Many homeowners are finding out that low property tax payments have cost them in the long run.

Ottawa County residents have not been subject to an optional 5-percent annual property tax increase approved by voters statewide in 1996.

“I chose not to increase Ottawa County's property tax each year as a favor to the tax payers,” said Ottawa County Assessor Linda Kelly.

The assessor said last week that increases in Ottawa County property taxes most commonly occur with the sale of property.

Now, more than a decade after a constitutional amendment gave assessors an option to incrementally adjust under-assessed properties, state officials are mandating that adjustments be made.

However, the mandate doesn't come soon enough for homeowners affected by the recent flood.

“My late husband bought this home in 1975,” said one B Street homeowner. “To my knowledge, the assessed value has not increased since then.”

The assessed value of the home is approximately $5,000, according to the homeowner, despite a number of improvements that have been made over the years.

Based on the B Street home's recorded assessment, city engineers determined that damage caused by the flood was more than 50-percent of the home's assessed value.

Despite a 5-percent modifier added to the home's assessed value, the structure was red-tagged.

The red tag - what does it mean?

Any property within the 100-year floodplain in which damage exceeds 50-percent of the home's assessed value is “red tagged” and must be demolished or brought into floodplain compliance - at the homeowner's expense.

“I am very upset that the city can condemn my home because the estimated damage exceeds 50-percent of the assessed value,” one homeowner said. “Especially when the value is not current to the market value of my home. I would gladly have paid higher taxes if I had known something like this would cost me so much someday.”

Kelly said the process for determining which homes should be condemned based on the percentage of its value is unfair to the homeowners.

“Our values are low,” Kelly said. “Their homes are worth more than we have them assessed.”

Flood victims, whose homes have been “red tagged” can appeal the decision. They must file an appeal with the city and provide an appraisal of the property and damage estimates from reputable contractors.

Solving the problem

In March, Kelly hired Visual Lease Services, a privately owned Holdenville company that specializes in property appraisals. Over the next four years they will be reassessing all of the property located in Ottawa County.

“The state mandated that I get my assessments updated,” Kelly said. “I don't have the staff to do that, so that is why I hired Visual Lease.”

What does it mean

to the taxpayers?

By as soon as next year, homeowners in the city of Miami may see a 5-percent increase in their property tax. Kelly said it will take longer to reassess the rest of the county.

According to the tax assessor, a property valued at market for $60,518 currently pays annual property tax of $480. The 5-percent rate hike will increase the property tax to $508.

“People living in the flood plain will not have their taxes increased,” Kelly said.

One homeowner said she had no idea how her tax rate was determined and that the low rate meant that her assessed value was considerably less than what it may have been elsewhere.

“I got the statement in the mail and I paid it,” the homeowner said. “I never once considered that paying $25 a year mean that my home was seriously under-assessed.”

When taxes go up,

who benefits?

When property values climb, three entities stand to benefit, according to area officials.

School districts get a boost as their budgets depend on a portion of ad valorem tax.

County and municipal governments gain bonding power through increased property values, meaning that the entities have greater borrowing power.

Throughout Oklahoma, schools receive the largest share of property tax. Schools are followed by city bond issues, county government, vocational-technical schools, libraries, and city-county health department.

Except for those provided for in the Oklahoma Constitution, millage levies are controlled by the voters.