1:30:40
Hollis Select Board Revaluation Workshop - 7/15/26
SRCM - Town of Hollis
Overview
This workshop addresses the necessity of a property revaluation in Hollis, Maine, after a previous attempt was voted down. A revaluation is legally required to ensure assessments align with state standards, specifically an average assessment ratio of 70% and a quality rating below 20. The current assessment ratio is significantly below 70% (around 52%), and the quality rating is high (19), indicating widespread inequities in how properties are valued for tax purposes. The discussion highlights that a revaluation doesn't necessarily increase overall taxes but redistributes the burden based on current market values, potentially lowering taxes for some and increasing them for others. The process, challenges, and benefits of revaluation, including the importance of accurate data and professional assessment, are explored.
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Chapters
- Hollis needs a property revaluation because current assessments do not meet state standards.
- State assessing standards require a minimum average assessment ratio of 70% and a quality rating below 20.
- The current average assessment ratio is around 52%, and the quality rating is 19, indicating significant disparities.
- A revaluation aims to correct these inequities and ensure fair distribution of the tax burden.
Failing to meet state standards can lead to financial penalties and continued unfairness in property taxation, impacting all residents.
The current average assessment ratio is 52%, meaning properties are, on average, assessed at just over half their market value, and the quality rating of 19 shows a wide range of individual assessment ratios, from 30% to 96%.
- An assessment ratio is the assessed value of a property divided by its sale price.
- The average assessment ratio is calculated using the middle 70% of sales data to avoid outliers.
- The quality rating measures the dispersion of individual assessment ratios around the average; a wider range indicates greater inequity.
- A quality rating of 10 or below is excellent, 11-15 is good, 15-20 is fair, and over 20 is a violation.
These metrics are crucial for understanding how fairly property taxes are distributed and whether the town is in compliance with state law.
If a house assessed at $75,000 sells for $100,000, its assessment ratio is 75%. If the town's average ratio is 52%, and individual ratios range from 30% to 96%, this indicates a wide dispersion and potential unfairness.
- Hollis's last revaluation was in 2001 or 2002, making it significantly overdue (over 20 years).
- Failing to revalue leads to a widening gap between assessed values and market values, creating tax inequities.
- The town has lost tree growth reimbursement money (around $38-40k annually) due to its low average assessment ratio.
- Homestead exemptions may also be reduced due to non-compliance with assessing standards.
Delaying revaluation results in tangible financial losses for the town and perpetuates an unfair tax system for its residents.
The town has already lost approximately $40,000 per year in tree growth reimbursement because its average assessment ratio has fallen below the threshold required by the state.
- A previous revaluation effort in 2017 failed, costing the town money and eroding trust.
- Choosing a vendor based solely on the lowest bid can lead to poor outcomes, as seen in the 2017 failure.
- The current proposed vendor has a long history of successful revaluations and long-term relationships with towns.
- A key part of the process involves creating a detailed property database for accurate and efficient assessment.
A well-executed revaluation requires careful vendor selection and a robust process to ensure accuracy and build public confidence.
The previous failed revaluation effort in 2017 used a manual assessment system, which is labor-intensive and prone to errors, unlike modern software-based approaches.
- Assessing large commercial properties, like Poland Spring Bottling, presents unique challenges due to specialized equipment and business structures.
- These properties may have tax exemptions (e.g., business equipment tax exemption) that affect town revenue.
- Accurate valuation of such properties requires specialized expertise and cooperation from the business owner.
- Failure to properly assess large commercial entities can lead to significant tax shifts onto residential property owners.
Ensuring large commercial properties are assessed fairly is critical to preventing disproportionate tax burdens from falling on individual homeowners.
In a previous revaluation in Poland, the assessor had to develop methods to value Poland Spring Bottling due to lack of cooperation, ultimately shifting $250,000 less than initially feared but still impacting other property owners.
- A revaluation typically leads to a decrease in the overall tax rate because the total assessed value of the town increases.
- Individual tax bills will change based on a property's assessment relative to the new average ratio.
- Properties assessed significantly below market value will likely see an increase in their tax bill, while those assessed closer to market value may see a decrease.
- Voters may have misunderstood that the funds for revaluation were already budgeted and would not immediately increase their tax rate.
Understanding how revaluation affects the tax rate and individual bills is essential for informed decision-making and dispelling common misconceptions.
If a town's average ratio doubles from 50% to 100%, the overall tax rate would likely be cut in half, but individual bills depend on whether a property's assessment was below or above the old average.
- The proposed vendor emphasizes long-term relationships, providing ongoing annual assessing services after a revaluation.
- Regular annual assessments help maintain fairness and prevent the extreme inequities that arise from infrequent revaluations.
- While revaluations are mandated every 10 years, more frequent adjustments (e.g., every 4-7 years) are ideal for maintaining equity.
- The goal is to establish a regular cycle to make revaluations less disruptive and more predictable for taxpayers.
Consistent, professional annual assessing, coupled with periodic revaluations, is key to maintaining an equitable tax system and avoiding the pain of drastic shifts.
The vendor has maintained multi-decade relationships with many towns, performing both revaluations and annual assessments, which helps keep the process smooth and predictable.
Key takeaways
- Property revaluation is a legal requirement to ensure assessments align with state standards and promote fair tax distribution.
- Current assessment data for Hollis indicates significant inequities, with a low average ratio and a high quality rating.
- Delaying revaluation leads to financial losses for the town (e.g., lost state reimbursements) and unfair tax burdens.
- Choosing a qualified, experienced vendor is crucial; avoiding the lowest bid often prevents costly failures.
- Revaluation adjusts the tax burden based on current market values, not necessarily increasing overall taxes, but changing individual bills.
- Large commercial properties require specialized assessment to prevent disproportionate tax shifts onto residential taxpayers.
- Regular annual assessing, in addition to periodic revaluations, is vital for maintaining tax equity over time.
Key terms
RevaluationAssessment RatioAverage Assessment RatioQuality RatingSales Ratio StudyTax BurdenMarket ValueAssessed ValueProperty ClassesAnnual Assessing
Test your understanding
- What are the two primary state assessing standards that Hollis is currently failing to meet?
- How does a revaluation process aim to achieve a fairer distribution of the tax burden among property owners?
- What are the potential financial consequences for a town that fails to conduct regular revaluations?
- Why is it important to consider factors beyond the lowest bid when selecting a company to perform a property revaluation?
- How does a revaluation typically impact the overall tax rate of a municipality, and how do individual tax bills change?