Stratton ends tax dispute
Toolbox
By PATRICK McARDLE STAFF WRITER - Published: October 5, 2009
STRATTON — A property tax dispute between this ski resort town and the state has been resolved with Stratton agreeing to follow the ruling set down by the state and pay what is likely to be about $13 million in property taxes for school funding, but both sides agree that the issue may lead to changes in the law.
In early September, William Johnson, director of the Vermont Department of Taxes' division of property valuation and review, sent a letter to Stratton certifying that the town had undergone a reappraisal.
Stratton Town Clerk Kent Young said Thursday that after two meetings, both of which included discussion on the matter, the Stratton selectboard has decided to accept the state's decision. As a result, tax bills have been sent to residents with the first payment due on Oct. 20.
Stratton's dispute with the state began over what Young described as a crisis brought about by what Stratton's listers saw as conflicting rules from the state.
The national economic downturn has affected property values in much of the state, but Young said ski resort towns such as Stratton have been hit especially hard because the value of condominiums have dropped faster than other properties.
In a town such as Stratton, where about 90 percent of the homes belong to out-of-state residents, most of the properties were dropping sharply in value.
Young said Vermont law does not allow a property to be evaluated for more than its true value, but the town did not have the time or resources to schedule a town-wide reappraisal.
The problem was greater in Stratton because the Board of Listers had been notified that a lawyer, who had spoken with many of the owners of Stratton homes, planned to file as many as 750 grievances in a town with about 1,400 properties.
Young said Rep. Richard Hube, R-South Londonderry, whose jurisdiction includes Stratton, arranged a conversation between Stratton's listers and the Vermont Department of Taxes. The state provided little help for the town, according to Young.
Stratton officials were concerned because of a recent experience with a medical clinic in town. After the state declared the clinic was a taxable property, lawyers for the clinic appealed the decision and eventually won. But it was the town of Stratton and not the state that had to refund the money.
The Board of Listers ultimately decided to use Vermont statutes that allow property values to be changed by either appeals or a selectboard-approved, errors-and-omissions property to change the value of most of the homes in Stratton.
Young said that while the listers ultimately received only about 350 appeals, they changed the values of similar properties throughout the town so that property owners who filed appeals wouldn't have an unfair advantage over those who didn't.
In his letter, Johnson said the listers had changed the value of about 95 percent of the town's properties, which reduced Stratton's grand list by about 17 percent.
The conflict between the town and the state came from the state's insistence that what Stratton had done constituted a town-wide reappraisal that would allow the state to change the common level of appraisal. Stratton's listers maintained they had followed the state's rules to change property values and, by the state's rules, had not conducted a reappraisal.
Young said the Select Board had discussed whether they should accept the state's decision at their meeting on Monday and decided "there were a couple of things the state could do that could make things worse."
The common level of appraisal, a measure of the difference between the value of a property, according to its municipality, compared to the actual selling prices of the property or similar properties in Stratton has been set at about 83 percent.
If the state had not declared a reappraisal, Young said, the town's common level of appraisal would have been close to 100 percent and Stratton would have sent about $2 million to $2.5 million less in school funding taxes than it has in recent years.
Young said he had spoken to representatives of other ski resort towns who had followed the situation in Stratton and wanted Stratton to join them in "challenging" the state's tax policies.
Johnson said the common level of appraisal mechanism has "never worked perfectly." He said he believed his department would welcome any efforts by municipalities or the Legislature to improve the process.
patrick.mcardle@rutlandherald.com
42