Representative Otto posted the following comment on the blog, in response to my argument that the proposed amendment to allow homesteads to be valued only as a residence violates the principle that taxation should be equal and uniform, and I wanted readers to be aware of it. Mr. Otto writes: This does not destroy fair and equal. It requires “residence homesteads” to be valued fairly and equally as a residence. Everyone seems to make the assumption that if “highest and best use” is used to value a homeowner’s lot value then that homeowner has numerous offers for his residence at commercial real estate values, or could easily put it on the market for that. That just isn’t so. What is happening is someone unlucky enough to be close to a commercial area can have their lot value affected by commercial land values in the area. What is being done under the “highest and best use” is creating unequal appraisals amongst homeowners and is resulting in condemnation by valuation. Prop 2 only benefits “residential homesteads”, where someone actually lives and claims his homestead. So your answer to the gentleman who tesitified before my select committee about his residential lot going from $30,000 in 2007 to $300,000 in 2008 (oh, and his home was dropped from $120,000 to $60,000 that sounds fair doesn’t it?) is sell your property for the windfall because if the appraisal district says it’s worth that under highest and best use, it MUST be so. How would you like to make his argument before the appraisal review board regarding highest and best use? My comments: I understand the problem here. It does seem unfair. No one wants to see a person driven out of his homestead due to higher taxes. Still, if an appraisal board makes its decision based upon current market conditions (and I am fully aware that appraisal boards are not necessarily fair and rational entities), then the owner of the property has a substantial asset that is presumably in an area of high real estate activity. That property can be sold for a considerable sum, and if the appraisal board has done its work properly — a big IF — then no injustice has been done. A lot of rural property has sold for just such reasons, to the benefit of a lot of landowners over the years. What is needed is the ability to review appraisal board decisions. Fortunately, Mr. Otto passed a bill last session providing for appeals to be heard by state hearing examiners. In general, I think it is a mistake to carve out exceptions to the principle of equal and uniform taxation, as well intentioned as this one is.