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EQ Report Called 'Historic'
GRAND RAPIDS — Even though the value of agricultural and commercial properties in the county rose over the past year, the total equalized value of real and personal property dipped by nearly two-tenths of a percent from 2007 to 2008 — a very rare occurrence.
"The numbers you have before you are kind of historic," said Matt Wolford, Kent County Equalization Deputy Director.
The numbers Wolford referred to were contained in the 2008 equalization report he presented to members of the county's Finance Committee last week. The bottom line of the report is the total value of all real and personal properties in the county dropped from $24.33 billion in 2007 to $24.29 billion in 2008, a fall of $42.3 million in 12 months.
The numbers are "historic" because it's the first decline in the county's equalized value since at least 1989, the earliest year listed in the report. The value rose every year since then until this year, with gains coming in double digits for three of those years over the 18-year span from 1989 to 2007 and by 4.25 percent last year.
But while the overall equalized value went down, the county's taxable value went up by slightly more than 2 percent, a change that brought the assessed and taxable values closer together.
"The gap between taxable values and assessed values closed faster than we thought these would," said Wolford.
The taxable value grew because of inflation, which was 2.3 percent last year. State law allows the inflation figure to be added to the taxable value of a property and the ensuing tax bill as long as it doesn't exceed 5 percent. The total taxable value reached $21.75 billion in the latest report, up from last year's total of $21.32 billion. Last week's report marked the fourth consecutive year that the taxable value rose by more than the assessed value did.
The value of residential properties in the county's nine cities and 21 townships dipped from $15.79 billion last year to $15.64 billion this year, nearly a 1 percent reduction of $151 million — a change Wolford said was a clear sign of the significant downturn in the housing market.
But even with the falling home values, the largest one-year percentage drop came in the industrial sector. The value in that property segment fell by more than 6 percent from $1.96 billion in 2007 to $1.83 billion in 2008.
"Last year was the first time in 10 years that we didn't go up by $1 billion," said David Jager, Kent County Equalization Director of the overall value, "and that was because of the Steelcase property."
Steelcase Inc. sold more than 200 acres of its former campus on the city's southeast side last year to Ashley Capital, a New York-based real estate developer that is redeveloping the property.
The industrial segment accounts for 42 percent of the county's total personal property tax value, the same percentage the commercial segment makes up. But the taxable value of real commercial properties is 2½ times higher than the industrial segment at $4.62 billion, meaning there are more commercial properties than industrial. So based on the number of properties involved, industrial machinery actually accounts for a bigger chunk of the personal value than the commercial segment.
The equalized value of personal property fell by 1.45 percent over the past year, while commercial and agricultural property values rose by a respective 1.48 percent and 4.7 percent.
The full board of county commissioners will review the equalization report on Thursday.
"I was not expecting the decrease that we have this year," said Wolford. "But we are in better shape than most (counties)."
Some Up, Some Down
Here is a look at the changes in real and personal property values in
Type of Change from Agricultural $305,797,400 $310,324,700 +1.48% Commercial $4,421,321,198 $4,629,371,200 +4.70% Industrial $1,964,202,450 $1,833,563,600 -6.65% Residential $15,791,563,476 $15,640,329,575 -0.95% Total Real $22,482,884,524 $22,413,589,075 -0.30% Personal $1,855,685,922 $1,882,659,100 -1.45% Total Real
2007 to 2008