B.J. Harris, a St. John realtor, got to the crux of St. John’s property tax problem when she testified at the Legislature’s Government Operations, Energy and Veteran’s Affairs Committee meeting held Thursday at the Legislature building.
Harris said that only 20 to 25 homes and an equal number of land parcels sell in a year. “Hardly enough to determine the value of the other three thousand or so homes or all land on St. John.”
“Of those homes which have sold, most were second homes or investment properties because there is minimal turnover of homes belonging to long-term residents of St. John,” Harris said.
Many St. John residents continue to maintain that their properties were way overvalued when assessed by BearingPoint during the U.S. District Court-ordered revaluation process commonly called the Berne agreement.
Harris cited two cases in which home values jumped 544 percent and 465 percent. In the first case, the value went from $346,500 to $1.8 million with the proposed taxes going from $2,600 to almost $7,000. In the second, the value rose from $326,950 to $1.5 million. The taxes would go from $2,450 to $5,625.
“These two houses would be lucky to sell for $700,000 because they aren’t equipped with fancy granite counters or swimming pools and spas and they don’t have big views,” Harris said, referring to the fact that the few homes that have sold on St. John were much more luxurious than those owned by most full-time residents.
Later St. John resident Pam Gaffin referred to these houses as trophy houses.
Property owners haven’t gotten into this trouble yet because they’re still paying property taxes at the 1998 assessed values rather than on the new assessments.
St. John real estate appraiser Elissa Runyon spoke about the issue of what she called family land, land owned by many members of subsequent generations.
A family land situation occurs because the entire property is passed on to all the heirs rather than each heir getting a divided segment. Many such properties languish in probate for years.
Occasionally, one or two of the family members pay the taxes, which Runyon said leads to hard feelings. She said these properties don’t have clear title, which makes them less valuable than properties with clear title.
“But they’re taxed at the same rate as land for sale,” she said.
Although Harris, Runyon, Gaffin and others who testified repeatedly pointed out the hardship imposed on St. John property owners by the high valuations, Delbert Hewitt, the chief operations manager at the Lieutenant Governor’s Office, maintained that the revaluations were correctly done.
“Market value generally determines mass appraisal,” Hewitt said.
The senators took up two bills sponsored by Sen. Craig Barshinger. Amendments offered by Barshinger clarified them a bit but it was decided they still need work and were held in committee.
One bill ties St. John property values to those on St. Thomas, but Hewitt said to do so wasn’t acceptable according to the standards of mass appraisal of real property set by the International Association of Assessing Officers. He described the organization as the recognized source for tax assessment standards.
The other bill gives priority to the recently dismissed government workers when it comes to getting property valuation jobs.
Barshinger urged his colleagues to think outside the box when it comes to devising ways to make St. John’s property tax burden fairer. For example, Gaffin proposed paying taxes on the value of property when it was last sold.
“When your great-great grandfather bought it for $25….” she said, inferring that the property would be valued at $25 until it was again sold.
Committee chairman Sen. Alicia “Chucky” Hansen, and Sens. Janette Millin-Young, Terrence “Positive” Nelson, Usie R. Richards, and Alvin Williams attended the meeting. In addition to Barshinger, non-committee member Sen. Patrick Simeon Sprauve also attended.
