The Portsmouth city assessor’s office reduced the overall real estate assessment values for the city by more than $18 million amid a review of inaccuracies in current assessments, Interim City Assessor Janey Culpepper disclosed this week.

City staff is reviewing last year’s assessments and making adjustments because of inaccuracies Culpepper spotted in the tools used to conduct the assessments and the values determined, city leaders say.

The review, which has the potential to reduce the amount of tax revenue collected by the city, comes as the City Council is considering the budget and members have expressed a desire to lower the real estate tax rate.

Before the City Council’s ousting of City Assessor Patrick Dorris earlier this month, he presented real estate reassessment data that showed a growth of more than 12% for residential properties, which followed an 8% increase in 2021.

Increases are happening across Hampton Roads and the nation as a result of market conditions.

But during the City Council meeting Tuesday, members said Culpepper called to say the reassessments may not be accurate, particularly when it comes to the city’s land book value.

“It was brought to our attention that the tools, the process that was used was inaccurate and that there’s going to be an adjustment on the assessments that were put out,” Vice Mayor Lisa Lucas-Burke said.

Culpepper told The Virginian-Pilot she sees that land values were increased “tremendously,” but she doesn’t yet know why. She declined to provide additional details but said she plans to provide more information on her review and findings April 11 when City Council discusses the proposed budget.

For years, the city has taxed real estate at a rate of $1.30 per $100 of assessed value. Even if the rate remained the same this year, residents would pay more in taxes because of the rising assessments. A home valued at $235,000 that owed roughly $3,000 in annual taxes will jump to $3,400 annually, according to Dorris.

To offset the rising tax burden and remain “net-neutral” in the operating budget, Dorris suggested lowering the tax rate to $1.17. But council members are considering a reduction of about 5 cents, according to Lucas-Burke and Councilman Bill Moody.

“We’re the highest rate in Hampton Roads,” Moody said during the meeting. “Personally, I think that’s time to end.”

Lowering the rate by 5 cents would put Portsmouth closer in line with surrounding jurisdictions and right at Norfolk’s rate of $1.25 per $100 of assessed value.

But Portsmouth’s proposed $834 million budget for fiscal year 2024 keeps the rate at $1.30, which would provide an estimated $124 million of revenue. Culpepper said the revenue that could be generated from a lowered rate is being determined as she reviews the reassessments.

“We’re taking a look at the real estate tax rate,” Lucas-Burke said during the meeting. She added that the revenue generated from the newly opened casino, once determined, may lead to another decrease in the future.

Councilman Mark Hugel said some assessment increases don’t seem to track with what’s happening in the market.

Culpepper said any residents with concerns about their real estate tax assessments should contact her office in person or by phone. The appeals process spans to April 7.

“We will look at it individually and we will look at the entire neighborhood,” she said. “And if a change is necessary, we will make that change and you will receive a revised notice.”

Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com