Nearly 62 percent of Stanislaus County homeowners will get a financial break this year as property taxes plunge.
The county's assessor revealed Wednesday he has reduced property assessments by $3 billion, which means tax bills will shrink about $30 million.
The assessed value of all county property fell to $36.9 billion. That 8 percent drop is believed to be the biggest one-year drop since the Great Depression.
To compensate for the loss, 80,553 homeowners — plus thousands of businesses, farmers other property owners — will have their property taxes lowered.
Many homeowners will save more than $1,000 in taxes this year.
Homeowners can consider that a consolation prize, considering most of them have lost virtually all their home equity during this brutal recession. Stanislaus County home prices have plunged about 66 percent since 2005. The region leads the nation in foreclosure rates. Many people now owe more on their mortgage than their homes are worth.
And while the property tax reduction is good news for families, it's bad for government budget makers who depend on that revenue source for schools, county and city services and special districts.
For instance, Stanislaus County is expected to collect $85.5 million in the coming year, down from $90.2 million this year. But when county finance employees recently prepared the 2009-10 preliminary budget, they pessimistically placed the loss at $9.4 million, making the actual reduction seem not so dire.
"It's still bad, but it isn't as significant as we'd originally anticipated," said Monica Nino, county assistant executive officer.
Some Stanislaus County cities will be hurt worse than others.
Example: Property assessments in Patterson plunged nearly 20 percent, but they fell less than 4 percent in Turlock.
"Turlock did better than most of the cities because there aren't as many new subdivisions and because the new construction of commercial property helped offset the declines in residential properties," Stanislaus County Assessor Doug Harms explained.
Assessed values decline
Modesto's assessed value declined 8.8 percent, Ceres and Oakdale almost 10 percent, Riverbank and Hughson about 8 percent, Waterford more than 16 percent and Newman nearly 18 percent.
In Modesto's case, city officials anticipated a 10 percent decrease when they adopted their 2009-10 budget two weeks ago — which translates into a $1.3 million loss in general fund revenue.
Harms said virtually all homes purchased during the last decade had their assessed values lowered. Properties purchased in the mid-'90s — during the region's last real estate recession, after prices had dropped — didn't have assessments lowered as much as those purchased before that, when prices were higher.
"We lowered assessed values on properties going back to the late '80s, and in a very few cases on properties (last sold) in the mid-'80s," Harms said.
As a result, cities with the most recently built homes had the highest percentage of properties with lowered assessments.
In Patterson, assessments and property taxes will be reduced for nearly 75 percent of property owners. More than 62 percent of property owners in Newman, Ceres, Waterford and Riverbank will have their taxes lowered.
In Modesto, Hughson and Oakdale, more than half of property owners will have their taxes reduced.
In Turlock, 47.5 percent of property owners will owe less taxes this year.
Individual property owners will get letters from Harms in July telling them if their assessment went down. For most homes that have had the same owner for 25 years or more, however, the assessment and taxes will rise.
Basic property taxes — not counting what's owed for things such as school bonds, Mello Roos fees or special districts — are calculated at 1 percent of the assessed value.
"Your assessment is a unique value," Harms said. "It is established when you purchase your property and in most cases, except for an annual adjustment of no more than 2 percent for inflation, only changes if you construct something new on your property.
"Because of this, your assessed value is almost always lower than the current market value by some degree. However, in a declining market it is possible that the current market value of your property could dip below the assessed value of your property. In these cases, the assessor is required to compare your assessed value with the current market value of your property as of Jan. 1 each year."
The just-announced assessments will be used to determine the property taxes due Dec. 10 and April 10.
If homeowners don't agree with the assessed values, they can appeal their property's assessment. Property owners who have questions can call the assessor's office at 525-6461.
"An owner who is calling because they believe their property had additional declines in value after Jan. 1, 2009, should understand that those declines will not be calculated until the 2010-11 assessment roll, which will be determined as of Jan. 1, 2010," Harms said.
Bee staff writers Adam Ashton and Garth Stapley contributed to this report.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.