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REGISTER VIEWPOINT: Stealth tax increase can backfire

Commentary • Apr 14, 2010 at 3:29 PM

A tax increase can take many forms. For the owners of the former Maui Sands water park at Ohio 2 and U.S. 250 in Perkins Township, it was a whopping increase of almost $127,000 based on the property valuation used to assess property taxes in 2009.

Unfortunately, the new Maui Sands did not survive the rough economy and fell into bankruptcy, and now the receiver in that case is asking for relief. Thomas Pratt's duty as the receiver is to protect, preserve and maintain the foreclosed property, and he wants the county to decrease the property value and thereby decrease the taxes owed.

But when it comes to property values used for tax purposes there many times seems to be no rhyme or reason. Such is the case with Maui Sands. When it was a Holiday Inn, the tax value of the property was $649,010, which resulted in an annual tax bill of $11,902 -- undervalued for a property in a prime location along the busiest retail strip in the county right smack-dab next to the area's busiest highway. When the former owner of the property invested in upgrades and structural changes to transform it into a water park, the property value zoomed up to $7.1 million.

We've said here before: A tax increase can take many forms, and in the depressed local economy where market values have dropped steady for the last four years it seems pretty evident the most recent valuations by state and county auditor's does not accurately reflect this drop. That, in effect, is a tax increase.

Fighting an inflated property assessment is possible but anyone ready and willing to take that on should be prepared for a long haul before getting a revision.

In this particular case, the county has to determine whether the big swing in valuation from 2008 to 2009 was justified, and whether it should hold to that much higher value, now that the property is in foreclosure. Any decision has to consider the fact the water park is not in operation and will be difficult to sell with a huge tax liability.

Setting a more moderate valuation might be just the ticket to that sale. As long as the property is inactive there likely won't be any taxes collected. A smaller bill that is collected is better than a bigger bill is not.

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