Monday on St. John, the Finance Committee considered and then held a bill aimed to reduce increases in “assessed” real property values, based in part on family connections to the property owner.
Property taxes have been a contentious issue for many years for St. Johnians in particular. As wealthy individuals have purchased property on the island, assessed property values for St. John have increased at a greater pace than the rest of the territory, which means that long-time St. John residents have seen their property taxes increase more than homeowners elsewhere in the territory.
This led to lawsuits over how taxes are assessed and many claims by St. Johnians that assessments on that island are unfair. (See Related Links below) Unless a V.I. constitution is enacted creating separate property tax districts, property tax rates may not vary from island to island, making it difficult to carve out a special exemption specifically for St. John. The Legislature can, however, increase homestead exemptions or lower overall rates.
The bill sponsored by Sen. Janette Millin Young would legislatively limit increases in assessed values of some properties but not others, based on homestead exemptions and whether the property remained in the same hands or was transferred to family members, up to cousins in the second degree.
If anyone disputed their property assessment, the V.I. government would have to perform a new property assessment within 60 days, or the landowner disputing it would be entitled to pay based on the previous assessment. [Bill 31-0324]
“We want to make sure that whatever it is we do with our property taxes and the evaluation of property taxes that we are being responsible on behalf of the people of the government and that we’re also bringing the relief needed and called for by the people,” Millin Young said, introducing the measure.
Tax Assessor Ira Mills said the bill’s exemptions would be very difficult to enforce, would require “illegal” assessments and would decrease much-needed tax revenues, while having unintended consequences that did not aid property owners.
“If the tax assessor cannot review a 2013 assessment in 60 days, then for all intents and purposes, the assessed value reverts to 2012. But the 2012 value is a capped value, at 60 percent, and therefore is in violation of the law that requires assessments at market value,” Mills said.
“Furthermore, it will create inequities among taxpayers – those who know how to work the system will have the benefit of an illegal capped value; those who do not will be assessed at higher market value rates,” he said.
Mills also said resetting rates at a prior assessment “has the effect of taxpayers being able to freeze the tax values indefinitely based on this simple technicality – the net outcome is that projected tax revenues can be easily destabilized and anticipated revenue collection can be disrupted based on a two month delay.”
Several St. John residents testified in support of the bill.
Resident Myrtle Berry said, “Our property tax assessments are outrageous. Outrageous assessments result in outrageous property taxes. Berry added she felt the taxes were “unreasonable, unjust and injurious,” and that “everything hinges on the assessment.”
She suggested the property values were being incorrectly assessed to remove Virgin Islanders from their land. “Even in cases where no resolution has been made, property tax bills continue to come and residents are expected to pay,” Berry said.
Sen. Jean Forde said, “I don’t think we are on the same page. The question that must be asked is, ‘What is a fair assessment of property?’”
Forde asked Mills to point out some of the challenges faced in the Office of the Tax Assessor that affect their ability to produce accurate assessments.
Mills said that hiring additional staff, specifically certified general appraisers, and system upgrades could cut down on backlog and allow for more accurate appraisals.
Other St. John residents disagreed and blamed the formula used by assessors for what they asserted are vast numbers of inaccurate assessments.
According to Pam Gaffin, a member of the V.I. Unity Day Group, an advocacy group devoted to the question of St. John property taxes, “The problem is the formula that this data is being plugged into was written for stateside suburban communities where they have neighborhoods that are identical.”
Gaffin said that in those cases, any additional renovations or additions to those homes would increase the value of that property as well as the property tax. But she said she feels the model is not intended for the unique environment of the Virgin Islands.
Other St. Johnians gave testimony objecting to fluctuating property tax bills and decrying what they felt was the injustice of smaller properties being taxed at higher rates than larger more developed plots.
The hearing also heard discussion concerning the practice of many residents who are reducing their taxes by deeding properties to the National Parks once deceased.
Senators in the Finance Committee voted to hold the measure in committee. Committee members present were Sens. Marvin Blyden, Clifford Graham Myron Jackson, Positive Nelson, Tregenza Roach and Sammuel Sanes. Sen. Kurt Vialet was absent. Nonmembers present were Millin Young, Forde, Sens. Novelle Francis, Justin Harrigan and Almando “Rocky” Liburd.
