Page 17 - Boca Exposure - September '21

Boca Exposure, Page 17
Palm Beach County Property Appraiser’s Office

Dear Taxpayer: The next stage in the Also highlighted in this month’s newsletter is the great
Happy autumn! tax roll process is the news that our office has been awarded the Certificate
My office once again petition filing period. of Excellence in Assessment Administration from the
asks that all visitors wear Property owners have International Association of Assessing Officers. I am so proud
facial coverings and the option to appeal their that our office has achieved this prestigious recognition in
practice social distancing property’s assessment service to you, the people of Palm Beach County.
while indoors on county or denial of portability Respectfully,
property. We continue to before the county’s Value Dorothy Jacks, CFA, AAS,
implement measures to Adjustment Board (VAB), Palm Beach County Property Appraiser
ensure the health and safety which is administered by We Value What You Value
of our staff, while also the Clerk of the Circuit
maintaining the highest Court and Comptroller. The Value Adjustment Board
level of safe service to the taxpayers of Palm Beach Florida law sets the value
County. petition filing period, Process
By now, all property owners in Palm Beach County which begins when the
have received their 2021 Notice of Proposed Property notices are mailed and If you feel that the market value of your property
Taxes and Assessments from my office. Remember this is ends 25 days later. This is inaccurate or does not reflect fair market value as
not a bill, but rather an estimate of your taxes based on the year’s deadline to file a of January 1 or you are entitled to an exemption or
proposed tax rates, your property value and exemptions. petition is Sept. 13. classification that is not reflected on the 2021 Notice
of Proposed Property Taxes, contact our office for an
informal review. Call us at (561) 355-3230 and we will
connect you with an appraiser or exemption specialist
to discuss your concerns. If we are unable to resolve the
matter, you have the right to file a petition for adjustment
with the Value Adjustment Board (VAB).
The Bull Is Back... Will Raymond James Financial Services, Inc. of the Circuit Court and Comptroller, which is independent of
The VAB is administered by Palm Beach County’s Clerk
It Keep Charging? Arthur Rottenstein the property appraiser’s office. The Board is made up of five
individuals: two from the county’s board of commissioners,
Registered Securities Principal
On August 18, 2020, the S&P 500 set a record high for the first time 561-241-6616 one from the county’s school board, and two citizen
since COVID-19 ushered in a bear market on February 19. The cycle members. They approve and use special magistrates, who are
from peak to peak was just 126 trading days, the fastest recovery in ArthurRottenstein@ experienced in property appraisal techniques or legal matters,
the history of the index, erasing losses from an equally historic plunge RaymondJames.com
of almost 34% in February and March. 1 bocaratonfinancialplanner.com to conduct hearings and recommend decisions to the VAB
Based on the traditional definition of market cycles, the new record for final approval. Special magistrates will review property
confirms that a bull market began on March 23 when the index closed
at its official low point. This also confirms that the February-March valuation, denials of portability, deferrals, and change of
bear market was the shortest on record, lasting just 33 days. 2 ownership or control determinations. All final rulings are
Although the strong comeback is good news for investors, there
is a striking disconnect between the buoyant market and an economy determined by the VAB.
still struggling with high unemployment and a public health crisis. Joseph Carpenito
The market is not the economy, but the economy certainly affects the
market. So it may seem puzzling that the market could reach a record Financial Advisor Filing A Petition
high not long after the largest quarterly decline in gross domestic
product (GDP) in U.S. history. 3 561-241-6616
Joseph.Carpenito@ Florida law sets the deadlines for filing a petition on or
raymondjames.com. before the 25th day following the mailing of the notice from
301 Yamato Road, Suite 3160 our office. This year’s deadline is Sept. 13. These deadlines
Boca Raton, FL 33431 do not change, even if you choose to discuss the issue with
our office. The VAB may charge $15-plus for filing a petition.
PDF petition forms are available on our website or
Optimism vs. exuberance online petition filing is available through the Clerk of
Whereas GDP measures current economic activity, the stock market is forward looking. The rapid bounceback suggests that investors believe the Circuit Court and Comptroller.
the pandemic will be controlled in the not-too-distant future and that business activity will return to normal. Whether this optimism is warranted
remains to be seen. The current economic situation remains tenuous, but there are hopeful signs. Once a petition is filed, you will receive a notice
A vaccine could be available in early 2021, later than anticipated but offering light at the end of the tunnel. In the meantime, the virus with the date, time, and location of your hearing at least
4
continues to suppress business activity. The 10.2% July unemployment rate represented a big improvement over the previous three months, but
it was still higher than at any time during the Great Recession. Recent projections of corporate earnings suggest they will not contract as much as 25 days before your hearing date. You can reschedule
5
expected, but they will still contract. GDP is projected to make up ground in the third and fourth quarters but remain negative for the year. 7 your hearing once for good cause. If your hearing is
6
The extreme of market optimism is irrational exuberance, and there may be some of that at work in the current situation. The proliferation of
low-cost trading apps has encouraged less-experienced investors to trade aggressively, which might be driving some of the market surge. 8 rescheduled, the clerk will send notice at least 15 days
before the rescheduled hearing.
Economic stimulus
The single, most important factor behind the market recovery is the deep commitment from the Federal Reserve to provide unlimited support Fifteen days prior to the scheduled petition hearing,
through low interest rates and bondbuying programs. For some investors, the fact that the economy is still struggling has a strangely positive effect you are required to provide our office with a list and
in guaranteeing that the Fed will keep the money flowing. 9
Further support from the federal government is more uncertain, but the strong market suggests that investors may be counting on a second summary of evidence that you will present at the hearing.
stimulus package. 10 You can submit your evidence electronically through the
Nowhere else to go Clerk of the Circuit Court and Comptroller. Seven days
Low interest rates make it easier for businesses and individuals to borrow, but they have reduced bond yields to the point that many investors before the VAB hearing, our office is required to provide
are willing to take on greater risk in equities in order to generate income. Money that might normally be invested in the bond market has poured
into stocks, driving prices higher. This situation has its own acronym: TINA, There Is No Alternative to Stocks. 11 you with a list and summary of evidence, which will be
presented at the hearing.
Big tech at the wheel
While the S&P 500 is generally considered representative of the U.S. stock market as a whole, the recovery has centered around technology The Hearing
companies, which have helped provide goods and services throughout the pandemic. The Big Six tech stocks — Apple, Facebook, Amazon, Netflix, At the VAB hearing, you may represent yourself or
Microsoft, and Alphabet (Google’s parent) — were up collectively by more than 43% for the year through August 18. By contrast, the rest of the
companies in the S&P 500 were down collectively by about 4%. The Big Six tech companies now represent more than one-fourth of the total seek assistance from a professional. Some examples of
market capitalization of the S&P 500 and thus have an outsized effect on index performance. 12 professional representation might include an attorney,
One question facing investors is whether to chase the winners or look to stocks and sectors that still lag their previous highs and may have
greater growth potential. Chasing performance is seldom a good idea, but there are solid reasons why certain stocks have been so successful in a licensed real estate appraiser or broker, or a certified
the current environment. public accountant. If someone who is not a licensed
Are stocks overvalued? professional represents you, you must sign the petition
The most common measure of stock value is price/earnings (P/E) ratio, which represents the stock price divided by corporate earnings over the or provide written authorization or power of attorney for
previous 12 months or by projected earnings over the next 12 months. The projected P/E ratio for the S&P 500 on August 18 was 22.6, the highest
since March 2000 at the peak of the dot-com bubble. Big tech stocks were even higher, trading at 26 times their projected earnings, and the Big your representative.
Six were higher still at more than 40 times projected earnings. 13-14 During the hearing, a special magistrate will ask you
A different measure of stock value compares the total market capitalization of all U.S. stocks with GDP. By this measure, the market was 77.6%
overvalued on August 18, by far the highest valuation ever recorded. The previous highs were 49.3% in January 2018 and 49.0% in March 2000. to present your evidence and testimony in support of your
This extreme ratio illustrates the current disconnect between the stock market and GDP, but a significant GDP increase during the third quarter petition. In most cases, to win a reduction in appraised
could bring it down. 15
In considering these valuations, keep in mind that these are extraordinary times, and traditional expectations and measures of value may value before the VAB, you must prove that the county’s
not tell the whole story. If nothing else, the extreme volatility and rapid market cycles of 2020 have illustrated the importance of maintaining a appraisal of your property exceeded market value and
diversified all-weather portfolio and the danger of overreacting to market movements. While new records are exciting, they are only signposts
along the road to achieving your long-term goals. explain why. A representative from our office will then
The return and principal value of stocks and bonds fluctuate with changes in market conditions. Shares, when sold, and bonds redeemed present evidence in support of the property valuation,
prior to maturity may be worth more or less than their original cost. Investments seeking to achieve higher yields also involve a higher degree
of risk. Diversification is a method used to help manage investment risk; it does not guarantee a profit or protect against investment loss. The
performance of an unmanaged index such as the S&P 500 is not indicative of the performance of any specific investment. Individuals cannot invest
directly in an index. Past performance is not a guarantee of future results. Actual results will vary.
1, 3, 6, 8, 11, 13) The Wall Street Journal, August 18, 2020
2) CNBC, August 18, 2020
4, 9) The New York Times, August 18, 2020
5) U.S. Bureau of Labor Statistics, 2020
7) The Wall Street Journal Economic Forecasting Survey, August 2020
10) CNBC, August 14, 2020
12, 14) The Washington Post, August 20, 2020
15) Forbes, August 18, 2020

Arthur Rottenstein is a Registered Securities Principal and Branch Manager with Raymond James Financial Services, Inc. in Boca
Raton and founder of Portfoliorepair.com. He has been managing the financial affairs of a number of select families in South Florida
since 1982. Please feel free to call for an appointment at (561) 241-6616 or email him at arthur.rottenstein@raymondjames.
com. Please feel free to visit his website at bocaratonfinancialplanner.com. Securities offered through Raymond James Financial
Services, Inc., member FINRA/SIPC. Investment Advisory services offered through Raymond James Financial Services Advisors, Inc.
Palm Beach County Property Appraiser’s Office on page 18