Court Opinion

ID: 9698958
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:05:22.36918+00
Date Added: 2024-06-11T18:20:44.932666
License: Public Domain

Newton, J.,
dissenting.
I respectfully dissent from the decision of the majority. This is an appeal from the State Board of Equalization and Assessment hereinafter referred to as Board. The counties of Boone, Cass, Holt, Loup, Nance, Polk, Sarpy, and Wheeler briefed and presented their cases together and have been so considered. The question presented is whether or not Article VIII, section 1, Consti*767tution of Nebraska, has been complied with. That section states: “Taxes shall be levied by valuation uniformly and proportionately upon all tangible property and franchises, * * Formerly, when the state levied property taxes, this provision required uniformity and equalization of assessments between counties throughout the state. With the abolition of the state property tax, uniformity between western and eastern Nebraska counties is no longer mandatory as neither is subject to taxes levied in the other. If Scotts Bluff County were assessed at 50 percent of actual value and Douglas County at 25 percent, no prejudice would result to Scotts Bluff County because there are no overlapping taxing districts between the two counties.
The record before us is absolutely barren of any evidence regarding overlapping taxing districts. I would nevertheless take judicial notice that such overlapping occurs as between adjoining counties. In the absence of such overlapping districts, any inequalities appearing in county assessments is nonprejudicial, as to such counties, or to put it another way, error without prejudice and does not merit consideration.
In preparing for the task of equalizing between counties, the Board held regional hearings at which a large volume of evidence was adduced. The transcript of this evidence was not introduced in evidence and, therefore, cannot be considered here. See Chapter 84, article 9, R. R. S. 1943. The record is also deficient in another respect. Property sales used in arriving at sales-assessment ratios were not considered at the hearing before the Board. It was understood that any party interested could go into this matter after the hearing with a representative of the Board and that information acquired would be considered. Whether or not this was done does not appear in the record. If it was done, appellants have failed to include in the record the results of these supplemental fact-finding sessions or any evidence pertaining thereto. I must, therefore, assume that the data *768upon which the Board computed sales-assessment ratios is satisfactory and correct.
Also, as part of its basic preparation, the Board employed competent appraisers to make spot checks of certain representative counties. These studies were rather exhaustive in nature and definitely tend to throw light upon the actual value of the various classes of real property within the county as compared with actual values adopted by the assessor for assessment purposes. For instance, in Boyd, Holt, Garfield, Wheeler, and Greeley Counties, three classes of irrigated land, four of dry land (cultivated), two of meadow land, and three of grazing land were considered. Two approaches to actual value were used, a market-data approach and a capitalization of income approach. Results were as follows:
Market Data Income Leased Correlated
CLASS Valuation Valuation Results
Irrigated I $ 545 $ 479 $ 480
II 400 357 360
III 235 218 215
Dry land I 400 359 360
II 270 236 240
III 185 164 165
IV 85 73 75
Meadow V 225 208 210
V-130 125 125
Grazing VI 65 60 60
VI-55 50 50
VII 35 30 30
The appraisal indicates that actual values as found by county assessors and used for assessment purposes were, without exception, considerably lower than values arrived at by the market-data and income approaches.
The record presents three different methods of determining values as a prerequisite to ascertaining if adjoining counties with overlapping taxing districts are properly equalized for taxation purposes. These methods are *769official county appraisals or reappraisals, sales-assessment ratios, and spot appraisal studies.
Boone, Cas,s, and Polk Counties are concerned with the assessment of farmlands and urban property: Holt, Loup, Nance, Sarpy, and Wheeler Counties only with farmlands. None of these counties have had official reappraisals and the other criteria were necessarily relied on in regard to them. Much is said in the record and briefs before us regarding the desirability of correlating the three different criteria of value. This cannot be done any more than it is possible to correlate value on the basis of market data and capitalization of income. Two farm or ranch units may have identical income capabilities, yet one may have a greater fair market value than the other due to location, improvements, etc. Different appraisers of the same unit will arrive at different results. Sales of property within a county may not represent a correct picture of value for a multitude of reasons. There may be an insufficient number of sales and many of them may not represent true open-market transactions. No one of the three criteria available are perfect and, as a result, an element of judgment enters into this matter and must be exercised by assessing and equalizing authorities. This factor is illustrated in the case of Boone County and its neighbors. Sales-assessment ratios for these counties show the following:
1968 Sales
Assessment Ratios Changed to
County Urban Rural Urban Rural
Boone 26 21 31.2 33.6
Greeley 25 25 29.25 29.25
Nance 32 21 32 33.6
Platte 25 21 32.25 34.86
Madison 26 21 34.84 31.92
Antelope 31 24 31 24
Wheeler 26 28 26 35
It will be noted that after adjustment by the Board, there is little material difference in assessed values be*770tween the counties with the following exceptions. Greeley still appears a bit low on the basis of sales-assessment ratios, yet on the basis of a 1969 spot study of this county, it is deemed to be equitably assessed with the others. In other words, despite the conflict with the sales-assessment approach, the study made shows the county to now be assessed at approximately 35 percent of actual value. The appraisal study indicates that land in Greeley County is valued for assessment purposes at supposed actual values ranging from 48 percent to 79 percent of true market or actual values depending on the various classifications of land. These percentages average out to 23.73 percent and a 17 percent increase brings the average to 27.76 percent. The figures are not strictly accurate as allowance has not been here made for the variation in acreages of the several land classifications. It is obvious from the appraisal study that if this were done the figure of 27.76 percent would much more nearly approach the statutory 35 percent of actual value figure and would present a minimal variance therefrom. The same is true regarding rural property in Antelope County and urban property in Wheeler County where recent official reappraisals were had. The question presented under such circumstances is that always confronted in cases of conflicting evidence. In a jury trial, the jury must determine which evidence is reliable; here the Board must make this determination. In any event, no material variations appear.
Generally speaking, with reference to the counties involved in this action, the Board appears in each instance to have relied primarily on the best evidence available and' in each instance, there is evidence in the record to sustain its action. Appellants criticize the use of appraisal' studies on the ground that L,B. 391 (Laws 1969, c. 628, p. 2528) is unconstitutional. That point does not require decision. The appraisals were made primarily on the basis set out in section- 77-112, R. R. S. 1943. That statute does not appear to exclude other criteria *771of “actual value.” It states the formula therein contained is to be used only “where applicable.” Other means, when required to determine actual value, are not excluded.
This court will not substitute its judgment for that of the State Board of Equalization and Assessment if the action of the Board is not illegal, arbitrary, and capricious. See Carpenter v. State Board of Equalization & Assessment, 178 Neb. 611, 134 N. W. 2d 272. Neither will this court interfere with the discretion of the Board when discrepancies are slight and substantial equality and uniformity are attained. County of Kimball v. State Board of Equalization & Assessment, 180 Neb. 482, 143 N. W. 2d 893. The decision of the Board as to appellant counties should be affirmed.