Written with Sheri Faber
No one likes to pay taxes and, as Gorham Town Manager Ephrem Paraschak put it, “Taxes are the most unpopular contact with city government.” In 2022 Gorham homeowners experienced the town’s first mass reassessment in over 10 years and most saw significant increases in the assessed value of their property. Although the Town Council reduced the mil rate from last year’s $19.40 to $12.85, 75% of homeowners saw their taxes increase as well. There were many valid reasons for higher assessments, but some taxpayers questioned the process or were unclear about the reasons for their higher 2022 tax bills.
Reassessment is intended to determine the market value of property for tax purposes. According to Aaron Chadbourne, a local realtor, “real estate values always go up over the long term, but in the last five years residential property in Greater Portland more than doubled.” Chadbourne attributed this to inflation, low interest rates, a shortage of available housing units, and an increased demand fueled in part by out-of-state buyers during the pandemic. Although inflation and price increases may be slowing down, the Portland Press Herald reported in December that the median price of units sold in Cumberland County had risen by 10.42% since November 2021.
Real Estate appraisals are based on the same criteria as those used by assessors for tax purposes. Key factors for pricing residential property are location, size (sq. ft.), acreage, and the condition of the building, Chadbourne said. Assessors also compare a property to similar properties in the area. For example, the assessed value of a residential property in North Gorham nearly doubled from what it had been valued in 2008, although there had been no changes other than routine maintenance. However, the newly assigned value was in line with the recent selling price of comparable properties in the area.
Homeowners have questioned why there was such an increase in the assessed value of their residential property when some similar properties had smaller tax increases and even tax reductions. Because the value of property in Gorham has increased nearly 73% since 2008, new valuations may have generated tax increases of as much as 20%, even with the lower mil rate. However, homes built within the last few years were at that time assessed nearer to 2022 market values, so the increase was less. Because of the lower mil rate, their taxes might even have gone down. In Gorham, about 25% of residential properties had tax decreases or no increase. Some decreases, of course, would have reflected the condition of the property or other changes that reduced its value.
In addition, the tax burden is shifting from commercial property to residential. During the last decade, the value of homes went up more than commercial values. In Gorham only 10% of property is commercial. The value of commercial property rose only 24% which resulted in tax decreases. Commercial values are not rising as fast due in part to labor shortages, online shopping, and people working from home. “Gorham needs to diversify and attract more businesses if it wants less reliance on the residential tax base,” Chadbourne said.
The same mil rate applies to all property, so when the increase in value of commercial property is less than that of residential property, more of the tax burden falls on residential owners. Jim Walker, a Gorham resident who has raised many concerns about the assessment process, advocates lobbying the state legislature to permit a different mil rate for commercial property.
“Wholesale revaluations are done by formula and errors will happen, innocent errors and errors of judgement,” Chadbourne said. Despite the many reasons for tax increases, Gorham homeowners who believe their 2022 tax bills did not reflect the true value of their properties and are concerned should contact Cumberland County Regional Assessing. The Town of Gorham contracted with them to oversee the 2022 property valuations for tax purposes. The town no longer does its own assessing. The Town Council hired the appraisal firm, Vision Government Solutions, to collect data for the revaluation.
Working in the spring of 2022, assessors visited all Gorham properties. The assessors sometimes asked to see the inside of the house, but homeowners couldrefusethementrysincetheyhad information about the property from previous assessment records. According to Thompson, homeowners concerned about COVID may not have let assessors into the house. “However, there are always errors in assessment,” Ben Thompson, director of Cumberland County Regional Assessing, said, but added, “all the data Vision and the County was aware of was accurate”
In fact, COVID set the revaluation process back six to eight months and some homeowners felt the process was rushed. The town had been under a time crunch because it had been more than ten years since Gorham had a major assessment and there was the potential for penalties from the state for the delay.
Both Paraschak and Thompson encourage homeowners to look at their assessment records, or “cards,” even if they are not protesting an increase. Errors stay on the cards until they are removed. To access a card go to the Town of Gorham website and click on the Vision link and enter the address. All the criteria for the assessment are on the card, along with the history of previous assessments and changes made to the property. “Make sure you have all the exemptions you are entitled to,” Thompson said. If there are mistakes, the homeowner should call Cumberland County Regional Assessing at (207) 699-2475.
Those who believe there are significant errors in their assessment should contact the assessor’s office before the April 2, 2023 deadline to request an abatement hearing. Thompson, who is still the Assessor for Gorham, emphasized, “Everyone is entitled to meet with the assessor.”
As the cliché goes, nothing is certain but death and taxes. Taxes are the price we pay for schools, plowed roads, and public safety. However, it is incumbent on everyone – government, assessors, and taxpayers – to make sure the burden of taxation is distributed fairly and equitably.