Ryder Appraisal District
Ryder Appraisal District (RAD) is the county agency responsible for property taxation in Ryder
County, South Carolina. RAD is charged with the appraisal of property for tax purposes, the
determination of the amount of tax owed by a property owner, and the collection of these property
taxes. There are approximately 12,000 residential properties in Ryder County.
James Bradford was elected last year to the position of Ryder County Tax Commissioner. For many
years, taxpayers have complained about the inequities in residential property tax assessments in
Ryder County. Bradford promised county residents that, if elected, he would do what he could to
make the property taxing system more equitable.
The current residential property taxing system in Ryder County has evolved over several decades.
Unimproved property, i.e., a residential lot without a house, is currently taxed at a flat amount of
$150. Owners of improved residential property are charged a flat amount plus an additional amount
based on the characteristics of the house built on the property, such as the total square footage of
heated/cooled floor space, the number of bedrooms, the number of bathrooms, etc. If the owner
actually lives in the house, he is given a homestead exemption which reduces his property tax bill
by a fixed 10%. If that homeowner is also retired, he is entitled to a retirement exemption that
reduces his property tax bill by another 10%. While it would seem that the current system of taxing is
fair, several factors have led to inequities.
Each year, new property assessments are mailed out to property owners. These assessments tell the
property owners the value of their property as determined by RAD for taxing purposes. After the new
assessments are mailed, the property owners are given the opportunity over a period of one month to contest
their assessments. A panel known as the County Review Board hears the appeals and makes any
adjustments they deem necessary to property assessments. The County Review Board has been known
in the past for being "too responsive" in changing assessed values. Those homeowners who complain to
the Board are usually granted their reduction. Unfortunately, many of these decisions have led to taxing
inconsistencies and discrepancies across the county.
RAD is supposed to reappraise each piece of residential property once every three years. In this way, the
RAD data base is kept up to date and includes recent improvements to residential property, such as
swimming pools or other additions. However, due to poor economic conditions, county governments
have been receiving less and less funding from the state and federal governments. The appraisal staff at
RAD has dwindled in the past few years to one full-time appraiser and there are no funds available for
hiring professional appraisers on a part-time basis. Over time, the data base has become outdated and
inaccurate. This, of course, has led to further inequities in the taxing system.
James Bradford has proposed a simplified property tax assessment plan that he hopes will avoid the
problems and inequities of the past and cost less to implement than the current system. His plan is to tax
unimproved property in the same way as before using the current rate based on lot size. For improved
properties, the new tax will consist of a flat tax plus an amount based on the square footage of
heated/cooled space in the house. Both the flat tax and the variable tax components are yet to be
determined. Bradford has decided to maintain the current 10% reductions for homestead exemptions and
retired homeowners. The square footage measurement would be made once for each house, with an
appraisal update occurring whenever an addition is made to the house.
This will reduce the workload of RAD appraisers and the amount of necessary recordkeeping. The
simplified taxing system should also result in more consistency in taxation and fewer complaints from
homeowners about incorrect assessments.
There have been two major concerns expressed about switching to the simplified tax assessment plan. First,
it is important to try to keep individual taxes under the new plan as close as possible to what they are
currently, otherwise there will be problems. Everyone understands that some property owners will have
higher taxes and others will have lower taxes, but the size of the changes should be minimized as much as
possible. Secondly, the new tax plan must be revenue-neutral, that is, the total amount of property taxes
under the new structure should be roughly the same as before. James Bradford has said that attention to
the first concern will largely mitigate this second concern.

The current database contains information on the square footage of each house in Ryder County. Bradford
believes that these data may not be accurate. In most cases, the recorded square footage is reported by the
builder and is never checked by RAD. Before launching a massive effort to determine the square footage of
each house in Ryder County, Bradford has decided to see whether or not the current data are sufficiently
accurate.
In fact, James Bradford believes that he can kill two birds with one stone. He has collected a random
sample of 80 residential properties from around the county. Over the course of the past two months, the
staff appraiser has examined the houses on these properties and their blueprints to come up with an
accurate estimate of the actual square footage of heated/cooled space of each house. Other information
from the RAD data base was also included in the sample information. From this sample, James Bradford
wants to do two things. First, he wants to know whether or not the square footage estimates in the current
data base differ significantly from the actual square footage values. Secondly, he wants to use the sample
data to estimate the flat tax and the tax rate per square foot that must be charged in order to minimize
the changes from the current tax system for improved property owners.

 
The data from the sample of 80 residential properties are contained in the file RYDER.DAT on the
Data Disk. The Data Description section contains a description of this data file. Using this data set
and other information given in the case, first help James Bradford decide whether or not the square
footage information in the data base is significantly different from the actual values. After that,
determine the flat tax amount and the tax charged per square foot that will accomplish his goals.
The Case Questions will assist you in your analysis of the data. Use important details from your
analysis to support your recommendation.

Write a Managerial Case (Introduction, Statistical Results, Conclusion)