1990s the San Francisco Assessor’s office has proactively issued widespread reductions.  

Of those reviewed, one-third of homes were not reduced and pursuant to California State Proposition 13, a 2 percent annual inflationary increase was applied, a decision outside the jurisdiction of any assessor. In 2010, for the first time in California history, all property values will be decreased across the board by the negative 0.237 percent inflation factor set by the California Board of Equalization. In all but five years, the annual adjustment has been capped at 2 percent. Every California property owner, who has not already received a property tax reduction, will see a reduction in their property tax bills.  

The facts in Jon Stuber’s case are as follows:

  • The Factored Base Year Value is $634,642
  • Estimated Market Value is $650,000
  • Taxpayer’s Estimated Value is $549,000
  • Hearing Officer Decision is $605,000
  • The Assessor-Recorder used the standard 3 comparables.  One was across the hall from the subject, one in another building 750 feet away and one 1/3 of a mile away. All in the same neighborhood.
  • The net adjustment to the comparables ranged from 3 to 7 percent, well within a reasonable range.
  • Two of the three comps were built in 2007 similar to the parcel.

As the Assessor-Recorder, it is my offices’ responsibility for valuing property in a fair and equitable manner according to California Revenue and Taxation Laws. Although we do not agree with many of the conclusions in Mr. James’ article, we do appreciate the ability to discuss and explain how we go about our job.

We sympathize and understand the difficult tax burdens upon residents given the current economy, but our mission is to follow the law and to focus on the facts.

– Phil Ting

Further, we have reviewed Ting’s response with an expert source and here is the expert’s interesting take:

I believe that Phil Ting’s numbers are legal, and justifiable. However, they are not fair, nor are they good.

Phil Ting is using the legal methods of valuing property under ad valerom assessments, as what happens when properties decline in value. The biggest problem with Pre-Prop 13 assessments was how assessors chose to legally assess fair market values.

Phil Ting is using the “comparative sales” method of ad valorem assessments (the other valuation methods Phil Ting could have used would have been to see what it would cost to replace the property (the cost approach), or the income approach by seeing how much income the property could generate.

What taxpayers should be aware of is that the comparative sales approach may produce unfair results because no two properties are identical.

The incident between Mr. Ting and the property owner is another clear example of why “fair market value” assessments are not fair.

– Expert Source