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V.I. Property Tax Reform System OKd by Court Expert

April 9, 2008 — After a four-year effort, the V.I. government has finally met court mandates to put in place a comprehensive property tax reform and assessment system, according to the special master appointed by the judiciary to oversee the process.
In late March, Joseph Hunt sent a favorable report to U.S. District Court Judge Curtis Gomez, saying that the government "is in compliance with the court's directive to put in place an assessment system and procedures that are proper and capable of producing credible and reliable assessments as required by law."
In 2000, a group of commercial property owners took the government to court, alleging that the government was assessing commercial properties based on replacement rather than actual property value — a method, they said, that resulted in inflated assessments. U.S. District Court Judge Thomas Moore agreed, and in 2003 ordered the government to conduct a thorough revaluation of commercial and residential properties. Meanwhile, property tax rates remained at the 1998 levels until the project was complete and a new assessment system was put in place.
In his report, Hunt said the new valuations — conducted over the past four years by Virginia-based Bearing Point Inc. — are complete, conform to "mass appraisal standards," and are considered to be "within acceptable levels of accuracy."
The ability of local homeowners to appeal new residential values has been "properly advertised," Hunt added.
"With the exception of St. John, the actual number of assessment appeals was at, or below, an expected norm for assessment revaluations," Hunt wrote. "St. John's property increases ran sharply higher than other locations, and can account for the higher number of appeals in that location. Bearing Point carefully tracked the reason for the appeals… [T]his review often resulted in adjustments to entire neighborhoods or individual properties."
Valuations for condominiums and time-share models, along with tracts of land larger than two acres, are also considered complete, Hunt added. He said that in order to keep up with constant changes in the real estate market, however, the government must maintain " a professional staff and the reliable market data" necessary to conduct future revaluations.
"If this is not done, the taxable base will quickly regress and the efforts over the past four years will be for not," Hunt said, adding that a functional Tax Review Board should be put in place to ensure that "fairness and uniformity" play an integral role in appraisal process.
Through the report, Hunt has effectively certified the property revaluation process, according to Tax Assessor Roy L. Martin. Martin said Wednesday that he hopes the court, in a hearing scheduled for May 16, will now proceed to lift the injunction that put a freeze on property tax rates. Once the injunction is lifted, the government will be able to implement a new multi-rate tax structure signed into law last month by Gov. John deJongh Jr., Martin said. (See "Governor Uses Line-Item Vetoes to Modify Property Tax Bill.")
Meanwhile, the government has filed a motion to get the injunction lifted prior to next month's hearing.
Also on the court's desk is a suit filed earlier this month by the St. John Unity Day Group, asking the government to start the revaluation process over again and hold off on assessing or collecting taxes until the issue of high property assessments on St. John is resolved. (See "St. John Group Files Suit Over Property-Tax Revaluation.")
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