Members of the 32nd Legislature’s Committee on Rules and Judiciary, and testifiers on the issue of property tax assessments on St. John, appeared to have differing ideas about what bill was up for discussion at a committee hearing at Cruz Bay’s legislative annex Thursday.
The hearing’s written agenda indicated the committee would consider bill No. 32-0030, sponsored by Sen. Janette Millin Young, but citizens and government officials who showed up to testify mostly responded to an “amendment in the nature of a substitute” bill that was never officially introduced.
By the hearing’s end, no bill had been forwarded out of committee. Some senators and testifiers said Thursday they had hoped to see some forward movement towards resolving the long-simmering issue of property tax assessments on St. John.
For more than a decade, many residents of St. John have said their assessments are flawed and unfair, leading to tax bills that don’t match the limited government services they receive, and threaten to displace long-term and generational families.
“The property tax issue on St. John is an elephant in the room as big as any issue in the Virgin Islands,” Sen. Dwayne DeGraff said Thursday.
Both of the bills discussed at the committee hearing seek to address the issue of property assessments on St. John, but do so in strikingly different ways.
Millin Young’s bill, which cleared the Legislature’s Finance Committee in April 2017 but stalled in Rules a month later, proposes a cap on assessment increases on certain properties in certain instances, and puts pressure on the territory’s Tax Assessor’s Office to respond to appeals in a timely manner.
The amendment in the nature of a substitute, sponsored by Sen. Tregenza Roach, strikes the content of Millin Young’s bill and replaces it with different language. The amendment seeks to address St. John’s assessment woes through a tax credit program based on individual property values, income levels and the percentage of federally-owned land on each of the Virgin Islands, highest on St. John due to the V.I. National Park.
The presence of the park is a factor in land scarcity on St. John, driving up property values.
At times it seemed to be unclear even to senators which of the two bills the committee was supposed to be considering. In addition to not being formally introduced via a motion, Roach’s amendment had not yet been vetted by the Legislature’s legal counsel.
Sen. Positive Nelson said of the amendment, “There’s no indication that it’s been through legal counsel. No stamp. No anything.”
“We’re referencing and getting testimony on an amendment in the nature of a substitute that I just got today myself. And I’m still wondering if this is the matter before us,” he added.
Over the course of the hearing, the un-introduced amendment received more discussion than the bill on the committee’s agenda for reasons that were never fully explained.
Under questioning by Millin Young, Dolace McLean, legal counsel at the Lt. Governor’s Office, said she had a hand in crafting the amendment. Earlier in the hearing McLean had praised the amendment as an “intelligent and cost-efficient” way of addressing St. John resident’s tax complaints.
The Lt. Governor’s Office, to include the Office of the Tax Assessor, does not support Millin Young’s bill, partly because it would remove tens of millions of dollars in tax revenue from the territory’s General Fund. McLean said the amendment offers a better balance of relief to St. John’s tax payers and stability of government revenue.
Tax Assessor Ira Mills said many property owners on St. John got a steep increase in their property tax assessments in 2013 because values had been kept artificially low since 1998. Since Millin Young’s bill sets the cap back at pre-2013 values, assessments would actually reflect 1998 numbers, he said.
McLean and Mills said Roach’s amendment is in line with the recommendations of a task force formed by Lt. Gov. Osbert Potter to study the issue in 2016.
The amendment may actually be too generous, according to McLean. She said the Lt. Governor’s Office’s position is that a part of the proposal that sets qualifications for a tax credit at properties assessed below $750,000 should be lowered to $450,000.
St. John resident Pam Gaffin said the amendment doesn’t address the entire issue at hand, because assessments are not only high, but also frequently incorrect due to the proximity of modest homes to mega-mansions.
“I have extensive comparison studies to show the insane inconsistency of assessing values on St. John and have presented them to the Legislature many times,” Gaffin said. “Always the solution is to make an appeal – appeals are for the exceptions.”
“This is not a problem of exceptions this is a problem of completely unacceptable inaccuracies under appraisal laws,” she said.
Although there was disagreement about how to address what many describe as gentrification on St. John, all senators present Thursday agreed the problem exists and deserves attention.
“St. Johnians’ voice has been diminished in the last few years. You ask the question why, and how come this could happen when St. John has the least amount of land and yet pays the most in taxes,” said Millin Young.
Roach said a legislative approach to some of St. Johns unique economic issues is indeed appropriate. He said many of the St. Johnians that went to school with him on St. Thomas have moved away due to their home island becoming increasingly unaffordable.
“The whole character of St. John has changed, because none of those people live here anymore. None of them live here anymore. Not one single person who I went to school with,” he said.
Myrtle Barry, a member of St. John’s activist Unity Day Group, said St. Johnian property owners are “slated for displacement.” She said she feels the V.I. government is reluctant to address the issue due to the high amount of tax revenue collected from the island’s luxury villas rentals and the high assessment value of lands around the national park.
“Our plea for legislative remedy has been swallowed up by the territory’s financial condition,” she said.
Nelson made a motion to hold Millin-Young’s bill in committee for further deliberation. Voting yes were Nelson and Sens. Sammuel Sanes and Novelle Francis Jr., while Millin-Young voted no. Committee members excused were Sens. Myron Jackson, Janelle Sarauw and Jean Forde. Non-committee members present for the hearing were Roach and Kurt Vialet.
Oh to be in the position of rising property values! But unfortunately, also rising tax assessments. What to do?! One can either sell the property and move elsewhere, or find a way to pay the property tax. But it would seem that what long-time property owners are trying to do here is create a way to keep the property, and not pay the assessed tax. The only fair way to fix this problem is to drastically lower the property taxes for everyone, including the luxury villas. Any other solution is unfair and unconstitutional. Fewer property tax dollars would be collected, but rental villas could make up for the loss of revenue. They already pay a 12.5% tax, on top of gross receipts tax. If someone wants to rent their property, they too can pay this tax. The tax could even be increased to offset the loss of property taxes. Just a thought.
Your Thought is Bull. So you trying to tell me that someone who owns a small little house for years should see a massive increase in their taxes because someone else comes next to them and build a mansion.
My Cousins live in a small house for over 40 yrs rung de pond. now 40 yrs later the use to be pond is now the entrance to where the barges come in to dock. people come in and build these mega mansions because now its ocean front on either side of there little house, (cant even see the house anymore). and you trying to tell me 2 people who in their 70’s and 80’s property tax should go from $800 dollors a year to over $8k a year. what kind of bull crap is that. so according to you they must sell because they cant afford to pay the inflated taxes in the little house that was built over 40 years ago.
Read my comment again. You will see that I am suggesting LOWERING property taxes for ALL property owners. Rental villas would pay a higher rental tax, as well as gross receipts, to make up for the loss of property taxes. Or since your cousin’s property has drastically increased in value, they would have the choice or opportunity to sell it for a lot of money. It happens all the time in the real world out there (Cali, NY, NJ). I’m not saying they should be taxed 10 times what they used to pay. That’s your elected representatives who are doing that. Talk that.