Win Gruening: Tax revolt over property assessments

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By WIN GRUENING

While we all have different ideas on how our tax money should be spent, it’s important to put aside those differences to ensure that property tax assessments are fair, transparent, and justifiable.

Recently, broad agreement on this issue resulted in draft legislation now under consideration. Two bills, SB242 and HB347, each titled “an act relating to assessment of property, boards of equalization, and certification of assessors”, are winding their way through the Alaska State Legislature.

Initially introduced in the Senate under the sponsorship of Sen. Jesse Kiehl and later in the House by Rep. Julie Columbe, the bills have gained bi-partisan co-sponsors and several hearings. Public testimony has been universally in favor of passage.

The impetus for this legislation came about largely through the publication of a white paper on property tax assessments titled “Restoring Public Trust” authored by Haines resident, Brenda Josephson, and Juneau property owner, Greg Adler, representing Goldstein Improvement Company. 

The dust-up over property tax assessments came to the forefront when a group of nearly 600 Haines residents signed a petition requesting their Borough Assembly fire their property tax assessor, Michael Dahle. He was hired by Haines in December 2022 after previously serving as the Deputy Assessor for the City and Borough of Juneau (CBJ). The basis for the petitioners’ complaint was excessive and unequal city-wide tax assessments that failed to comply with state statute in calculating a “full and true value.”

Some property owners experienced assessed value increases of 50%-100% or higher.

Haines taxpayers contended that Mr. Dahle, who was not a licensed appraiser or certified assessor, instituted his own hybrid assessment system that relied heavily on cost replacement values without adequate adjustments for market conditions or functional obsolescence. When taxpayers questioned his methodology and attempted to appeal, they were often stonewalled or, in some cases, threatened with and subjected to even higher retaliatory increases in their assessments.

Under current law, assessors are not required to explain their findings in reaching “true and full value.” They are not obligated to physically survey a subject property or attempt to reach a settlement with its owner before a formal appeal. Furthermore, even if the property owner provides an arms-length sales agreement or fee appraisal, the assessor can disregard it and exclude it as evidence. Appeals heard by a local Board of Equalization (BOE) often defer to the assessor’s opinion.

The draft legislation attempts to correct this through the following provisions:

  • Requires assessors be certified by Alaska Association of Assessing Officers or supervised by a certified assessor
  • Prevents property assessments from being raised out-of-cycle during an appeal 
  • Composition of the BOE would default to an appointed board rather than elected officials
  • Requires the municipality to adopt formal assessment standards
  • Fee appraisals provided by appellants not accepted as full and true value would require the BOE to justify their findings

The hiring of Mr. Dahle should have raised a red flag since he was involved in a similar controversy in Juneau while employed there. During Dahle’s tenure, Juneau property owners experienced similar increases in property assessed values that resulted in hundreds of appeals heard by the Juneau BOE. 

Very few of those appeals were resolved in favor of the appellant and many dropped their appeals when told their assessment could increase. After some litigation, Juneau city officials agreed to pass an ordinance revising and clarifying appeal procedures. However, these revisions incorporate few of the changes contemplated in the state legislation and still leave Juneau property owners open to potential mistreatment.

Haines officials fired Dahle when they realized the seriousness and scope of the complaints leveled by petitioners.  To date, neither CBJ nor the Alaska Municipal League have publicly supported the legislation.

Even though most testifiers were from Juneau and Haines, this is a statewide issue as callers from Anchorage, Kenai, Homer, and Seward shared similar stories of unjustifiable assessment increases.

Needing to boost revenue, municipalities across the state levying property taxes are incentivized to maintain the highest assessed values possible. It’s possible for municipalities with millage rate caps to circumvent them by artificially raising their assessments while keeping their millage rates low.

While not a comprehensive “fix”, the guardrails contained in these bills, when followed by taxing authorities, will help ensure that the burden of proof in reaching a “full and true value” will be more equally shared by the property taxpayer and local government.

After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening became a regular opinion page columnist for the Juneau Empire. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations.

14 COMMENTS

  1. Thank you Win for illuminating this pernicious problem that, when alerted to it, our municipal bureaucracies sought to ignore. It is a sad day when our local governments ignore the en masse concerns of taxpaying citizens. It appears the servants lack respect for their masters.

  2. Unfortunately Wayne’s comments ring true. Our prior assembly could have stood up for the taxpayers as the Haines Assembly finally did. Unfortunately the former manager and finance director were not in favor of doing the right thing so let it fester with continued lying and bullying by the former assessor until numerous court battles encouraged them to at least agree to play by some rules. let’s hope that our legislature passes this so all municipalities are forced to play fair a and square.

  3. I remember once upon a time the French had a very definitive solution to a similar problem, and although in the long-term it ultimately turned out to be beneficial, getting there was a little choppy (see what I did there?)

    One of history’s functions is to serve as a warning …

  4. Well taken but does Juneau Municipal government give a flying flip NO! the Capital city has a major drug problem with the National distinction of being high on POT with tax revenues of 30 POT shops keeping them
    (Muni employees) out of their minds & drugged with POWER & POT! It’s not at all surprising that AML supports this more restrictive BOE making it more like the Politburo! Warning(s) means nothing until its a past tense issue! Is there a solution ask me after history repeats itself! I am in it with you ” Qui’ils mangent de la brioche” Question is what side are you on? Liberty Ed

  5. Some bureaucrat who probably doesn’t even have a high school education sits in a cubical, raises our taxes every year and we don’t even have a vote on it.

    And 90% of that money goes to “educate” other peoples’ children (not mine) about how evil and racist our Founders were, how communism is so wonderful and how they’re in “the wrong body” and should have their genitals cut off. Up until the 80’s we had the number one education system in the world, now we’re 20th, behind even some 3rd world nations!!!

    The vast majority have zero clue how fascist our entire government has become. There’s 104 bureaucracies with 200,000 armed agents with military type weapons and the powers to arrest any American that looks at them wrong. These agencies like the IRSS, EPA, HUD, FDA, even the Park Services and on and on don’t just have these 200,000 armed agents, they make their own laws and even have their own courts. Meanwhile 16,000 bridges are set to collapse, water and sewer pipes by the billions are falling apart, some over 100 years old, the Port of Skankorage is ready to fall into the ocean and it all could have been fixed 20 years ago for $1 trillion while just months ago the Federal Government cartel spent $1.7 trillion to eliminate the thing that’s the very basis of life itself, carbon.

    For myself, the fact that about 99% have zero idea that the Federal Reserve is totally unconstitutional, steals trillion$ from us every year and the fact that most actually believe we have a wonderful justice system when our courts also cost us trillion$ ever year, steal peoples’ property through so-called confiscation laws, have destroyed our schools and child protective services, of which many actually sell children into sex slavery, and on and on and on….it all just makes me give up even trying to help. Find me even ONE politician who even so much as talks about reforming our (in)justice system or eliminating the Federal Reserve (other than Ron Paul). Or forget politicians, when’s the last time anybody here even so much as read an article about simple, simple tort reform? And this while we have the number one most litigious and expensive system on the planet—4 times more expensive and corrupt as the second worst nation, Japan. Too, Susan had a fantastic article on how our Supreme Court simply decided they had the power change the Constitution and destroy our Grand Jury system (the one and only power we had against government corruption). Anybody here read any other article about that? Heard ONE politician even talk about it? Heard even ONE solution?

  6. Great article. In Anchorage, assessments are being used as a tool to increase tax revenue, and like bonds, keeping the tax cap limits out of the equation. And temporary inflation due to supply and demand should not be reflected in the assessment. The municipality can create an increase in local demand simply by making the permitting process undesirable for new construction. This creates a false valuation. Property values should be adjusted fairly and over a long period, not like the stock market. There should not be an annual increase.

  7. Property tax is a wealth tax making property tax inherently unfair. For example, seniors that can no longer afford their homes due to property taxes.

  8. Property tax is a crime. It is a yearly tax on an unrealized gain. Based on what they think your property is worth. Nothing else is taxed this way. Imagine if you owned a saw and every year they demanded you pay a dollar because you owned a saw. Then, if you didn’t pay them they took your saw, so then why would you want a saw?Maybe you just rent the saw and let someone else deal with the city. That’s how they take everything and you are enslaved, because saws are important.

  9. Let’s be clear, the legislation being proposed is a step in the right direction. The question to be answered is this, how can one truly own their property when you are taxed on that very same property. The taxation of Americans is out of control; it is outrageous. Once you have paid off your property you should own it outright. There also should be no taxes for the transfer of property to other people, like your family for instance. This property taxation is stealing money from the American people and preventing generational wealth from being accumulated.

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