House passes bill that would give tax department control of property appraisals

By ETHAN WEINSTEIN

VtDigger

Published: 03-30-2023 5:35 PM

A bill that would give the Vermont Department of Taxes control of property appraisals passed the House on Wednesday.

H.480 would require property reappraisals to take place at least every six years and would move the responsibility for those reappraisals from municipalities to the state. 

The reimagining of Vermont’s property valuation system, which would gradually take effect over the next few years, would bring the state in line with the rest of the country, the bill’s sponsor, Rep. Emilie Kornheiser, D-Brattleboro, said on the House floor on Tuesday.

“No other state in the nation manages reappraisals at the town level,” she said.

Unlike many states, Vermont does not require towns to update their property values on a regular basis. More than 100 towns have not reappraised in a decade. 

While the vast majority of towns are now under a reappraisal order, a dearth of appraisers has delayed the process. And with the real estate market ballooning in the last two years, towns’ grand lists — the list of every taxable property in a community — no longer reflect reality.

Currently, reappraisals are triggered when the state determines that the property values on a town’s grand list no longer accurately reflect what properties are selling for. The state adjusts for out-of-date property values using the common level of appraisal, or CLA, which adjusts property owners’ tax bills to more accurately reflect a property’s value. If H.480 becomes law, it would nix the CLA.

The legislation leaves much of the implementation for a statewide reappraisal system up to the tax department. A series of reports, mandated by the bill, would allow the department to recommend changes in the reappraisal system and to create the process for appealing property valuations. The department would also be tasked with coming up with new categories for properties that are homesteads, which are primary residences, and non-homestead.

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In explaining the bill to her colleagues, Kornheiser highlighted that national statistics show low-income people and people of color often have their properties overtaxed and undervalued at sale. 

“This bill addresses a systemic piece of the wealth gap,” she said.

Dissenting voices

Not everyone sees the transformation of Vermont’s reappraisal system as a welcome change.

Lisa Wright, president of the Vermont Assessors and Listers Association, said the group opposes the state takeover of reappraisals. 

“We’re kind of astounded,” Wright said, “that this thing seems to be moving like a runaway freight train.”

While the association’s members generally support regularly scheduled reappraisals, Wright said, problems arise with state encroachment on local control.

There’s no substitute for “boots on the ground” appraising, she argued, fearing that state officials appraising from their desks could produce unfair, “regressive” property valuations. 

According to Wright, the state’s property valuation and review division, which would handle the new system, is “already overburdened” and struggles to recruit the staff it needs. 

“Why would the state have any easier job recruiting those people?” she asked.

Though Wright stressed some of her critiques were her own and not the association’s, she believed many of the group’s members share her views on H.480.

Unanswered questions

The bill faced opposition on the House floor from representatives who said it was too vague, especially regarding the to-be-determined property valuation appeal process. 

“There's just a few too many questions that are unanswered for me,” said Rep. Butch Shaw, R-Pittsford. “The biggest question is, what’s going to happen in the appeal process?”

As a longtime lister, Rep. Mark Higley, R-Lowell, said he opposed taking away local control and placing power in the hands of state assessors. 

“These assessors, they don’t know the towns, they don’t know the townspeople,” he said.

Higley also took offense at the bill’s findings regarding bias in assessing.

“To say that U.S. property owners of color are statistically more likely to have their properties overvalued during appraisals conducted for taxation purposes — not in my 28 years,” he said. “This is a terrible bill. And I hope we vote it down.”

But Rep. Scott Beck, R-St. Johnsbury, a member of the tax writing committee that drafted the bill, urged his partymates to support the legislation.

“We need to move toward something that is more steady, more reliable, that people have more confidence in, and this is a step in that direction,” he said. “We don’t have all the answers today as we stand here. We’re going to learn a lot of things. But we need to start moving toward a system that works better than what we have now.”

H.480 involves a one-time appropriation of $50,000, Kornheiser told her colleagues. But for the most part, the changes proposed in the bill would be paid for with the money the state typically pays to municipalities to conduct reappraisals. 

The bill passed on Wednesday by voice vote and next moves to the Senate.

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