Part Two: The story of how Alaska’s property tax assessment process has failed the Haines community
By BRENDA JOSEPHSON
The first part of this story was published in Haines, we have a problem. Details were provided on the implementation of the first phase of a new mass appraisal methodology for Haines Borough’s 2023 property tax assessments.
In the name of “uniformity and equity,” an exotic hybrid valuation model of replacement costs with some market data that ignores actual market sales conditions, resulting in inflated assessment values in excess of full and true value.
What happened in Haines was a perfect storm of process failures combined with unjust actions from government officials. While these issues have come to light at a local level, the catalyst was due to a failure of Alaska’s municipal taxation statutes to protect individuals’ rights and the public interest from bad actors on a local level.
Haines municipal elections last month brought forth considerable change in leadership. Haines now has a new mayor and half of the assembly seats are now held by newcomers who were sworn in on Oct. 24.
The new assembly’s first action was to schedule a property tax workshop to research what went wrong with the 2023 assessments. Their second action was to introduce an ordinance in a special meeting to delay penalty and interest on property tax payments for two months.
The public was encouraged by the responsiveness of the new assembly. Mayor Tom Morphet even listed the assessment issues as top priorities in his Mayor’s Corner blog.
However, hope of any real change appeared fleeting during the property tax workshop. Assembly Member Debra Schnabel called for delaying corrective action and instead hiring an outside company to “audit” the fiasco that has caused so much public distrust of their government.
If the insult of spending taxpayer funds to delay action was not enough Haines Borough fiscal officer, Jila Stuart stated at the end of the meeting that the new methodology in 2023 created winners and losers and those that are upset and speaking out are just the losers. Her words are memorialized 2 hours and 46 minutes (2:46) into the audio recording of the assessment tax workshop.
The issues that plagued the 2023 property assessments started with the implementation of a systematic reevaluation not authorized by a public act of the assembly. The exotic cost-based hybrid valuation model was implemented under the guidance of contract assessor Michael Dahle. But the true injustices came to light during the appeal process. Instead of receiving serious inquiries and site visits in response to their appeals many appellants received intimidating emails that indicated that if they pursued their appeal their assessment would be increased even further.
Alaska’s property tax assessment process has been set up to protect the municipality’s interest not the residents. Even the State Assessor’s mission statement identifies his mandate is “to advise and assist municipalities on assessment and tax issues”. There is no advocate to protect the rights of citizens from the heavy hand of their local government.
Alaska’s property tax assessment process fails to protect individual rights due to the following:
- Board of Equalization – When the elected officials are siting as the Board of Equalization, ex parte communication restrictions prevent the citizens from contacting their assembly members while they are an appellant in advance of the BOE hearings. If process errors or unjust actions from bad actors are occurring an appellant is thereby denied their first amendment right to redress their grievances with their representatives. Statute does not protect citizens by establishing a pool of unelected members to serve as BOE members.
- BOE Hearing – Statue establishes that appellants bear the burden of proof but fails to protect due process to guarantee appellants their right to a fair hearing. Alaska Statutes have no provisions to require:
- Sufficient notice of appellants’ hearing date for continuation hearings.
- Assessor’s office staff reports to be provided with sufficient time for an appellant to prepare for the hearing.
- The ability to reject a BOE panel member which is a normal part of the selection of jurors.
- Assessment to be based on recognized uniform standards of appraisals.
- Protection for public from punitive actions of an assessor with threats to increase assessments if appeals are not withdrawn.
- Licensing – Alaska does not protect the public’s interest by requiring licensing for assessors. Licensing would provide a pathway to assure the public that the assessor has met eligibility requirements, maintains proficiency through required continuing education, and provide a process for reporting violations of standards to the licensing board.
- Full and True Value – By statute property assessments are required to be at full and true value. However, statute fails to specify that an appeal must be treated as a single-property appraisal. Clarification of the intent of this statue must make it clear that the mass appraisal method shall fade into the background when valuation is contested by a property owner.
- Assessment Notice – Statute stating “sufficient notice is given if mailed by first class mail 30 days before the equalization hearings” fails to consider that receipt of notices mailed from out of state can be significantly delayed for Alaska’s rural communities.
Each one of the failings listed above played a part in the failure of the 2023 property tax assessment process in Haines. This failure has created a loss of trust, respect, and goodwill of the people toward their government.
The assessment fiasco started with the implementation of a new mass appraisal cost-based hybrid valuation model implemented under the guidance of contract assessor Michael Dahle. Dahle was hired by Haines Borough Manager Kreitzer without holding a certification as an assessor or an appraisal license. Keitzer defended hiring this contract assessor without professional assessment credentials in a memo dated October 28, 2023.
Kreitzer’s justification was because “In the State of Alaska, there is no licensing for assessor’s, other than a business license (same for Haines Borough). Although some municipalities require certain levels of certification with the Alaska Association of Assessing Officers, the Haines Borough does not.”
The statement that the State of Alaska does not require licenses for a contract assessor is correct. This is shocking given the fact that in a BOE hearing the assessor’s opinion is valued so highly that appellants bear the burden of proof to overturn an assessed value. In Alaska the real estate profession is highly regulated. You cannot sell, appraise, or even inspect real estate without a licensed issued by the State of Alaska.
Licenses are so commonplace in our society even the person cutting your hair or giving you a massage must be licensed. But the State of Alaska fails to require the person that is presumed to be correct in a quasi-judicial BOE hearing to maintain credentials.
During the appeal process a disturbing trend of misdescriptions of property resulting in excessive assessments and threats of increases in assessments came to light. One homeowner went on the record about the threats he received from the Assessor’s Office that all four of his assessments would be increased if he refused to withdraw his appeals.
You can hear the appellant’s BOE testimony yourself from the Haines BOE hearing on October 11, 2023, starting at 26 minutes and 10 seconds (26:10) at this Haines BOE Oct. 11, 2023 link.
In response to appellants expressing a feeling of extortion Haines Borough attorney provided a legal opinion. The municipal attorney confirmed that statute does indeed allow for the contract assessor to adopt a tactic of threatening to increase assessments if relief is pursued to the BOE.
Dahle was able to do this not because it was just and fair, but rather just because. It is allowable because there is no check on an assessor’s power in the Kangaroo Court, that the BOE hearing process allows under State of Alaska statutes.
The public’s frustration was compounded with borough administration’s refusal to address appellants’ concerns about process errors. Instead of addressing issues, the borough administration acted in bad faith by unilaterally changing the BOE rules for the hearing procedure which required the assessor’s staff report to be made “available to the appellant at least five working days prior to the hearing”.
An appellant pointed out that he was denied due process at his BOE hearing for a variety of reasons including failure to be provided with the staff report on a timely basis. The response from the administration was to simply change the hearing procedure to eliminate the five day requirement. The new BOE hearing procedure only requires the staff report to be made “available to the appellant prior to the hearing”.
This creates an unreasonable standard of delaying the information to the appellate in a quasi-judicial proceeding right up to the moment before the hearing begins.
My journey through this year’s assessment process began in April when I received a corrected assessment notice with a building value for a single-family residence on a vacant lot. It was my expectation that this obvious error would be easily resolved. Instead of receiving resolution I received an email on April 29, 2023 stating that the assessor closed the appeal and issued additional corrected assessment notices.
The corrected assessment notices included a 45% increase on the vacant lot and the transfer of the value of a single-family residence to the adjacent parcel that already was assessed with a residence. The assessor’s office ignored the information submitted with the appeals in June and did not perform a site visit to the properties.
When my appeals were heard by the BOE on October 18, 2023 we were able to successfully articulate the following:
- Intentional misdescription for the purpose of excessively increasing the tax assessment in appeal 2023-226 by valuing an outbuilding as a single-family residence.
- Improper increase of 45% on vacant land in appeal 2023-227.
- The regressive nature of the hybrid cost-approach with inappropriate manipulation of costing and depreciation factors.
- The failure of the new insurance-based replacement cost computer program for homebuilt and rural buildings common in remote areas. This was stated directly by Dahle during the hearing and can be heard on the hearing recording at approximately 1 hour and 36 minutes (1:36) BOE October 18, 2023 audio.
- The lack of professionalism and use of intimidating techniques. There was no effort by the assessor’s office to approach the appeals with honest inquiry, a desire to find truth, or to properly correct the tax assessment record.
Although truth and justice prevailed in these cases they exposed a systemic problem with process failures, retaliatory increases in assessments, and intentional misdescriptions. It showed by example the inherent flaws that can be exploited in Alaska’s property tax assessment process.
Most appellants did not receive justice in their cases. Many were intimidated into dropping their appeals and others were less successful during their BOE hearings.
It is well known that ‘you can’t fight city hall’. Statewide policies and statutes must be written to guide the process and protect the public from the heavy hand of local government that can occur due to unintended consequences and bad actors.
Often it takes failings of this magnitude to raise enough awareness to make our public officials understand that action must be taken. We need to prevent this from happening again throughout the State of Alaska.
The appeal process for property tax assessments should not be adversarial. If public officials demonstrate that they are unable or unwilling to conduct themselves responsibility, then there ought to be a law.
We can and must do better.
Brenda Josephson has held elective office on the Haines Borough Assembly and Haines Borough School Board. She also served her community as a Haines Borough Planning Commissioner and as a member of the Haines Chamber of Commerce Board of Directors. She is licensed by the State of Alaska for real estate sales and is a federally licensed tax professional authorized by the US Department of Treasury to practice as an Enrolled Agent before the Internal Revenue Service.
Brenda Josephson is a resident of Haines. The information provided in this article is what she believes to be true and accurate after months of research and personal experience. Hyperlinks to source documents are provided throughout for independent verification of information. People have been called out by name and dates have been provided to tell the full story. The intent is to raise awareness of the systemic flaws in Alaska’s property tax assessment process.
The idea that I should be forced to pay the government rent for the “privilege” of owning my own land is abhorrent.
Taxes are not abhorrent in and of themselves. If we want government services we must pay for them. The problems are: the type of taxes, the way they are assessed, and the size of government and its corruption. Those owning property are in position to benefit from government services more than non-owners. The true abomination is income tax. The more productive you are, the more you pay. We should not tax productivity. Rather, we should be taxing pleasure and laziness. Examples are: entertainment, alchohol, gambling, skiing, hunting, boating, bowling, tourism, recreation, loafing, watching TV, internet surfing, social media. Our entire tax system is based upon inverted logic.
I agree that government has certain legitimate functions and those functions cost money. My objection is to the idea that the government is my ultimate landlord; if I don’t pay my rent (excuse me, taxes) I get kicked out of my home. The various municipal services provided to my property (as opposed to me personally), such as water, sewer and trash, are – and should be – billed separately. If I don’t pay, I don’t get the service. I think fire service is the only exception to this.
For funding other government services unconnected to property ownership, sales/consumption taxes are my preferred vehicle as they don’t punish productivity in the way an income tax does.
I concur
Exactly! Tax is just a fancy government word for legalized theft.
There are still several boroughs in Alaska that do not charge a property tax. Paying these property taxes only ensures the continued growth of Leviathan, further squandering of your money, more micro-managing of your life, and emboldened statist control by myopic middle managers.
Excellent writing, and much appreciated that it is shared here.
With regard to: “In response to appellants expressing a feeling of extortion Haines Borough attorney provided a legal opinion. The municipal attorney confirmed that statute does indeed allow for the contract assessor to adopt a tactic of threatening to increase assessments if relief is pursued to the BOE.” I ask, doesn’t it seem that the an Attorney that works in that capacity for a statutorily defined subdivision of the state should have a higher standard of care than just protecting the corporate entity? Shouldn’t they also have protection of the PUBLIC within their sphere of influence fall under their responsibility? It is clear how they feel comfortable to act in the absence of assuming their FULL responsibility in their position(s) that ultimately should be serving the people, without which their would be no corporate entity. Borough employees would do be wise to recognize this as well. Treat people like subjects, and it all starts to fall apart pretty quickly.
Yes, subjects is exactly how I feel. And I am angry and ready for the tea party.
Agreed North. The potential for corruption is very high. The assessor’s job is to raise money to spend for those who supposedly supervise him/her – this incentivizes bad treatment of the taxpayer with no repercussions to the assessor. While the mil rate is limited, raising assessed values is not – thus pressure to raise assessments. Rapidly and/or unfairly rising “fair market value” in a tight real estate market with high inflation will do two things: drive many from their homes, and/or make us slaves to the taxing entity – a communist ideal that is being forced on us by the political left.
Decouple the assessor’s office from the local department of revenue and elected budget makers. They must be completely independent but fully answerable to both the law and the people. Regulate the hell out of ’em!
Will a Republican government improve this? Depends on how much we can pass! Some of it will be hot air, but what we WILL do is lower interest rates, slow the rapid rise in property values by increasing construction and real estate inventory, significantly lower the truthful inflation rate (not brandon’s bs), and slow government spending (yeah, I know I triggered more than a few with that one!). It is not enough to slow the growth of spending – we need to reduce spending, period, and it CAN BE DONE.
This is why 1776 happened.
MEN took up arms against government oppressors like the tyrants in Haines.
It truly needs to be done again.
Half the people in this country either don’t believe or don’t understand in the sanctity of the Individual versus the State or the Majority.
We have the 2nd Amendment in the Constitution for a very specific reason – and it’s not for hunting or target practice.
Inappropriate.
Quite nearly all of which you state is at least mostly correct. I maintain that going to guns is AT LEAST as risky to the preservation of our Constitutional Republic as a Convention of States would be. It seems there is MUCH work that can be done before taking those sorts of risk is at all reasonable. Many hands make light work. We ALL need to do EVERY little thing that we can. Political solutions are more elusive than ever with the scale that has been achieved with the digital manipulation of elections, with an intensity and severity that has intensified for at least the past two decades. Finding a way to fix things locally is where our efforts have the potential to manifest to the greatest effect.
The Communists are dangerously close to achieving their decades old goals for America. The truth and a system of government that was established to defeat similar circumstances and in anticipation of their arrival, brings them fear. Never fail to bring them the full level of discomfort those two things provide to their collective idealogical efforts, which are doomed to fail, as long as we allow Divine Providence to work through us.
We have the right, as citizens in this country, to abolish government and create a new one. That is the authority that has been given to us, it is written in the Declaration of Independence, in the Constitution of the United States, and the Declaration of Human Rights. Natural Rights – Life. Liberty. Property. These rights are worthy of defending, no matter your political affiliation. We need to work together to overcome this trial, as Americans. Just remember what we all learned and teach it to the children.
Civil servants need to realize that infringing on the liberty of those that make their jobs possible is entirely unacceptable. Bureaucratic indifference is truly a poison, to everyone, including the bureaucrats. This most certainly includes Executive Branch Law Enforcement agencies.
We are truly blessed and privileged, and for those that cannot seem to figure it out, we need to help them to see it. Enough dehumanization. It is time for rehumanization to make a strong comeback. LIFE. We are responsible to take the risks to protect the precious heritage of liberty that we were granted by our founders and the documents they created for us and future generations.
When someone shows up from Juneau and wants to get involved in local politics, get Alaska Seaplanes to drop them deep in the Lynn Canal.
With lead overshoes
Lol should have warned us sooner
Thought you’d have more sense. You can see what dysfunction we have in Juneau from there.
You’re sorta stuck now. Start working today to vote her out at the first opportunity.
Only thing I ask is either keep her or send her to Elfin Cove. We have enough like her here already.
With Juneau being so dysfunctional in their own city, just proves THAT we MUST move the 90 day(++) legislature hearings back to the road system -> Anchorage or the Mat-Su area.
They can take a flight on the Mary P bush express.
As they try to get people to vote on higher property taxes that gets voted down obviously, they simply raise your appraised value of your home.
I cannot add anything to what Brenda has said. I also a Haines resident, aka appellant aka looser, concurs with it all. I have been in this fight starting with the first assembly meeting after receiving my tax bill. And every single BOE meeting. Still in the fight.
Kimberly, you and the many other aggrieved Haines residents have the ultimate power here, whether you realize it or not. And no, it is most adamantly NOT your vote!
What you and others in a similar position need to do is to organize, and to engage in a tax payment boycott. The more of you who refuse to pay your property taxes, the more attention you will get, and the more positive results you will obtain. Individually, your local government can target and attack you, but collectively, they cannot and will not.
I just started to organize an analogous collective boycott of payments, to a local utility that was providing woefully inadequate service to my neighborhood, and believe me, just the threat of such a boycott, including taking it to the local and statewide media, made them jump and rectify the situation pronto.
Article I, Section 2 of The Constitution of the State of Alaska:
Source of Government ~ All political power is inherent in the people. All government originates with the people, is founded upon their will only, and is instituted solely for the good of the people as a whole.
What is outlined in this article, in these comments, and in done TO the people by many of our local governments – is repugnant to our Constitution.
I don’t disagree with you, North.
What I was proposing to Kimberly was merely one practical method of addressing and potentially resolving the situation. A property tax payment boycott would be particularly effective, as unlike income taxes vis a vis the IRS, one has to submit a FULL payment of those property taxes directly to the local government, with no prior withholding or refund involved. So such an organized tax protest and boycott would be immediately and painfully felt by the local government.
Jefferson, I like your proposal.
Looks like we have a few months to get organized. Imagineering now.
And just to be clear, North and especially Kimberly, when I say “organize”, I do not mean that you should or have to organize ALL the affected local taxpayers — even a relatively small group, engaging in a collective tax boycott, will raise a HUGE stink, especially if any local media gets involved. I am talking maybe as few as 20 people here, but obviously, the more who engage in the boycott/protest the better. Simply the public threat of such an organized tax boycott might well be enough to get some appropriate response, as it was for my own.
Yes, subjects is exactly how I feel. And I am angry and ready for the tea party.
We were planning a move to Haines… now, that’s off the table..
Haines has a great roadhouse on the way to Canada. Also a great place to gas up before crossing the border.
Haines has spent decades electing progressives to local government and then spending unwisely…at some point the piper must be paid.
And never mind all the sound businesses that have decided to leave Haines or decided against opening there is the first place because of an adverse political climate.
The proven use of vindictive taxation alone is grounds enough to remove the assessor, recall those on the board of equalization, and justification to create a new system.
The use of local assembly people as the board of equalization is inherently unwise. These people are simply not qualified in the arena of property valuation and therefore too often defer to the assessor’s calculations because they simply have no calculations of their own. But valuing the assessors computer generated calculations after a quick and often erroneous outside perimeter measurement instead of a full appraisal including the interior, materials, and recent comps of a property is either idiotic or criminal.
One needs to realize the goal here. High taxes for equity and equality (you’ll pay for those who don’t work) and the progression of privately owned to government owned. Take a look at commercial real estate here in Juneau, it’s in full swing.
For Anchorage residents, be forwarned.. What happens in Haines, could happen for Anchorage-and with “our” Assembly..anything could be created.
Did they really call it the “Board of Equalization”?
That sounds like a department title I’d expect in Russia, or George Orwell’s 1984.
None of these borough employees should be making anywhere near what they in wages. 4 of them making over 100k?!?!?! That’s ridiculous
The State claims to own everything. (Senate Document 43 SENATE RESOLUTION 62 page 9 April 17, 1933) What makes you think you own anything? All the State/STATE has is color of title and that’s all they can give you. They can’t even sell their numerous descriptions because they are all copyrighted, and their statutes, codes, rules and regulations are privatized and copyrighted too. Why would you think these corporations are your governments? When Roosevelt took the people’s money of substance away, the deal was that Congress was supposed to pay all public debt. The people who labor create credit. All these governmental service providers can create is debt and when they go bankrupt as they have done numerous times, they leave their bankruptcy debts for the people to pay. The actual government of, for and by the people does not have bankruptcy protection. Only corporations can go bankrupt. That includes every US citizen that is a franchise of the US INC or a citizen of the USA Inc. Every PERSON is a MUNICIPAL CORPORATION, and all corporations have been given Person/PERSON status. All those services were more than paid for a long time ago. Who are they charging, you the living man or woman, or the PERSON? Sounds like double-dipping to me. They don’t record your property as private. They “register” it as “residential” and residential does not mean private. It’s a word game of entrapment.
So sad
Just to clarify things, to the best of my knowledge, Juneau is the only municipality in Alaska that now has an ordinance requiring the assessors office to follow the standards set forth by the International Association of assessing officers. Sadly this was brought about by the actions of the same assessor that had caused the citizens of Haines so much grief. Some of us took the issue to the courts and it ended with the City passing the ordinance to ensure it didn’t happen again. While other cities should follow suit, the real asnswer is for the legislature to pass a comprehensive package that ensures fairness and a resoltion process for appellants that is not so cost prohibitive. So when someone says don’t let someone from Juneau help you, ask Brenda who has been helping her. Answer, some of us from Juneau.
Thanks Dave, for the clarification and for your help when I began researching what was going on with the assessment process this year.
After all the grief this Contract Assessor inflicted in Juneau, he and his bag of tricks was welcomed into our community by the Haines Borough Manager, who is also from Juneau. The Contract Assessor acted in bad faith toward the community, but his actions were aided and abetted by the Haines Borough Administrative, the State Assessor, and Alaska statutes which fail to protect the rights of citizens. It is my hope that Haines will follow CBJ’s example and pass an ordinance requiring the assessor’s office to follow established standards. However, the root cause of this issue will not be eradicated without reform at the State level.
Note to the public: Please feel free to contact me if you have any questions or can help to effect positive change. Directory assistance lists my number in Haines.
Brenda; Please call Rep. Mike Prax (District 33 – North Pole) at 907-378-5667 to discuss assessing statutes. (I agree that some changes are probably necessary and would appreciate your expertise.)
When laws are adopted, they are generally understood by the people who adopted them and who are affected by them. Over time government officials are notorious for finding ways to interpret the law to their benefit. This is especially true when it comes to taxes. “Full and true value” was probably well understood when it was put into Alaska law. Now, clever municipalities and administrations have decided that it means something different. The house you built 20 or 30 years ago is now worth 10 times what it cost to build. Why? Because the government thinks “full & true value” means the cost to replace your house with brand new materials, built to modern building codes by a professional contractor. And because municipalities are finding it harder to raise money. They can’t raise taxes without a vote of the citizens, and those citizens are tired of everything going up in price while their income is stolen by inflation and taxes. If a municipality wants to build a public safety building, an administrative building, or a bridge to nowhere they are having difficulty. They increase the value of your property beyond what it is worth so that the government can obtain larger bonds (that you pay for) to do the things you dumb citizens wouldn’t otherwise approve of. That is exactly what is going on in Haines, Alaska, and my guess is that it is happening all over Alaska. Wake up people – the government serves you, not the other way around.
Well said Paul! Couldn’t agree more. What is happening in Haines is a travesty.
Brenda is still upset about getting bumped from the assembly in 2020 and then getting absolutely trounced in the 2021 Assembly election, where she got hundreds less votes than a 20 year old with no experience…since then she’s been striving for relevance.
Oh the 20 year old that quit? Before serving her full term? That one? Just checking
Its public record, look it up. Most people in Haines had their values go up less than 10 percent, some had values go down. Some of it is drastic because of how far behind and how out of date the previous system was. Of course values went up. They used an outdated system and made basically no changes for 10+ years People want there to be some grand conspiracy behind it.
Most of this outcry is the result of about 10-15 very vocal angry people, and then a few other professional outragists like Paul Rogers and Brenda Josephson who both were previously assembly members, but both lost re-election by a large margin. Looks like they are trying to win public favor by stirring everyone up and white knighting. Pretty sad.
Well I would say the over 500 signatures would prove your theory wrong. Do more homework.
And your wrong about Paul losing a reelection he didn’t run again. Just an FYI
Hmmmmm. Sounds like Constance and /or Starryskies are covers for someone we all know well in Haines as “The Assessor in Training.” Is that you Donna Lambert? If so, then pretty sleazy. No? Maybe the library crew? Could be the City Manager too. Regardless, what was stated above is false and if this is someone working for the borough then it is perjury. We can smell a troll a mile away. To everyone else following this abomination, we’re talking a satanic level event.
A petition with over 500 signatures would seem to disagree with you. I have collected many of those signatures and listened to people’s stories and concerns— from staunch Democrats to Republicans, independents, environmentalists, devout religious people to atheists. Not often that happens in Haines! So thank you Haines Borough for giving us something we can all unite over!
News flash: The Haines Assembly voted 6-0 NOT to renew the Assessor’s contract which expires 12/31/2023. I feel sorrow for his next potential employer/community. Problem is not resolved though. We cut the cancer out but it will return until the “body” undergoes a holistic cure. Emergence of opposition “trolls” suggests that tyrannical government is on the run in Haines. We know that we’ve only just begun our work to subjugate the local government to the will of the people—but that’s our goal.
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