Supplemental Assessments: Offspring Of Proposition 13

Between 1991 and 1997 as real estate prices fell during a statewide economic recession, the Assessor's office reduced values on almost 6,000 properties. Under Proposition 13 the base year value established at the time of purchase of a property must be increased by an inflation factor not to exceed 2% per year. This adjusted value is known as the factored base year value. There is no limit as to how rapidly the Assessor can reduce values temporarily below the factored base year value to track market conditions. While there is also no limit as to how rapidly the Assessor can restore values in a recovering market, our policy has been to phase in the restoration over several years. The upper limit after full restoration is always the Proposition 13 factored base year value unless there has been a change of ownership or new construction.

In 1998 we restored 55 properties to their factored base year value while partially restoring several hundred other properties. In 1999 we restored 1100 properties to their factored base year value and partially restored another 1400. For 2000 we will be restoring at least 2000 of the 3100 properties still in a decline-in-value status to their Proposition 13 factored base year values because during 1999 and early 2000 the market has almost fully recovered. Many purchase prices are now above the prices paid during the last peak in the market in 1989 and 1990. Almost all classes of property in Napa County have been impacted by this boom. The Assessor's office has now reviewed all grazing, commercial/industrial, multifamily, rural residential and single family residential properties which were in a decline-in-value status. A few single family dwellings, some condominiums, and certain grazing, multifamily and commercial/industrial properties will remain in decline-in-value status.

To understand the reduction and restoration process let's look at a hypothetical example. In March 1990, Sam and Dorothy purchased a home for $250,000 at the height of the market. By 1995 their Proposition 13 factored base year value had increased to $279,275. However, the real estate market had suffered a severe decline during that same period and as of March 1995 their home was only worth $200,000 which we enrolled as a temporary decline-in-value. By 1998, the factored base year value had gone up to $293,800. However, the real estate recovery was just kicking in and the market value of their home as of January 1998 had only recovered to $245,000 which we enrolled for that tax year. By 2000, the factored base year value of their home had increased to $305,200. The market had now fully recovered in their neighborhood and the market value as of January 2000 was now $320,000. Thus for 2000 we will enroll Sam and Dorothy's factored base year value which is now once again below the current market value. All owners whose properties are restored to their Proposition 13 values or remain in a decline-in-value status with a partial restoration will receive a value notification card in mid-July from our office.

Should you have any questions please contact Napa County Assessor John Tuteur at 707.253.4459 or by e-mail john.tuteur@countyofnapa.org.