Written By Ron Kingsley, LCA Tax Attorney and Owner
Literally, every day, at least one client calls me with the misconception that the assessor increased the client’s assessed value in order to collect more taxes. No, no and no!!! As other recent articles aptly pointed out, the amount of taxes that the taxing bodies need to perform their functions determines the amount of taxes that must be collected, not the assessed value of property. The assessed value of each property determines the amount (i.e., percentage) of taxes that the owners of the property are responsible for. Assessed values do not determine the aggregate amount of taxes Lake County needs to collect.
Consider the aggregate amount of taxes Lake County needs to collect as a pie. Your property’s share of the tax pie is determined by your property’s assessed value. In other words, assessed values represent an allocation of the tax pie to each property. The following fraction may make this easier to understand:
If Lake County Appeal is able to reduce the numerator as it relates to your property (i.e., we obtain a reduction in your property’s assessed value), your property’s tax liability will decrease. As a result, other properties’ tax liabilities will increase. As you may realize, the fraction will equal 1.0 when all Lake County properties’ assessed values are added together and comprise both the numerator and the denominator.
It follows that, if, hypothetically, Lake County Appeal got a 10% assessed value reduction for every property in Lake County, no property’s tax liability would change. It would be a “zero sum game”. Have I confused you yet? If so, remember the “takeaway”: Each property’s assessed value only determines the amount of taxes to be borne by that property, not the amount of taxes Lake County will collect!