MINUTES OF THE VALA DIRECTORS MEETING
March 2, 2011
The meeting was called to order at approximately 9:00 a.m. by President John Fike. A list of attendees follows the minutes.
The Secretary’s report was approved on a motion by Pauline Moore. The motion was seconded and passed.
The Treasurer’s report was accepted on a motion by Lisa Truchon. The motion was seconded and passed and reads as follows:
|Refreshments||18.96||Total Expenses||$ 18.96||Balance 02/28/2011 General Fund||4,161.68||Balance 02/28/2011 Education Fund||1,000.00||Balance in checking 10/31/2010||$5,161.68||YTD Memberships received 124 plus 4 for next 4 years prepaid|
Most of the President’s comments had to do with new legislation. There are 421 new bills before the legislature and that is just the first part of the biennium. H.67 has to do with recreation trails—VAST is back again. Wording has been changed a bit but will still want to exclude trails from assessment. H.69—talks about creating a study committee to identify and examine issues regarding the taxation of real property that includes a renewable energy plant.
H.73 is transparency bill, that proposes to establish a government transparency office to administer the requirements of the public records act.—Steve will make or has made amendments to the bill
H.10—Town treasurers to send all education tax bills to Montpelier so they can send them back to the individual tax payer and they will collect the money directly. State doesn’t have the manpower or the software to accommodate this and it will mean that the school districts will be getting their money late so that they will have to borrow money—can’t be done any cheaper than it is done now.
H.136—taxation of travel trailers
H.175—tax exempt properties; any questions regarding eligibility would go to Bill Johnson for clarification
H.286 – exemption for newly constructed houses—still in Ways & Means Committee
S.19—Vets exemption going to $40,000. Towns would no longer have to pick up the diff between the 10K and the 40K.
List from the state of rebates ok to give out—public information
Steve covered a number of subjects which included the Veteran’s Exemption, going from $10,000 to $40,000. This would really be no benefit to the Veterans because their tax bill is figured on income, not their property value—unless they make over $90,000 annually. Therefore, the rest of the taxpayers get to pay for an exemption that really does nothing to benefit the Veterans.
A bill introduced by the Representative from Mt Holly would allow towns to vote to replace elected Listers with appraisers. This would not be law state wide but it would be a local option because some towns can’t always get people to serve as Listers.
An area that Ways & Means is looking into and is interesting in pursuing is having the Tax Department take over the whole state education property tax issue—the administration including appraisals as well as billing and collection of taxes. This was in a
Ways & Means subcommittee but no action will be taken this year. There is a Tax Department study of the issue that will come out June 15, 2011 to talk about how this might work. Ways & Means may put into the Miscellaneous Tax Bill, a study committee which would include treasurers and possibly VALA to come back to the legislature in January, 2012 with recommendations how to implement the study if there is something to implement. If the State took it over, it could be county or regional assessment…taking it out of the town level. If county assessment were chosen, the Maryland model of county assessment would certainly be considered.
Ways & Means is also looking at eliminating or at least revamping the income sensitivity program and go back to an adjusted tax rate based on income. This would mean more dependence on value of homestead so as to prevent possible manipulation of tax bills, etc.
They are looking at ways of adjusting tax bills so the CLA doesn’t apply to tax rate but its an adjustment after value, times the tax rate, supposedly making it less complicated– a way to do same math but in a difference sequence. However, they are aware if the CLA is applied directly to the homestead value, it could trigger a reappraisal each year. There is concern that one CLA is used for the whole town, residential and commercial but given the small data base, they couldn’t come up with any way to do it differently
The main emphasis is on budget and health care this year.
Mr. Shumlin has said that the deficit is $176 million. Some ways he is proposing to decrease the deficit include taking $23 million out of education funding; doing away with Catamount Health which has a large amount of state subsidy; whacking physicians & hospitals & dentists for Medicaid reimbursement rate, and increasing health insurance surcharge on premiums. 42% of state expenditures are in human services and 22% are in education expenses. So the thought is to do away with exemptions and lower the rates. Vermont has one of the highest sales tax rates because it is focused on one of the narrowest bases. The income tax could be lowered but then mortgage interest and property taxes couldn’t be used as deductions.
Both house and senate have different shortfall amounts. The joint fiscal web site shows a spread sheet on how the shortfall is calculated.
The 2011 education program will be coming out soon on the website. The curriculum is similar to the last couple of years,
i.e. IAAO 101 is scheduled for this spring and another IAAO class in the fall. Hopefully there will be information on the progress of Lister Certification at the time of the VALA annual meeting.
Current Use…..a bill is out there will see where that goes.
The Tax Department hasn’t been overly enthusiastic about taking on appraisal, billing and collection of taxes, but it will probably happen eventually. The idea will not go away. There have been many changes within the department …downsizing, a new computer system, changes by the legislature every year, such as billing and collecting of taxes. Next year there may be a revamping of income sensitivity and the department has just so many people to shuffle around to cover all the changes.
Bill has written up a hydro study as a result of meeting w/ utilities and Trans Canada which will get it out to everyone fairly soon.
Exemptions: Representative Olsen has written a bill to give towns the ability to exempt a property with PV&R approval.
There are some parts of the state where the towns and state do not agree on tax exempt status of certain properties, and the outcome of the ensuing court cases will determine the future course of action as well as the role of the towns and the state in the process. Even if the State certifies that a property is not tax exempt, they will not bear the cost of proving it. The onus is on the towns even though 2/3 of taxes are education taxes. Some feel that if state gets involved in this issue, then there should be some responsibility on part of the State to share cost, but Bill stated that if that happens, then we are about two-thirds of the way to a state assessment system.
Tom said at the VALA annual meeting a consensus of the group felt that VALA should get involved in writing a law where the state and town take co-ownership of the cost of appeals going to the courts. He will work to see about getting a bill to the Ways & Means Committee. There is considerable cost for the legal defense of appeals that are on-going for 2-3 years. The property owner wins, get their taxes reduced, the town eats all taxes both municipal and education. It is important for the Legislature to have a debate on appraisal of property, billing, and collection of taxes—what it will cost and other factors such as appeals, delinquencies, etc..
Steve Jeffrey stated that the State is getting the work done much more cheaply at the local level as a lot of work is volunteer or for very low pay. State doesn’t appreciate how much work is done on the local level. Steve has been concerned that Listers are being taken advantage of in the administration of a $1.3 billion tax structure which couldn’t be replicated on state level because it’s too expensive. John commented that as the job gets more time consuming, it is getting more difficult for towns to get Listers, so they have to hire appraisers to do the work. The old idea of having part time Listers is no longer possible and this limits who can be a Lister. There are increasingly more bills creeping toward the eventual State take over of the process. The bill in the Legislature last year requiring Listers to check for multiple housing units is an example of how little the state appreciates what the Listers do.
The new PTTR is up and running with a little legal revolt among lawyers…they have to complete transfers completely…..don’t like that, they can’t proceed unless they fill in all of the blanks. It is working well for majority of transfers. Money is coming in so cash flow is better.
Homestead Declarations– Penalty changes…from 1% to either 3% or 8%. The Listers need to check the download from the State and notify them if there are any changes in the homestead declarations from last year. If the property owner does not rescind the homestead declaration and if it is to a tax payer’s benefit not to file one way or the other, the penalty will be 8%. If it is an inadvertent error in filing, then the penalty is 3%. Tom commented that this increase creates a large personal relations issue and he would rather see the state get the 3% penalty and the state could deal with the complaints.
Hydro dams: For many years, the State has made recommendations to local communities on the valuations on various utilities which were based on the income approach, and the State worked with utilities to come up with value. This worked well for a number of years. When the price of electricity went up to eight cents per kwh, and only one year was used as a basis for value, everyone was happy because value was up and revenue increased. But last year everything changed, the wholesale price of electricity went from eight cents to four cents per kwh.…and by using the same methodology as in the previous years, towns were seeing utility valuations cut by half. And there was concern. Forty some municipalities were affected. Realistically, values didn’t drop by half in one year and using only one year for value was a short sighted way of looking at valuation. Then came theTransCanada appraisals, which caused concern in some municipalities of the effect that on could have on grand lists. As a result of the drop in hydro values, the Legislature said a floor would be put on hydros for two years– FY 2011-12. The hydros couldn’t go down in value, but could go up if there is a defensible basis. The Legislature said that PV&R needs to have a meeting with interested parties—VALA and utilities – to come up with a new way of doing this, that relies on a longer term measure of evaluating wholesale electricity. The same methodology would be used up to a ten-year average for wholesale value of electricity. TransCanada’s valuation will remain, especially considering the cost of $200,000 to value them. There is concern that, as with the one year plan, the 10 year plan may not work at some point, down the road….but there is no such thing as a perfect system. Towns have to weigh the recommendations given by state.
One good thing about going to the 10 year average, it will bring predictability in value and spikes won’t be enough to change the 10 year average. The municipalities came to the state for assistance in how to deal with the drop in wholesale power….this is what state came up with.
Doug Lay has set values on all distribution lines and small hydro projects and his values are used in the CLA.
Education: John Vickery—TOEC’s: There are about 30 workshops being offered, 10 of which are related to Listers’ issues, either directly or indirectly. The fee will include one meal. Workshops that might be of particular interest to Listers are:
1.]GPS: A Tool For Municipal Officers And Town Volunteers—Presenter: Leslie Pelch & Regional Planning Commission Staff
2.]Finding New Data For Your Community—Presenter: William Sawyer, UVM Center for Rural Studies
1.] Making Sense Of The Equalization Study—Presenters: 2 District Advisors
2.] Using Telecommunications Technology To Improve Municipal Services—Presenters: Regional Planning Comm. & Vt Telecom Authority
VT CAMA Sales and Statistics—Presenters: Todd LeBlanc, Ed Clodfelter & Chris Miele
Open Forum for Listers—perhaps a panel
1.]Valuation of Development Property—Presenters: Todd LeBlanc & John Vickery–VALA
2.]Local Officials In Emergency—What Should I Know And Do & When Should I Do It—Presenters: Vt Emergency Mgmt
Using NEMRC To Improve Your Grand List—Presenter: District Advisors
It had been said previously that perhaps some workshops would be repeated during the day, but at this conference there are no repeats for Lister workshops.
Current Use bill H.237 is very similar to H.485 which was passed by both Houses and vetoed by the Governor last year. This bill is In Ways & Means Committee, presented by Rep. Clarkson, the sponsor of the bill. During testimony, Darby Bradley of the Land Trust compared two bills & John Meyer of the Current Use Tax Coalition talked about the committee that has been meeting since last summer; the group was extremely diverse last year, were against any changes to the program but the group has really come together this year.
The Coalition proposed property transfer tax increase that will be included in the Miscellaneous Tax Bill. If a portion of a Current Use parcel is developed, there will be a penalty of 10% of fair market if removed. There were those in the committee who felt if a portion was pulled out of the program but not developed, then the value should be prorated –not valued as a stand alone parcel. But when the committee was shown the savings to the state each year, and with the goal of keeping the program viable, they were willing to drop their objection to the proration of a portion withdrawn from the program. They offered a compromise that if a parcel were pulled but not developed then the penalty for development would be 10% for 0 to 12 years; 5% penalty for 13-20 years, and 3% penalty for over 20 years. A parcel in current use that is subdivided with permits, etc. will no longer be eligible to stay in the program and will be assessed at fair market value. This will prevent developers from “parking” land in the Current Use Program as a tax shelter. The Coalition understands this issue. If this type of land in the program is sold, the penalty starts over with the new owner. An unpaid penalty will become a lien on the property and goes with the land. Much more discussion followed.
John Fike encouraged everyone to go on line, read the bills and if there is anything there that stands out, to call Randy and Tom and let them know anything that might help them when they give testimony. The Legislators need feedback from their constituents.
Randy Viens made a motion that VALA support the Coalition’s recommendations and their amendments on H.237. The motion was seconded and passed on a vote of 14-3.
Tom Vickery reported that they will probably be called to testify before Ways & Means on H.110 which Proposes To Give The Dept Of Taxes Administrative Responsibility For The Statewide Education Property Tax. The Town Clerks & Treasurers Association has recommended that nothing be done until a study committee states their findings. This bill will cost the towns money. There would be a dual system, with the State billing and collecting education taxes. Issues of how things like name changes, delinquent taxes, appeals etc. need to be addressed. This bill could also affect the timing of education payments sent to the towns which would mean that towns would have to borrow money until the state payments are received. Tom suggested that VALA follow the recommendation made by The Town Clerks And Treasurers Association that the Legislature take no action on this bill until the study committee has had time to look at it.
Ed Clodfelter: New and improved Residential property cards.
Penny Allyn—Newsletter/Website: Penny needs information for the newsletter which will be going out in two weeks.
About 100 websites have been researched with attention paid to ease of navigation, content, etc.
The new website will include the following:
Membership application with a link to a PDF file which can be printed (instructions included)
Latest news and announcements, i.e. what’s new in VALA
President’s page with a picture and bio of the current president and a welcome message
County Directors’ page arranged alphabetically by county with a picture and bio of each director and alternate with contact info
Committees: photos and bios of each; statement of purpose, minutes of the meetings and contact info for committee members
Minutes of VALAmeetings—the secretary will be able to type minutes directly into the website.
Treasurer’s report—The treasurer will be able to type the report directly onto the website.
Dates, time, and location of meetings
Lister Of The Year with photo and bio
Education opportunities, scholarship information
Until Penny is comfortable using the new website, the old one will remain up and running with a link to the new website.
There will be cross training so that anyone who wishes to contribute to the website will be able to do so.
There was much discussion as to the cost of maintaining the website. It was strongly suggested that Penny document the time she spends even if no money is spent, because at some point, VALA may need to pay someone to do the work she is currently doing.
It is necessary to know what we will be spending on the set up, design, and management in order to know what we should be charging for dues in order to cover costs.
NEMRC–Chris Miele: Grand list seminars: Locations are Rutland, Fairlee and Burlington. Topics include: Printing to pdf files, the one time homestead download, new reappraisal set up, and new penalties for late filing
Chris recommended registering on line.
The CAMA punch list is pretty much completed—other suggestions for improvements will be scheduled for the next round of enhancements
Residential property card with one, two and three pages have been modified and the 3 page card is the default record card. The issue of bringing change of appraisal comments over to the CAMA side is still being investigated.
Webinars –2 in February –reconciling the grand list and reconciling taxes. Both were recorded in audio and video so that if anyone was not able to participate in those, they can go to the new NEMRC digital library, and download the webinars for $10.00 for a forty eight hour period.
Records Retention: nothing to report at this time
Tom Vickery—as a result of appeals he has had, he would be interested in putting together a seminar for VALA to give Listers insight into the appeals process as well as understanding how to read the equalization study, and see how towns are being treated.
He will bring a proposal to next meeting….it could be presented at a separate time, perhaps at VTC or at the Annual Meeting where more people would be present.
A fee would be charged to raise money for VALA to hire a statistician who could answer questions about the equalization study with the result that recommendations would be made to PV&R to make corrections to the study itself.
John V suggested that Listers need to be taught how to review their reports electronically so as to compare with how the state comes up with their figures.
Louise commented that Listers need to review their sales study because something could have changed since the computerization of the sales study.
John V commented that this would be a good workshop because towns do not realize the impact of how just a couple of percentage points in the equalization study affects what people pay in taxes.
The meeting adjourned at approximately 12:15 p.m.
Carol Hammond, Secretary
|Mary Jane Potter||Vt Municipal Assessor|