July 2, 2008 — Despite arguments by a V.I. government attorney that the Board of Tax Review is functioning as required by a 2003 property tax settlement agreement, District Court Judge Curtis Gomez said Wednesday he was "not convinced" it was so.
Eight years ago, a group of property owners sued the V.I. government, alleging it was assessing commercial properties based on replacement rather than actual property value — a method, they said, that resulted in inflated values. Judge Thomas K. Moore, then-U.S. District Court judge, agreed, and in 2003 ordered the government to conduct a thorough revaluation of commercial and residential properties.
Meanwhile, property tax values were frozen at 1998 levels until the project was complete and a new valuation system — which had to be certified by a court-appointed special master — was in place. In late March, special master Joseph Hunt sent a favorable report to U.S. District Court Judge Curtis Gomez – who replaced Moore– saying that the government new assessment system is acceptable.
However, the government must maintain a "professional staff and reliable market data," to keep up with constant changes in the real estate market, Hunt added. He also said that a functional tax review board — which was included as a condition in the court's original 2003 order — should be put in place to ensure that "fairness and uniformity" play an integral role in the appraisal process.
During a hearing held in District Court Wednesday, government officials said the board has met twice in about the past year. Scheduling conflicts and the inability to maintain a quorum prevented the meetings from taking place, Finance Commissioner Claudette Watson-Anderson said while on the stand. But meetings held at the end of May and June did resolve 121 cases for 39 taxpayers, she added.
Some cases handled by board date back 1999, Watson-Anderson said, adding that there are currently 374 appeals pending. A majority of the taxpayers who filed the appeals have been issued tax reversion notices, she explained.
"If the taxpayer filed an appeal because the taxes they were paying were higher than the previous year, they were issued a reversion notice that states the government is willing to go back to the 1998 assessment level on their prior year's taxes," she explained. The board put the reversion policy in place to reduce the backlog of outstanding cases and move forward on more current appeals, Watson-Anderson said.
The remaining appeals will be handled on a case by case basis, she added. From now on, monthly board meetings will also be scheduled, she said.
Meanwhile, the board is in the process of hiring three attorneys — one each for St. Thomas, St. John and St. Croix — to serve as hearing officers for appeals cases, which the review board handles.
By law, the Finance commissioner serves as the chair of the Tax Review Board.
Attorney David Bornn, representing commercial property owners Cyril V. Francois Associates and Twenty-One Queens Quarter, who joined the suit with Gary Berne, said the court's 2003 settlement agreement mandated that a functioning Board of Tax Review should have been up and running far sooner than the last year. Meanwhile, the board currently does not have any established rules and procedures for meetings, he added.
The board is also required by law to notify taxpayers when their case is being heard, said attorney James Derr, representing Berne Corp. While on the stand, Watson-Anderson said that taxpayers were not asked to appear at the board's meetings in May and June. But Walter Challenger, the board's executive director, said he had issued notices of appearance to some taxpayers prior to the May meeting.
As Gomez — who presided over Wednesday's hearing — frequently questioned whether the board is "committed" to getting the appeals handled on a timely basis, Challenger added that that the previous 60 day turnaround time required by law is "currently a problem," and that the board is "working as hard as we can to comply" with a new 120-day requirement.
"Previously, the board was short-staffed, and we did not have enough board members to make up a quorum," Challenger said. "There was also some times where board members were committed to coming and at the last minute had some conflicts. You must remember that the board members, judge, are volunteers. They have their own personal business to take care of. The board has no control over them."
Derr also pointed out that the Legislature had appropriated funds to the board in 2003 to hire hearing officers.
No decision was made during Wednesday's hearing..
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