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You want get away from congestion, so you buy a sprawling lot on the edge of town fronting a gravel road. The urban area comes to you, however, when an elementary school is built nearby and the city decides your gravel road needs to be paved. Adding insult to injury, in your mind, the city hits you with a big assessment to help pay for the paving project.
That happened to the owners of a half-dozen pieces of residential property in Indianola, and they sued the city. They argued it was unfair to assess them between $12,000 and $20,000 each to help pay for a road they did not ask for and do not want.
The Iowa Supreme Court disagreed. Iowa courts have long upheld the power of local governments to pay for part or all of the cost of public improvements with special assessments against individual properties. The courts pretty much leave the details up to local governments.
The decision is important to all owners of real estate in Iowa - including tax-exempt property - who at some point could find themselves assessed for a public improvement. The ruling may not necessarily be welcomed by all homeowners and businesses, but it preserves Iowa's longtime process used to decide who pays for public improvements and how much they are charged.
That process is, by and large, a fair one. Some properties benefit more directly from paving projects than taxpayers in general, and they should be expected to pay a premium for that direct benefit.
The Indianola plaintiffs argued the street provides zero benefit to them, however. They argued the paving project was a detriment to them by increasing traffic and diminishing the rural nature of their area.
But the question is not whether the individual land owner likes the idea of a paved street in front of his property. The question is whether the road adds value to the abutting property. "We find the special benefits conferred upon the properties at issue in this case are numerous, despite the owners' testimony that they have actually been harmed by the paving of the road," Justice Daryl Hecht wrote for the court.
Roughly 55 percent of the $660,000 Indianola project was assessed against benefitted property owners. The rest was picked up by general city taxes because traffic is generated by the new elementary school and by vehicles passing through the neighborhood.
You can question the fairness of that split and the formula used by the city in calculating individual assessments, but the cost-benefit analysis is more art than science. The Iowa Supreme Court has traditionally given cities the benefit of the doubt on the fairness of that analysis in specific cases.
That's not to say Iowa's assessment formula cannot be improved. Rather than this cost-benefit analysis, many states assess "impact fees" on owners of property that cause the need for public improvements in the first place - such as charging fees to new real estate developments for building streets and parks - which are fairer in many cases.
Such fees are considered taxes under Iowa law, and the Legislature has not specifically authorized them. That's something lawmakers should put on the agenda whenever they get around to a comprehensive rewrite of Iowa's convoluted property tax system.
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