While V.I. Superior Court Judge Curtis Gomez recently lifted the decade long injunction keeping property tax rates at 1998 levels, the V.I. Unity Day Group will face the government in its own court case on February 7 over what it alleges are unfair property reassessments.
The Virgin Islands property tax quagmire began in 2000 when a group of property owners sued the V.I. Government over its unfair property tax system.
Following three years of government inaction, the court ruled in favor of the property owners and ordered an injunction, freezing property tax rates at 1998 levels, which was the last time properties were assessed fairly according to the court.
The 2003 ruling also ordered the government to reassess all properties across the territory and reinvigorate the Board of Tax Review. The government contracted Bearing Point to reassess properties throughout the Virgin Islands, which it completed in 2006, and set to work revamping the Board of Tax Review.
In lifting the injunction, the court ruled that the Board of Tax Review, which must hear cases within 120 days, is now functioning properly. The government and a group of property owners listed in the court case signed a settlement agreement on January 7 after successful mediation.
That settlement agreement stipulated that the government must still use the 1998 levels for issuing bills for the 2007, 2008 and 2009 tax years. The government will issue 2007 tax bills, at the 1998 level, in February. The 2008 bills, also at the 1998 rate, will be issued this summer.
The 2009, the last bills which will reflect the 1998 rates, and 2010 bills, which will reflect the newly assessed rates, will both be sent out in 2012. That is, however, what the V.I. Unity Day Group is fighting.
The V.I. Unity Day Group, on behalf of all St. John property owners, filed a separate lawsuit against the government in the wake of numerous property owners filing appeals alleging their properties were inaccurately assessed by Bearing Point.
Unity Day group members walked out of the January 7 mediation and now await their day in court, set for Monday, February 7, at 9 a.m. in U.S. District Court.
Of the 1,700 properties assessed by Bearing Point on St. John, 700 property owners filed informal appeals alleging inaccuracies in their reassessments, according to Pam Gaffin, a member of the V.I. Unity Day Group’s property tax committee.
“If you look at Bearing Point’s assessment values on St. John, they don’t match close enough with the 2006 sales to be considered valid assessments,” said Gaffin. “Out of 1,700 houses, there were 700 informal appeals filed on St. John saying something was wrong with their assessments. Once the Unity Day Group heard it was such a huge problem, we started to join forces and filed the lawsuit.”
There are likely even more property owners with erroneous assessments, but because their properties were undervalued, did not speak up, Gaffin added.
Unity Day Group members walked out of mediation because the government refused to listen to their point, explained Gaffin.
“Unity Day Group left mediation because the government would not deal with the fact that the data itself is bad and Bearing Point’s ways and methods did not work,” Gaffin said. “We want to say that what Bearing Point did on St. John was incorrect. The results did not meet standards and we need to start from scratch.”
The problem with assessing property on St. John arises because of the proximity of $300,000 homes and $13 million properties, explained Gaffin.
“Basically the problem is that we have $300,000 houses and $13 million houses and not enough of either kind for them to be in separate neighborhoods,” she said. “Other places have houses that are similar and you could lump those together. If you had enough $300,000 houses all in the same area, it would work, but that is not the case here.”
Bearing Point also used vague descriptions to categorize views and houses, Gaffin added.
“There are properties with water views and they are listed with ‘good view’ but my valley view is listed as ‘very good,’” said Gaffin. “That has nothing to do with anything real. We also have property that was sold for $8 million and is listed as a ‘Caribbean cottage’ rather than a luxury mansion.”
“Also, the market has gone way down since then,” she said.
Gaffin urged all St. John residents to attend the hearing on February 7 in U.S. District Court.
“Everybody should go to the hearing,” she said. “The government’s position is that this is just about St. John taxpayers who don’t want to pay their bills. They think we are spoiled brats complaining that our bills are too high.”
“They do not understand that this is everyone on St. John backing this,” Gaffin said. “It’s not about not wanting to pay taxes, but wanting to pay a fair tax for what our properties are really worth.”
The Unity Day Group is fearful that its case will be thrown out on a technicality before February 7, Gaffin added.
“The judge is going to want to throw this out because of a technicality,” she said. “But with everyone being there, the judge will see that we want this to be heard on its merits and not just thrown out and ignored.”
The group is still collecting funds to cover legal fees for Attorney James Derr, who is representing the group. Residents are asked to contribute $100, or what they can afford. Checks made out to VI Unity Day Group, memo property tax fund, can be dropped off at E&C Gas or with Lorelei Monsanto at Chateau Bordeaux.