On February 8, 2023

Facing a crisis, House panel considers transforming the property value reappraisal system

By Ethan Weinstein/VTDigger

With two-thirds of Vermont towns requiring property value reappraisals, the House Ways and Means Committee is considering a moratorium on them and transitioning to a state-run reappraisal system.

“This was not on my agenda coming into the session as, like, the project to take on,” Rep. Emilie Kornheiser, D-Brattleboro, the committee chair, said at a hearing on Wednesday, Feb. 1. “But it does seem like we’re in a crisis. This is the moment to fix it if we’re going to fix it.”

Appraisals are the basis for property tax bills for homes and businesses. When those values fail to reflect what’s happening in the real-estate market, towns are required to reappraise properties within their borders.

Jill Remick, director of property valuation and review in the state Department of Taxes, met Wednesday with committee members to discuss draft legislation that would transform Vermont’s property appraisal system.

If lawmakers choose to pursue Wednesday’s proposal, the state would impose a moratorium on reappraisal orders in 2023, gradually transitioning to a system in which the state, rather than towns, handled reappraisals. The switch would bring Vermont in line with most other states, Kornheiser said. 

The draft language would also set up a system of regularly scheduled reappraisals for all communities. Under current law, municipal reappraisals are triggered when a town’s common level of appraisal — a measure of how a town’s property values differ from fair market value — drops below 85% or jumps above 115%. Towns can also be ordered to reappraise if local property taxes are unfairly balanced between more and less expensive properties.

“We’re very intrigued and interested in having this conversation with you all,” Remick told the committee. “The state’s at a crossroads,” left to choose whether to work with the old system, or “take advantage of this to try something a little different.”

But with only eight field staff, Remick stressed, she and her staff do not currently have the resources to oversee town-by-town reappraisals if indeed the tax department began handling that process.

The draft language discussed Wednesday is far from finalized, and no bill has been formally introduced in the House. How frequently regular reappraisals would occur is still up in the air, as is the length of a potential reappraisal moratorium. 

But the actions laid out reflect a legislative response to previous testimony from the tax department outlining the growing backlog in reappraisals and dearth of experts capable of handling the work. 

One potential issue, raised by Rep. Scott Beck, R-St. Johnsbury, is how a state-run system would handle appeals. Under the current system, property owners have the ability to appeal property assessments locally.

Another unknown raised by lawmakers is what to do with the funding previously given to towns to make reappraisals possible. 

Under the current system, towns receive $8.50 per parcel per year to spend on an eventual reappraisal, and considering some towns haven’t reappraised for a decade, lawmakers assumed there’s a lot of money unspent. 

One question involved in a new potential system is whether the state could do away with the common level of appraisal, which annually adjusts property taxes in each town to account for market fluctuations. If the state reappraises communities on a regular enough basis, it might not need to additionally adjust property taxes annually using the CLA.

That idea in particular inspired joy from legislators. 

“Can we say goodbye to the CLA, and would we get applause when we entered any town?” Kornheiser posed. 

Beck imagined even bigger support from constituents: “Parades.”

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