Why is accurate valuation important for municipalities in attracting businesses?

Accurate valuation is crucial for municipalities in attracting businesses because it helps demonstrate fair property costs to prospective businesses. When a municipality can provide a transparent and fair assessment of property values, it instills confidence in potential investors regarding the real costs of doing business in that area. Fair valuations can show that businesses will not be subject to inflated property taxes, which is important for decision-making.

Prospective businesses are often concerned about the overall cost of location, which includes property taxes influenced by valuation. By presenting accurate and fair property assessments, municipalities can attract businesses that seek predictability and stability in their operating costs. This information can be pivotal during their site selection process, as businesses will look for locations where they feel they are being treated equitably and where financial forecasts can be reliable.

In contrast, reasons related to establishing a higher tax base, ensuring accurate sales tax revenue, or maximizing state grants, while important in other contexts, do not directly address the primary concern of businesses regarding their immediate operational costs and the fairness of property valuations.