The Greene County Commission's budget committee voted unanimously Thursday to recommend setting a new, corrected "certified" property tax rate of $1.5069 per $100 of assessed valuation.

To be effective, the new, slightly higher rate will have to be ratified by a majority at the Sept. 15 meeting of the full commission.

It will replace a rate set less than a month ago, but will produce the same amount of revenue on the same parcels as the 2007-08 rate, a requirement of state law.

According to the resolution, the new certified rate for property inside the city limits of Greeneville is to be $1.3137, to which 19.32 cents will be added outside the city, to cover debt for county school construction and buses.

On Aug. 18, the commission approved a rate that county officials learned days later was incorrect because of "obvious errors" in some commercial property appraisals.

The rate approved by the committee on Thursday corrects the errors.

County Budget Director David Lawing said that if the errors had not been corrected by local and state officials as they were, the county would have come up about $89,000 short by the end of the current fiscal year, which began July 1.

The new rate will not affect the county's fiscal 2008-09 budget, which was approved Aug. 18.

Mayor Alan Broyles said he asked Assessor of Property Ralph Bowers and Bowers' deputy, Chuck Jeffers, to be present, "because I know some people out in areas of the county have been asking" about the errors.

Commissioner John Cox said his constituents have asked whether their appraisals also contain errors. Most county residential appraisals were about 30 percent higher than they had been previously.

Cox also asked if additional errors could force another correction.

Assessor Bowers said there will be no more changes in the county's certified tax rate this year. He also said some appraisals that have been contested and are now before the state Board of Equalization are still pending.

However, Bowers said state board actions that are still possible on the pending parcels cannot produce enough overall change to alter the new certified rate.

Bowers and Jeffers both said the errors were made by state employees who were helping the county conduct the fifth year of its five-year reappraisal cycle.

In the fifth year, all 43,000 parcels of property in the county are assigned new valuations based primarily on market prices of similar parcels. The values are based on transactions recorded in 2007.

The errors affected a small number of commercial properties, where very high values were placed on the properties in error.

Bowers said that this year, as in the past, the county Board of Equalization has not attempted to rule when new appraisal values have been contested on commercial property.

For many years, instead of attempting to rule on commercial property, the local equalization board has almost automatically referred any commercial questions to the state Board of Equalization.

Jeffers said the county Board of Equalization "should" at least review commercial properties when values are challenged by owners. But Bowers said that, as a practical matter, it is very hard to find people to serve on county Equalization Boards who have the expertise needed to determine whether correct values have been set on commercial property.

Lawing said "obvious errors" on a handful of commercial properties set values that were a total of $16.8 million too high. Lawing said he learned of this on Aug. 20, two days after the budget had been passed.

Sometime the week before that, Lawing said, Jeffers had mentioned to Bowers, his boss, that he (Jeffers) was trying to work to resolve some obvious errors, but was having trouble arranging meetings.

Lawing said the matter came to his attention after Greeneville Town Recorder Jim Warner noticed, while reviewing revenues projected for the city, that projected revenues were lower than they should have been.

Lawing said $7 million worth of assessed-value errors were found inside Greeneville, and about $1 million worth of such errors were found outside the city. Commercial property is generally assessed at 40 percent of appraised value.

"If we had found out a day or two earlier," then the commission vote on the property tax rate could have been delayed, Bowers said.

Jeffers, who has done appraisal work for several other counties, said he has seen errors like this before, "but not on a regular basis."
In this situation, Jeffers said one parcel was brought to his attention that was appraised at about $5.3 million last year raised to nearly $13 million. He said this was "an obvious error, a huge error." Jeffers said he personally would not have raised the value to even $6 million.

Jeffers said that, once the error came to his attention, he could have let it go before the state judge (the next step in the process) on Sept. 23, but decided that, if he had done that, the judge would likely have "cut it lower than what I settled with" the tax specialist representing the parcel.

Jeffers explained after the meeting that Larry Burkes, of Asheville, is a tax representative who typically represents commercial and industrial property owners when disputes over appraisals arise.

Jeffers said Burkes called him and told him about several large errors on the Sept. 23 docket, and Jeffers asked Burkes to come in and discuss them. As soon as Jeffers saw the figures, "I knew we had a problem."

Jeffers said he was able to negotiate with Burkes and eventually come compromise on negotiated values that were higher than the values that Burkes would have "appealed for" before the administrative law judge who hears appeals for the state Board of Equalization.

Bowers apologized to the committee several times, though Commissioner Cox said there was really little that he could have done.

Bowers said that as soon as Warner brought the matter to his attention, he talked to Lawing.

Together with Jeffers, they called Kelsey Jones, with the state Board of Equalization. Bowers said Jones realized that he was upset, and " said, 'Settle down, nothing has happened that we can't work it out."

Jones asked Bowers to provide him with copies of the erroneous appraisals and the corrected ones. After several days, Bowers said Jones "finally let me know he (Jones) left it the way we fixed it," and sent the county an amended certified rate.

In response to questions about whether the county's corrections were done properly, Bowers said, "They ruled that we did."

Bowers said only a small number of possible changes are still pending, and most of them are on residential properties with values that will not change the overall rate, even if the state board makes changes. He said only "two minor commercial" parcels are on the Sept. 23 docket.

Jeffers also said that, in the future, he would like for the county Board of Equalization to look more closely at commercial properties that are challenged than it has in the past.