New Act 46 Districts Should Consider Merging Property Assessment Offices, Committee Says

Dec 29, 2016

A legislative committee is recommending that districts that merge under Act 46 also consider consolidating their property assessment offices.

Lawmakers set up the Aggregate CLA Legislative Study Committee to see if newly merged school districts should also come up with a single Common Level of Appraisal, or CLA.

The Vermont Tax Department uses the CLA to adjust the state education tax between towns, based on whether homes are selling above, or below,  their grand list values.

The committee put out its report this week.

It says the Legislature should create a law that encourages municipalities within the new school districts to also merge their property assessment offices.

"Consolidating the school districts for the evaluation of how the properties are listed would allow everyone in those school districts to make financial decisions coming from the same place," says Douglas Farnham, director of Property Valuation and Review at the Vermont Department of Taxes.

Farnham says under the committee's preferred approach the expanded district would keep a single grand list, and have a single board of listers with representation from each town.

Farnham says the combined grand list would only be used administratively.

"Consolidating the school districts for the evaluation of how the properties are listed would allow everyone in those school districts to make financial decisions coming from the same place." — Douglas Farnham, Vermont Department of Taxes

The proposed change wouldn't impact property values. A town's tax base would continue to be based only on property values in that community.

However, it would ensure that each town within a newly merged district has the same education tax rate.

Farnham says property owners could face new standards while dealing with listers from neighboring towns.

"The one thing that could change for Vermonters is that if assessment practices are different in different towns within one of these districts, before the consolidation, after the consolidation it would necessarily change" he says. "Traditionally you're going to have everyone in that district being treated  the same way. But in a merger the treatment is going to change from what they've historically seen."

Tom Vickery, who represented the Vermont Assessors and Listers Association on the study committee, says that while the proposal might make sense for some districts he doesn't want the legislature to mandate the change.

"The towns can merge if they want to merge, but at this point, let's go slow, because we don't know  what the effect of Act 46 will be in 2019 and 2020," says Vickery. "We don't know what the state's going to do for really merging the districts, and how those mergers are  going to look."

Vickery says smaller towns would benefit because there would be less fluctuation year-to-year with a larger sample size, but the committee found that there might be increased costs, especially for smaller districts that are not regularly updating their grand lists.

"The smaller the number of samples, the more volatile that CLA becomes," he says. "If you have a larger assessment district the more stable that CLA will be over time. And that's a proven fact. That you have a much more stable CLA which is the purpose that the education districts wanted to do."

The committee is also recommending that the CLA be more prominently displayed on property tax bills. Any move to merge listers would require votes from each town.