The Greenwood City Council on Tuesday approved being named a party in a lawsuit in an effort to address a state law regarding how federal housing tax credit properties are assessed.
Leflore County Tax Assessor Leroy Ware discussed the issue at the council’s regular meeting.
The issue concerns Section 42 housing, which is developed with funds that come through the issuance of tax credits by the federal government, he said. The credits are to be used to develop “housing projects, apartments and what have you,” Ware said.
In 2005, the state Legislature passed a bill saying these properties had to be appraised based upon their actual income.
Ware told the council this was “one of the worst bills in the history of Mississippi.”
Also, he said, “the State Tax Commission made a determination that the tax credits that these individuals got to develop these apartments could not be used in the income stream in determining the value of the property.”
Ware, who does assessments in Greenwood, gave an example of such Section 42 property.
“They reported on their auditor’s statement that the value of the building was $7,753,112. The taxes on that should be $189,517.10,” he said. “Using the actual income that they reported to us — that we are required to use — the valuation is actually is $1,772,730, which in taxes is $43,332,” he said.
Ware called this tax break “a travesty” and said some people are getting out of paying their fair share.
“Each time you give an exemption to somebody, that just spreads the tax burden to the rest of citizens of this state and this county,” he said.
He said three Greenwood properties fall under Section 42: Parkway Place, Curtis Moore Apartments and David Jordan Apartments I, II and III.
Several court cases are pending on the assessment matter, he said. The Mississippi Association of Supervisors and the Mississippi Municipal League are trying to persuade the courts that the State Tax Commission made an error in interpreting the law.
On Tuesday, Ware requested that the City Council approve a resolution naming the city as a plaintiff in the lawsuit to be filed on behalf of the Mississippi Association of Supervisors, the Mississippi Municipal League and various cities and counties against the chairman of the Mississippi Department of Revenue.
City Council President Ronnie Stevenson asked how changing the assessments would affect rent on the properties. Ware responded that rent is part of an agreement between the property owner and the federal government and would not be affected.
He said attempts to repeal the 2005 law have cleared the state House of Representatives every year by a wide margin only to die in the state Senate Finance Committee.
Ward 6’s David Jordan, also a state senator who serves on the Senate Finance Committee, asked why Ware had not approached him as a legislator in January instead of coming to the council in April.
Ware said he did visit and talk with Jordan in Jackson in 2006 in an attempt to get his support for the unsuccessful repeal effort. He said the repeal legislation never clears the committee, and he expressed doubts to the council that it would ever see the light of day, with or without Jordan’s support.
• Contact Bob Darden at bdarden@gwcommonwealth.com.
