How has the residential assessment rate changed over time?

In most years, residential property values have grown faster than nonresidential values, causing the residential assessment rate to be lowered so that residential properties continue to make up about 45 percent of statewide taxable value. As shown in Figure 3, the residential assessment rate has been reduced from 21 percent when these provisions went into effect in 1983 to a current rate of 7.15 percent. With the fixed nonresidential assessment rate at 29 percent, and the current 7.15 percent residential assessment rate, nonresidential property owners pay an effective tax rate that is approximately four times higher than residential property owners. The downward shift of the residential assessment rate is expected to continue in future years.

FAQs - Figure 3

When nonresidential property values grow faster than residential property values, the residential assessment rate must increase to maintain the constant ratio; however, other constitutional provisions require that voters approve such an increase. As a result, the state legislature may decrease, hold flat, or ask voters to approve an increase in the residential assessment rate. Since 1999, there have been six instances when the residential assessment rate would have increased, but the legislature did not refer a measure to voters and the rate instead stayed flat.

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1. What does Amendment B do?
2. How are property taxes calculated?
3. How has the residential assessment rate changed over time?
4. What factors impact property taxes?
5. What are the automatic mill levy increases that some local governments have adopted?
6. How does Amendment B affect residential property taxpayers?
7. How does Amendment B affect nonresidential taxpayers?
8. How does Amendment B impact local government revenue?
9. How does Amendment B impact state government spending for schools?
10. If Amendment B passes, can the state legislature change the assessment rates?