Property taxes should drop for 37 percent of Jackson County residences in November, a side effect of the prolonged downward spiral in real estate values.

Property taxes should drop for 37 percent of Jackson County residences in November, a side effect of the prolonged downward spiral in real estate values.

Fire districts, irrigation districts and the county are nervously eyeing the precipitous fall in home values because they depend on the revenues from property taxes.

"It would cause us some woes," said Bob Miller, chief of Jackson County Fire District No. 4 in Shady Cove.

He said his agency already has scaled back its budget because it expects a dip in tax revenues, which, if it continues, could cause cutbacks in services. Miller's 2010-2011 budget of $870,500 has been scaled back to $843,000.

The Assessor's Office calculates that the market value on 37 percent of residential properties has dropped below the maximum assessed value, which, under state law, triggers the reduction in taxes.

By contrast, just four years ago, the market value on average exceeded the assessed value by 50 percent.

Factors such as voter-approved bond measures, levies and remodeling work could push up taxes for an individual property owner.

Most of the remaining 63 percent of county property owners have seen declines in market values but not enough to see property taxes reduced. Instead, they will see the usual 3 percent increase in assessed value allowed by state law that helps fund 84 taxing districts in the county, including fire departments, irrigation districts and schools.

Because the majority of property owners will see an increase, the overall assessed valuation of all properties will nudge up from $16.2 billion to $16.4 billion, an increase of a little more than 1 percent. Last year the increase was 2.65 percent.

Market value is the amount the Assessor's Office calculates a property would be worth if it were sold, while assessed value is the amount that is actually used to determine taxes.

Some taxing districts in the county could be harder hit than others because market values have dropped faster in their areas.

The market value of all properties in the county declined by 9 percent this year, from $24.6 billion to $22.5 billion. Last year the reduction was 14 percent.

Roy Wright, who owns a local appraisal company and has run for county assessor in the past, said he doesn't think the county has reduced property values enough because it wants to avoid reducing its revenues.

"The Assessor's Office is always under pressure to come up with a number to meet somebody else's need," he said.

Wright's claim is strongly refuted by county officials.

Using himself as an example, Wright said he challenged the county's estimate of the market value on a condo on Morrow Road in Medford in 2009, dropping the amount on which he is taxed by more than $20,000 to $71,000. The net result is that he is saving a little more than $300 a year on property taxes. Wright, who is contemplating running for assessor again, said he plans to seek an even lower value on his condo this year because the market is still going down.

Using another example, Wright said he appraised a west Medford house for $1.3 million in 2005. He recently reappraised the same house for $650,000.

Commissioner C.W. Smith said Wright is wrong about any pressure put on the Assessor's Office by taxing districts or the county.

"That's absolutely untrue," he said.

Smith said he would be the first to go to the state Attorney General's Office to file a complaint if he had even a shred of evidence to indicate there was any kind of pressure.

He said that if property owners feel their valuations are off, there is an appeal process available through the County Clerk's Office, known as the Board of Property Tax Appeals.

"BOPTA will probably be very busy this year," Smith said.

County Administrator Danny Jordan said the county is required by law to calculate the market value in January, even though real estate conditions have deteriorated since then.

"I think property values have continued to decline," he said.

Jordan said the county already had anticipated in its budget process that the overall property valuations would not increase as much as in previous years. He said he had estimated the assessed valuation of Jackson County properties overall would go up 1.5 percent, but they actually rose only 1.22 percent.

The county's current budget anticipates $31.6 million will be collected in new property taxes as part of the county's total budget of almost $350 million. The county receives roughly $2 for each $1,000 in assessed valuation.

Dan Petersen, fire chief for Jackson County Fire District No. 3, said his district's $12 million budget still anticipates additional revenues, but he does see worrying signs ahead.

For example, industrial properties have been looking at reducing tax loads. Carestream Health Inc. successfully reduced its property taxes last year, resulting in a $70,000 loss to the district's budget, Petersen said.

He said he's waiting to receive a report from the county on the actual impacts to his district. He said 95 percent of the fire district's budget is from property taxes.

"We are watching it closely, and we're concerned about it," he said.

Eagle Point resident Don Herzog said he's challenged the values on two different properties he's owned, bringing down the taxes on both.

The 65-year-old said any property owner in Jackson County who thinks his house or land is being valued too highly by the county should challenge the valuation.

"Go ahead and give it a try, it doesn't cost anything," Herzog said.

Damian Mann is a reporter for the Mail Tribune. Reach him at 541-776-4476, or email dmann@mailtribune.com.