Borough defends tax assessments after appeals

 

August 3, 2023

More than 200 people have appealed the borough’s new property assessments after some tax bills were hiked by hundreds of dollars under a new computer-assisted mass appraisal system that the borough says is more objective and equitable.

The 221 appeals are the most since 2013, when more than 400 were submitted.

The new assessments have led to a flurry of online commenting by people trying to understand why the new assessments valued their property sometimes at hundreds of thousands of dollars higher than their previous assessments.

It’s also led to talks of organizing some form of mass appeal. Last week, Haines resident Paul Rogers bought a large advertisement in the CVN asking property owners to contact him to talk about ways to challenge the new assessment system “which appears to have gone off the rails.”

“There’s a pretty strong feeling in the community that this is out of control, and there’s something wrong with the process they’re using right now,” said Rogers in a phone interview.

Rogers’ appeal, on behalf of the assessment of his daughter and son-in-law’s Mosquito Lake property where he lives, was heard by the Board of Equalization recently. Borough records show the property’s total assessment jumping from around $188,000 in 2021 to $495,000 in 2022 to $864,000 in 2023. In other words, the value has more than quadrupled in those years. Rogers acknowledged it was partially a result of a delayed assessment of a new house and barn built on the property in 2016.


The borough reduced its most recent assessment of $1.1 million down to an earlier $818,000 assessment after Rogers’ appeal. He hired a real estate appraiser to back up his position, but it failed to sway members of the board, which is made up of assembly members.


Borough officials say the changes in property assessments are in fact the result of more accurate and equitable assessments, since assessors enter property characteristics into a computer program that computes the value based on home sales.

“You’re moving away from individual judgements on individual houses” said borough manager Annette Kreitzer. “You’re using a methodology that is applied to every property, every house, in the very same way.”

She says many properties were undervalued in the borough because of old assessments with criteria that were applied unevenly by individual assessors.

“If your property has been the same the last 10 years, I’m sure you’re surprised it’s gone up this year. I don’t blame people for that,” said Kreitzer. She pointed out four out of five tax burdens changed by less than $100.

Joe Caissie, the state assessor for Alaska, agreed. In an email, he said computer-assisted mass appraisal systems are more accurate in most cases. He said it is “not uncommon” for property owners to realize their past assessments were too low.

Rogers said about 15 people reached out to him about some form of organized challenge to the borough’s assessment, but said he didn’t think his high assessment was an outlier.

“This works well in suburban neighborhoods, it doesn’t work well in rural areas where houses are often home-built,” he said.

Caissie, the state assessor, said the criticism is usually misguided. “This is a claim I hear a lot in the state, but it’s not a real issue,” he said. He gave an example of a property owner who builds their own improvement using $50,000 of materials and $250,000 of their own labor, and who says the property value should only increase by $50,000. Assessments are designed to take into account the full value of the property if it is sold on an open market, and he said data from Haines’ assessments show that “there’s no systematic over-assessment in Haines,” at least as of 2022.

The Haines Board of Equalization hasn’t ruled in favor of appellants in at least the last couple years. Equalization board members have emphasized the risk that if the board were to grant appeals based on real estate appraisers’ numbers, it would lead to a flurry of appeals.

Caissie said the rarity of boards of equalization granting appeals is normal around the state. He pointed out that many disputes or errors are resolved before they reach the board of equalization, something the borough is currently doing. And, he pointed out that while property owners have a big incentive to fight undervalued properties, local assessors don’t have direct financial interest in overvaluing. That means that generally, their numbers are based on verifiable data about what is on the property, which is computed by a formula.

Rogers insisted this isn’t the case for his property, and vowed to continue to fight the borough. He said the Board of Equalization is meeting yet again to review his property assessment in mid-August to reconsider its decision. Meanwhile, he said he’s heard from others who have decided the fight isn’t worth it, and have withdrawn their appeals.

“That’s unfortunate, because it denies people their due process.” he said.

Correction: This story previously misstated the year when there were more than 400 appeals. It was 2013, not 2011.

 
 

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