When Burlington residents received their new property reappraisals in the mail this past April, many were shocked at how high their home values had climbed and immediately began worrying about sky-high property taxes.
They were met with reassurances by city officials — the city charter dictates that reappraisals have to be revenue-neutral, meaning that the overall pot of money the city takes in from property taxes can’t grow much bigger when property values go up.
Burlington Mayor Miro Weinberger told residents that their tax bills would not be rising at the same rate as their home valuations — which had not been reappraised since 2005. “We’ll work hard throughout the process to ensure that people do feel fairly treated,” he told VTDigger in April.
Now, as tax bills are being delivered across the city, some are seeing higher increases than they expected. While tax bills may not have shot up in proportion to their home value increases, some residents say their bills have swelled thousands of dollars and are questioning how this could happen in a “revenue-neutral” reappraisal system. Some say they’re worried about the long-term affordability of the city they call home.
Burlington resident Todd DeLuca said his property taxes are going up about 20%, adding thousands of dollars to his annual bill.
“I was shocked,” DeLuca said. “Not only because I was going to have to pay so much more money, but because so many of us have had a tough year financially.”
But taxes didn’t go up on every property in the city. Rather, the tax burden shifted more onto properties whose value increased.
According to City Assessor John Vickery, and a VTDigger analysis of the 2021 and 2022 property values in Burlington, more of the tax burden has shifted onto homeowners, as residential property values increased at a higher rate than for commercial properties. Single-family homeowners face an average increase of 11% in their tax bills, while the bills for commercial properties dropped 4% on average.
The redistribution of taxes in part reflects valuations affected by the Covid-19 pandemic, which forced mass business and office closures and drove home-buying through the roof, as interest rates plummeted and the housing supply became even more scarce.
Tax burden redistributed to homeowners
In VTDigger’s analysis of the city’s 2022 and 2021 property grand lists, out of about 10,600 properties appraised in the city, property taxes went up on 8,000.
VTDigger found that tax increases averaged $1,875 for properties whose bills went up. For properties whose tax bills decline, the average decrease was $2,125.
For the roughly 9,040 single-family homes in the city, property tax bills went up an average of $960. On average, the value of a single-family home went up 56%. The median value — the midpoint on the list of property values — of a single-family home rose from $236,000 in 2021 to $376,000 in 2022, a 59% jump.
For the 767 commercial properties in the city, value went up an average of about 30%, but the tax bill declined by about 4%.
Property-tax bills for single-family homes — the largest class of properties in Burlington — went up about 11%.
Commercial properties in Burlington are taxed at a higher rate than residential properties. The appraised values of commercial properties are multiplied by a rate of 1.2 — a practice that Vickery said began in the 1980s to lift more of the tax burden off residents.
While the reappraisal boosted the total value of Burlington’s taxable property from about $3.8 billion to $5.5 billion, Vickery said, the city’s total property tax collections will be about the same as in the past, because the city charter dictates that reappraisals remain revenue-neutral.
But though the total is the same, “the burden is moving toward the single-family home,” Vickery said.
“The purpose of the reappraisal is to reset the tax burden because over time, some properties have advantage, and others are subsidizing those that don’t,” Vickery said.
The reappraisal attempts to equalize the tax burden, he said. But to those whose bills rise, Vickery said, “It’s not fun.”
State law obligated Burlington to complete a citywide property reappraisal in 2019, when the project began. That’s because the city’s common level of appraisal fell below 80% of fair market value — the threshold the Vermont Department of Taxes uses to determine if a municipal reappraisal needs to be conducted.
Samantha Sheehan, spokesperson for the mayor, said in an email to VTDigger that the recent reappraisal is required by state law, to make the city’s tax system more equitable. She said property owners who believe their assessment wasn’t fair are welcome to appeal.
“The mayor has long-believed that Burlingtonians pay too much in property taxes relative to residents of other cities, and he has worked hard for a decade to keep the cumulative increase in the municipal tax rate well under the rate of inflation for that period, even while he has made dramatic new infrastructure investments and expansions in city services,” Sheehan said.
“These prudent efforts include keeping the municipal rate 3.5% below voter-authorized caps this year, and deploying $6 million of federal [American Rescue Plan] investment in the general fund to balance the FY’22 budget, instead of raising revenues through increased local fees and taxes.”
Residents cast doubt on fairness
DeLuca, whose property taxes jumped about 20%, questioned how middle-class residents will be able to afford the sudden increase in their tax bills.
“The public policy nerd in me is stunned that someone in city government thinks it’s a good idea to increase people’s taxes that much in one year,” he said.
He also questioned the criteria that Tyler Technologies, the company commissioned by the city to conduct the reappraisal, used to ensure that its work was fair.
DeLuca noticed that a neighbor’s house was appraised for less than his, yet has 2,000 more square feet. That neighbor’s home was determined to be in “average” condition, while DeLuca’s was determined to be in “very good” condition. He said he hadn’t received any explanation about why his house was labeled that way, and has questions about the subjectivity of the criteria.
Another resident, who spoke with VTDigger anonymously for the sake of financial privacy, said the property tax bill was about $7,800 last year, but will jump nearly $3,000 this year to about $10,600.
“It was certainly concerning,” they said of the increase. “Especially when you buy a home, plan and budget everything out, that kind of increase is not something that could be anticipated.”
They noticed that a large jump in value came from the land. Their house is in the New North End, where a three-quarter-acre lot carries a good amount of value. But their land is primarily an unusable cliff side leading to the intervale — a key characteristic that they think Tyler Technology missed because most of the reappraisal process took place remotely, without home visits, due to the pandemic.
They appealed their property valuation with Tyler Technologies, but received a letter a few weeks later with the same home value attached.
Vickery said that, of the 10,689 properties appraised by the city, about 2,000, or 18%, were appealed. He said the city does not yet have exact figures on how many valuations changed after the appeal, but, as more cases are heading to the city’s board of tax appeals, he estimates that 50% will change the valuations.
Vickery said Tyler Technologies used airplanes to take photos of Burlington properties, drove cars up and down every city street to map the condition of homes, and pulled permit histories, to assess when and how much work had been done on a property, which helped to inform whether a home would be designated as “fair,” “average” or “good” condition.
He said there can be mistakes when factoring a property’s valuation, which is why there’s an appeals process. The deadline to appeal a property valuation for this fiscal year is closed, but he said homeowners have the opportunity to appeal next year.
For those worried about being able to pay their property taxes, Vickery pointed to the state’s income-eligible property tax credit program, which he said 70% of homeowners qualify for. If homeowners make under $138,500 a year and their home qualifies as their primary residence, they may be eligible for a property tax credit.
Vickery said he thought the reappraisal process was “as fair as it gets.” He said the assessor’s office has been double-checking Tyler Technology’s work and the state also audits a reappraisal after its completion, to ensure that it was conducted fairly.
“I’m confident that, overall,” Vickery said, “we meet measures of fairness and equity.”
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