While typically not a formulator of policy, property assessors are likely sensitive to political incentives as they are either directly elected to their office or appointed by another elected official. This paper estimates a model that is motivated by the assumption that assessors seek to maximize political support in a manner that effects the assessment-to-sales price ratio. Using panel data from a 2001 to 2006 series of sales price ratio studies in Virginia cities and counties, a fixed effects variance decomposition regression reveals a variety of socioeconomic and political variables that bias the assessed value away from fair market value. In addition to finding influential socioeconomic factors, the results indicate that elected assessors underassess more than appointed assessors. Furthermore, it appears assessors try to export the property tax onto commercial property via higher assessments, and assessors in districts with higher measures of local government fiscal stress tend to give higher assessments.You could interpret this a few different ways. Either elected county assessors are bad because they're depriving public treasuries of needed funds due to crass reelection motives, or they're good because they help keep taxes low in a way that appointees simply won't.
Monday, December 6, 2010
The price of making a public office elected
We've had a couple of threads going (see here and here) about the value of down-ballot offices being elected or appointed. Commenter Justin Ross provided a link to some of his highly relevant research on this topic. Ross finds that the properties assessed by elected county assessors tends to be undervalued relative to that assessed by appointed county assessors. From the abstract:
Posted by Seth Masket at 12/06/2010 06:30:00 PM
Labels: elected officials, taxes
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Aggregate overassessment or underassessment is pretty much irrelevant, except in states with significant amounts of state level or multi-jurisdictional property taxes.
The vast majority of property taxes are assessed by governments that are completely or almost completely in a single assessor's jurisdiction. The governing bodies that assess property taxes, in turn, base property tax rates on how much revenue they need to raise from that source. Underassessed disticts need higher nominal property tax rates, while overassessed disticts need lower nominal property tax rates, but in the end aggregate assessment level are largely irrelevant.
The predominant issue is favoratism. Are elected or appointed assessors more or less likely to underassess their political sponsors (or in the case of an appointed assessor, a political sponsor of their elected bosses) relative to other property owners. This issue is largely beyond the scope of what is debated in an assessor's election. Those elections almost never feature technical debates on assessment methodologies that impact the relative tax burden of property owners to each other. (A key issue in a recent controversial assessor's election in Jefferson County, Colorado was the assessor's alleged practice of giving employees bonuses and getting kickbacks and of misspending the office budget and of passing out jury nullification fliers at the adjacent courthouse. Similarly, a recent controversial county clerk and recorder's election involved allegations of nepotism and sexual harassment rather than the perfomrance of the job duties involved.) If the election campaiggns don't address the reason the office is elected, one should doubt that the election of that office is a good idea.
The best argument for having an elected assessor, however, is that it deprives other elected officials of influence in making that decision. An elected assessor may be bought by contributors to his own pitiful campaign, but isn't bought by people who supported county commissioners, town council members, the sheriff, the clerk and recorder, the county treasurer, the DA, the county engineer, the school boards in the distict, etc. who actually impose the taxes. Separating the administration of taxes from the entities that impose them reduces the number of opportunities for corruption that would exist if every local government collected its own taxes, and makes it very clear where to look for (friends and supporters of the assessor) and who to blame for corruption (the assessor's) once it is revealed. Of course, once that corruption is revealed, it is much cheaper and easier to promptly fire an appointed asessor than an elected one.
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