Commercial property owners in the city of Fremont could see a significant property tax increase this year due to an anticipated 12 percent increase in valuations of all Fremont commercial improvements, according to Dodge County Assessor Debbie Churchill.
The increase was ordered by the state Tax Equalization and Review Commission (TERC) on May 2, and Churchill discussed the decision with the Dodge County Board of Supervisors during its Wednesday meeting.
Churchill said that landowners who have smaller-to-mid sized lots with significant development or improvement are at a higher risk of seeing larger tax increases. The TERC decision will be less likely to significantly affect business owners with larger lots and less development.
The TERC decision was made to address a lower-than-required level of value assessed by the county on commercial properties this year.
When the assessor’s office values commercial and residential properties in the county, they are allowed to value properties at between 92 and 100 percent of the market value.
This year, the level of value for commercial properties in Dodge County fell below that minimum 92 percent. Churchill said that the county had some problems in transferring its information over to a new system that classified certain properties differently. That led to a large number of conversion issues that the assessor’s office did not have time to sort through, Churchill told the Tribune.
As a result, some commercial properties were undervalued and the level of value for those properties came out to 88 percent — lower than the minimum 92 percent.
Churchill said they’d hoped that TERC would allow the 88 percent level of value to stand given the conversion challenges. Instead, TERC issued a blanket increase in the value of Fremont commercial improvements.
“We thought we could get by with that and TERC would understand and leave it alone,” Churchill said. “Unfortunately, they did understand but they didn’t want to leave it alone. So they ordered a 12 percent adjustment on all Fremont commercial improvements.”
TERC aimed to increase the level of value on commercial properties in Dodge County up from 88 percent to 96 percent. While that amounts to an 8 percent increase, TERC only ordered an increase on the commercial improvements — not the total value of the property. That required a 12 percent increase to get the total level of value up to 96 percent.
Additionally, Churchill said that, per the TERC order, the increase only applies Fremont commercial properties because it has a more robust commercial tax base.
“The smaller towns really don’t have a robust commercial sales and Fremont does,” Churchill said.
At Wednesday’s meeting, board members felt that the decision was unfair.
“That’s a big hit on a lot of people,” said Supervisor Lon Strand.
Supervisor David Saalfeld suggested that the county appeal the decision, though Strand noted that doing so could be unfair to some agricultural landowners, who Strand said saw a similar increase a few years ago.
The county didn’t appeal at that time and instead had landowners go through the individual protest process.
“We’ve got to play it fair here,” Strand said. “The appeal basis last time was based on people coming in and protesting. So if this is the same case, we’re going to have to deal with it on the protest side just like we did when we had the ag ones and had well over 3 to 400 of those.”