The Tax Man
Government does important stuff: educate our kids, keep communities safe, plow the roads, &c. I don't smile when the tax man comes to collect my share of the costs any more than the next person, but it is essential.
So when the government takes money, it needs transparent, fair processes to do it. If you live in Juneau, Haines, or Skagway, you’re paying property taxes to your local government. It's simple in concept: figure out what every property is worth and apply the same tax rate to all.
Figuring out how much each lot and house and warehouse is worth takes fair assessments run by qualified people. That’s almost always what happens in our state. But when there are issues, it's worth taking a second look. I plan to introduce a bill in the next week or so to make some important fixes brought to light by some recent cases where things have gone awry.
Many Alaska municipalities already follow all the best practices I'm drafting into a bill. For them, nothing would change. But for others, a few additional guardrails are in order.
For starters, we need to make sure the people assessing our properties' value are well-trained. The Alaska Association of Assessing Officers (AAAO) has a certification program that's optional today. I'm looking at requiring all assessors to get certified or be supervised by someone who is.
The second change I'm chewing on keeps government from getting two bites at the apple. Our local governments set the assessed value of a property each year and mail us a notice. If we disagree, we go talk to them. If we can't reach accord, the property owner has the right to appeal. Some local governments reserve the right to raise your value during that appeal. Usually that's done in good faith, because the government took a closer look and learned about a bigger deck or new mother-in-law apartment. But it can also come across as threatening; a way to scare citizens off from appealing.
Fairness shouldn't come down to the tax office's bedside manner. My bill will prevent the government from pursuing a higher value during an appeal than the initial assessment. If the city learns about a new valuable thing on a property, they'll need to put it into the next year's assessment.
And sometimes Alaskans get concerned there's a bigger issue going on than just their home or business. To make sure they can address it, I'm planning to switch the default on who hears property value appeals. See, right now, state law says your local elected officials do it unless they've named a separate Board of Equalization. When an assembly or council hears appeals, they sit as quasi-judges. That protects fairness in the appeal, but it also means they can’t talk freely with all their constituents about the assessment process. You shouldn't lose a chunk of your rights as a citizen when you appeal against your property value. A separate board fixes that.
The fourth change is about the need to get the property values right. That goes without saying, but doing it is harder then it sounds. Today, communities don’t need to adopt official standards for assessment. I'm working on requiring communities to adopt a set so everyone knows the rules. Alaska really is different than most property markets in the U.S. (not everyone has building codes, for example.) So I plan to maintain local control by letting local governments adopt modifications to the standards or choose a different set that might fit a little better.
I’m also proposing a requirement for the Board of Equalization to make findings on the record if they disagree with a fee appraisal. That sounds boring and technical, but it's key. Mass assessments estimate all of our property values without needing a full battalion of city real estate professionals on payroll. A fee appraisal is different. It's what most of us get when we take out a mortgage on a house: a much more detailed, look at a specific property that also includes information on actual sale prices for comparable properties. They're excellent indicators of market value. Most tax assessors rely heavily on them when citizens bring one in. Most also use them to adjust their mass assessment models to better reflect the market.
Of course, nothing is infallible. So if a Board of Equalization decides the assessed value is significantly different from the one in a fee appraisal, it can. But my bill will require them to explain just what evidence or considerations sent them in a different direction.
I’m working with the legislature's lawyers on the exact language of this bill. Tax law is delicate stuff. While they wordsmith, I’d love your feedback on these ideas. The idea is a fair process for property owners without raising local government's costs through the roof. What do you think?
