Court Opinion

ID: 8039798
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:27:30.915687+00
Date Added: 2024-06-11T16:37:17.089977
License: Public Domain

Spencer, J.,-
concurring.
I am in accord with the majority opinion herein, but believe some reference should be made to the Brandt reappraisal which was used by the State Board to raise the valuations.
I question how scientific an appraisal may be when it is subsequently raised to meet an objection, particularly where it is necessary to juggle figures to do so. The Brandt Appraisal Company submitted an appraisal report to the Tax Commissioner for approval. It was not approved. Brandt then reconstructed his appraisal by revising it upward. In this respect, Senator Paxton’s testimony on a conversation with Brandt is illuminating. Portions of that testimony are as follows: “ 'Of course, I appraised the property at $25 an acre. I took it to the Tax Commissioner’s office and he turned it down. He said, “I’ll never approve it,” and he said, “You’ll never get your other 10 percent of the money for the appraisal.’” GOVERNOR MORRISON: Who is‘he’? MR. PAXTON: The Tax Commissioner, Mr. Dworak, * * * GOVERNOR MORRISON: Mr. Brandt said that? MR. PAXTON: Yes, sir, Mr. Brandt said, T have to earn a living, I expect to get more jobs from the Department, Tax Commissioner’s office, so what could I do but go home and do as he directed, so I did.’ Now that was the gist of the conversation.”
Brandt was asked why he changed his valuations after he had made a scientific appraisal. His answer was: “My opinion changed.” Brandt testified: “The first year I set values giving less weight to sale price or market value.” Brandt also testified that rule 24 was enacted by the Tax Commissioner after Brandt had appraised three counties. This rule provided in *732effect that actual value was within 10 percent of selling price, or that a 10 percent variation would be allowed from sales-assessment ratio, and that if it was more than a 10 percent variation, the appraisal would not be approved. This, caused Brandt to change his opinion. Rule 24 was revoked by the Tax Commissioner shortly after the reappraisal, and is. no- longer effective. It would seem obvious that the counties involved herein should not be penalized by a rule which will not be applied to- future appraisals.
Brandt’s testimony would indicate that considerable weight was given to an analysis of sales in the 6-county area, yet only 10 sales throughout the 6-county area, covering a 5-year period, were used. These were later supplemented by three others. The 13 sales were distributed as follows: None in McPherson County; one in Arthur County; one in Grant County; one in both Grant and Hooker counties; three- others in Hooker County; two in Thomas County; and five in Blaine County. Obviously, unless the sales could be shown to be truly representative of the entire area, there are too few sales on which to place much reliance.
There was no investigation of the actual income of the land sold, nor any computation of the rate of return. Brandt assumed a hypothetical ranch, not too far and not too close to market, computed a hypothetical profit from that ranch, and worked from that formula. His first report was based on a 4 percent return. This he lowered to 2% percent, to justify the revised figures. It is of interest to- note that in one of the sales analyzed by Brandt, he suggests that if the land involved were rented it should net a return of 4.43 percent. Brandt concedes that it is not possible to carry a ranch on borrowed money with a 2% percent return. For appraisal purposes, for the six-county area, it should be apparent that a 2% percent return is too- low.
Brandt concedes that none of the sales used by him were as well balanced as his hypothetical ranch, for *733which he assumed 8,240 acres. Only one of the sales exceeded that figure. Only two others even approached it. They were 7,034 acres and 6,245 acres. Two of the others were for 4,100 and 4,516 acres. Five of the sales were between 2,000 and 3,010 acres, and the three others were 1,250, 1,280, and 1,300 acres respectively.
The record is undisputed that McPherson County, which had no sales, is approximately 98 percent pasture land. A sale which included cultivated land, which many of the sales considered did, would not be representative for McPherson County. It would serve no useful purpose to analyze the sales used. Suffice it to say that some of them contained factors which would need further explanation before being used, and that they are too few and not sufficiently representative on which to base a sales-assessment ratio study.
The county boards of equalization for the six-county area conducted hearings and reached conclusions that the rate of return used by Brandt in revising his figures was not realistic, and rolled back the valuations to approximate the first appraisal. The State Board raised the valuations to restore the roll-back, so that the action of the State Board approved the final Brandt figures. I believe this to be erroneous, and would have decided these cases on that issue rather than leaving the issue undecided, as the majority opinion does.