The subprime mortgage crisis began when housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. On December 30, 2008, the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.
When the worldwide financial crises upended the banking and real estate markets, the County chose to not update the 2008 Reassessment Year FMV’s until 2013 – a year later than scheduled, claiming the available software was not available. No other County in Virginia used this excuse. The county did not engage an outside consulting firm as it did in 2004 and 2008 for a County-wide reassessment – choosing instead in 2013 to use an employee of the Appraiser’s office who based the work on the 2008 Wingate analysis from a Mass Appraisal approach.
During the intervening years, the County Treasurer chose not to annually update the FMV of all taxable properties in the County, on January 1st of each year – as required by State Statute. The State Department of Taxation was sending an annual report to all Counties (and Towns and Cities that taxed properties as well) showing the ratio of tax assessments to actual sales.
The ratios for Northampton County were askew from 2008 through 2013 as sales were way under assessment values.
Why did the County and its Supervisors choose not to reduce by law the FMV’s and modify the rate rates, which they are allowed to perform?
A Mirror reader has noted in an email that it may be due to the bond debt issuance on the County’s new Jail complex (underutilized and therefore underperforming as revenues would not be forthcoming without sufficient incarcerated individuals housed in the regional jail), created the unforeseen opportunity that the bond indebtedness covenants would fall into default if the County could not maintain its revenue stream from County real estate property taxes to pay the bond indebtedness. Website details from NHC below:
The Eastern Shore Regional Jail is a 248-bed facility that houses minimum to maximum security male and female offenders. The Jail is maintained and operated to safely and securely house pre-trial, pre-sentenced, and sentenced inmates primarily from both Northampton and Accomack Counties. In addition to housing local inmates, the jail may accept inmates from other jurisdictions.
In May 2007, the 85,500-square-foot facility was opened to replace the 93-year-old, 30-bed Northampton County Jail. The state-of-the-art facility was built to meet the current and future correctional needs of the Eastern Shore. All areas of the main interior and exterior are monitored by security cameras and the control rooms are equipped to control everything in the housing units from doors, lights, and cameras to telephones and televisions. The jail has its own full-service Kitchen, Laundry, and Medical departments as well as Administrative Offices and an on-site Magistrate’s Office.
The 24-hour facility is operated by the Northampton County Sheriff’s Office, employs 53 people, and is currently the largest department in the county government.
The Mirror has been attempting to reconcile the County’s actions, but as of this publishing has not been able to locate any evidence of the Board of Supervisors meeting agenda and Minutes describing or held to discuss this decision? The Mirror has queries in with the county, but no data has been forwarded to us.
How many people were impacted by the reassessment decision?