The Idaho Board of Tax Appeals will start hosting telephonic hearings on some of the 300 remaining tax appeals from a hotly contested 2019 Bannock County reappraisal process.

Notices of steep valuation increases sent by the county assessor's office last summer prompted roughly 3,000 property owners to file appeals.

Most of those cases were resolved either in hearings with the county's Board of Equalization, which comprises the three Bannock County Commissioners, or through blanket adjustments the county offered to certain appellants whose cases couldn't be heard within the allotted timeframe. Others appealed their cases to the state board, which is a quasi-judicial agency that hears ad valorem appeals.

Officials with the appeals board will travel to Pocatello at dates in March yet to be set to spend several days hearing in-person appeals. Driven mainly by the large volume of Bannock County appeals, the state recently approved SB 1271 to authorize an additional $42,100 for the board to hear cases.

Keith Bybee, deputy division manager of budget and policy analysis for Legislative Services, said the board has requested the right to carry over the funds into the next fiscal year. He explained hearings may be finished by the end of June, when the current fiscal year ends, but it will likely take additional time for the board to write up its decisions.

"I am grateful there were funds approved so on a statewide level we can get these Board of Tax Appeals taken care of," said Bannock County Assessor Sheri Davies. "I know it has not been isolated to Bannock County."

Davies said large adjustments were needed to keep the county up to speed with rapidly rising property values, and to make up ground for valuations that hadn't been aligned with the actual market in prior years.

Many homeowners on fixed incomes, such as Richard Hansen of Pocatello, have argued their budgets can't accommodate such steep adjustments.

Hansen's roughly 4,400-square-foot home on East Whitman Street, built in 1969, was appraised at $317,000, up from $250,000. Hansen didn't file an appeal, unable to find comparable sales data from his area to present as evidence. He also believed the increase in valuation of the county would lead to a lowered mill levy and that his tax burden would remain relatively flat.

As it turned out, however, his adjustment resulted in an annual property tax burden increase from $3,0373 to $4,195.

"I'm going to have to potentially downsize," Hansen said, adding he'd like to see the state impose legislation capping property tax increases for residents who remain in the same home to prevent people from being taxed out of a place to live. "There are other people who are going to have to do something more drastic. I'm not really as concerned about myself as I am of others."

In theory, broadening the tax base should significantly offset individuals' valuation increases — a concept known as equalization. Davies acknowledged can become unequal, however, when many residents win appeals or accept blanket reductions while other property owners simply accept their increases.

"Our data and our process is going to get more accurate every single year. That’s the main goal so we don’t have the inequities we saw last year and we’ve seen in the past," Davies said. "If we have fair and equitable values assessed on our properties, no matter what it is, as we go through the rest of the process and budgets are figured and all of that, it really just does equalize the portion every property is burdened with."

Davies' office is also in the process of getting caught up with its physical property appraisals, as well as addressing discrepancies in its agricultural appraisals, to comply with terms of its own five-year remediation plan.

George Brown, Property Tax Division administrator with the Idaho State Tax Commission, explained all properties within a county must be appraised in person once every five years to ensure they haven't changed in character or use. Counties must draft a five-year plan specifying how they will conduct their physical appraisals.

Brown said Bannock County, which has 40,705 parcels requiring inspection during the five-year period, fell a couple of thousand parcels behind in its physical appraisals and had to submit a remediation plan specifying steps to make up ground.

Brown said his office suggested that Bannock County get caught up by first physically appraising agricultural ground, which is simpler to evaluate, and bare commercial and residential ground. The Tax Commission grew skeptical, however, when Bannock County made faster progress on agricultural ground than they believed was feasible, Brown said.

Brown explained Tax Commission staff discovered through reviewing aerial photographs of Bannock County agricultural land that many properties that had been classified as dry land farms had irrigation pivots on them. Brown said county records had the ground misclassified, and many of the recent physical appraisals failed to remedy the problem.

His office then sent consulting appraisers to Bannock County to take staff into the field and train them in properly classifying agricultural land. Furthermore, Bannock County has named a subject matter expert to handle its agricultural land heading forward.

Brown said his office's consulting appraisers will review the county's remediation efforts on Feb. 27 and report progress to the county commission the following day. If problems persist, the state could intervene and take over some of the work, withholding some county sales tax revenue to offset the expense. Brown is optimistic that won't happen.

"Now they understand what's going on and what they have to do," Brown said. "We're hoping the assessor's office will come back to us and say, 'This is what we've found.'"

Davies recently forwarded a letter to the Tax Commission from Highland Appraisal, which helped train the county's agricultural appraiser, indicating the agricultural misclassifications were isolated problems. Davies said her office has sent notifications to agricultural land owners alerting them of forthcoming changes, and a few farmers have been in the office recently to meet with her agricultural appraiser.

"I have no doubt we're going to be in great shape as far as that goes," Davies said.