As town assessor in Manchester, Gordon Black is finishing up a two-year project of reappraising the value of every taxable property in town.
Once properties are reappraised, he then puts together the town’s grand list — which, as its name implies, is a compilation of all the properties in town, along with their estimated values.
This year, though, that task has been made harder by new software the state government is requiring cities and towns to use to record and report their grand lists for tax purposes.
The new software, developed by New Hampshire-based Axiomatic, called VTPIE, for Vermont Property Information Exchange is intended to replace the state’s old system, NEMRC, New England Municipal Resource Center.
“It’s a pretty outdated program,” Black said of the old system.
Manchester’s last full reappraisal was 18 years ago, he said. Since then, there have been a lot of ups and downs in the real estate market.
From one perspective, it would make sense to keep the grand list as up to date as possible, so taxpayers are paying on the basis of current values.
However, professional appraisers are in short supply. Also, Black said towns have an incentive not to reappraise because every year they get money from the state government per active parcel of land to fund a reappraisal. The longer a town waits to do that reappraisal, the bigger that fund gets, until there is enough money to do the job.
Reappraising Manchester is a daunting task, Black said, costing $250,000.
“Manchester’s got a pretty complicated grand list,” he said. “We’ve got significant high-end properties that are not your usual small-town property.”
Properties such as The Equinox Resort, for instance, but also a fair number of expensive homes, many of them second homes. He estimates that the town has more than 7,000 summer residents, not counting tourists, but only about 4,300 year-round residents.
That matters because the deadline for submitting the grand list to the state is different depending on how many year-round residents a town has. For towns with fewer than 5,000 year-round residents, such as Manchester, the usual deadline for submitting the list is June 4.
Because of the challenges of using the new software, the state has encouraged small towns to apply for a 30-day extension to turn in their grand lists.
Trouble arose particularly when entering the homestead exemptions — which homeowners seek to obtain a cap on taxes for their primary residences — and current use exemptions, which allow property tax breaks for farm and forest land.
Assessors have had a hard time entering all the homestead exemptions, and were only able to put in all the current use exemptions last week, Black said. Even so, listers across the state — the elected officials assigned to estimate the market value of properties — were complaining that the system was still not working.
“It’s been a struggle for every community,” said William Krajeski, president of New England Municipal Consultants, which he said puts together grand lists for about 25 Vermont towns.
The Vermont Department of Taxes needs to see grand lists this time of year for an annual study of property sales that it conducts, said Jill Remick, director of the department’s Property Valuation and Review Division. That study compares the town’s valuation of properties that have changed hands with their actual sale price. Based on that, an adjustment factor is developed to bring the town’s property tax rate in line with actual market value, which is supposed to be the basis for property tax bills.
Through that process, the state ensures that property taxes going into the state’s Education Fund are maximized. “It’s a way of making up for the fact that the grand lists are outdated by increasing the tax rate so that every town is still contributing to (the Education Fund) as close to fair market value as possible,” Remick said.
Remick cited Montpelier, where she lives, as an example of what has happened to property values. Until this year’s reappraisal, the city had not reappraised since 2010, she said. Properties were being assessed at 74% of what they were selling for.
Remick said the old software had been in place since the late 1990s, when Vermont adopted statewide education funding.
Because of how many municipalities the Department of Taxes interacts with, the new software was rolled out in phases, Remick said. Last year, it used the software in the annual study of property sales, and that was successful, she said.
This year was different.
“This year, it became clear that there is a lot more detail to the current use (and) homestead exemption components of maintaining the grand list and we were not sure that this would be ready in time, so we decided to keep the existing vendor for one more year to basically slow down the rollout of the new vendor,” Remick said.
So this year, she said, the state and the municipalities are having to work with both systems, which requires developing interfaces between the two systems.
“It has absolutely been challenging,” Remick said. “It’s all up and running now,” she added, with her staff and the private software developers rolling out patches as they work with towns.
“But it has not been easy,” she said.