Town Defends Tax Challenge
West Tisbury Assessors Dip Heavily Into Legal Spending Coffers; Methods to Determine Values Come Under Close Scrutiny
By IAN FEIN
A pending property tax appeal in West Tisbury has triggered mounting legal bills to defend the assessors' position in a complex case that challenges their methods for determining property values.
William W. Graham, who owns 235 acres at Mohu off Lambert's Cove Road, is scheduled to go before the state appellate tax board in May to seek a reduction in his property taxes for fiscal years 2003 and 2004. Mr. Graham said the assessed value of his property is wildly out of proportion to comparable lots.
The case presents serious implications for the town. Mr. Graham's annual tax bills represent roughly three per cent of the overall town levy. In 2002 Mr. Graham's property assessments nearly tripled from $18.5 million to $53.7 million, while his tax bills almost doubled from $130,000 to more than $250,000.
Seeking funds to cover the increased legal spending, West Tisbury executive secretary Jennifer Rand told finance committee members last month the case could have a negative financial effect on the town for years to come. The board of assessors must win this case, she said, and the town intends to defend its position strongly.
Mr. Graham, meanwhile, said he would rather settle the case out of court.
"I don't want to hurt the town. I'll take less than I'm owed in back taxes and am willing to minimize the impact on the town as long as we fix the system going forward," said Mr. Graham, who served as chairman of the Martha's Vineyard Hospital emergency board of trustees in the late 1990s.
"I think I should be paying a lot of taxes. But I also think there should be a fair system in place," he said.
In 2003 West Tisbury assessors valued the land of his 3.7-acre interior lot at $1.3 million, Mr. Graham said, while they assessed a 26-acre subdividable lot that abuts his property at $955,000. According to assessors, Mr. Graham's lot is worth almost 10 times more per acre.
"It's hard to see how a rational system could value a four-acre lot at a 50 per cent premium to a lot that is six times as big," Mr. Graham said, adding that he has similar examples for every lot that he owns. "I think, based on comparable assessments alone, my case is overwhelming. But I have other evidence that will come out at trial that I believe is shocking."
Mr. Graham refused to elaborate, and town officials, including assessors, declined to comment on the case.
News of the tax appeal first surfaced at a selectmen's meeting in December, when Ms. Rand reported that a complicated legal case had emptied the town's $25,000 legal services budget less than halfway through the fiscal year. According to town legal bills provided to the Gazette, the assessors' office - and the Graham case in particular - accounted for more than $17,000 of the spending.
Ms. Rand requested a $20,000 reserve fund transfer to pay any forthcoming legal bills this winter and spring, but selectmen opted for a $10,000 transfer instead. Selectmen said they hope the amount will last until town meeting in April, when the town could ask voters to approve additional legal funds in a warrant article. Ms. Rand said the $10,000 might not last that long.
Running out of legal money is nothing new in West Tisbury. Over the last three years the town has consistently overspent its legal services budget by more than 50 per cent. Ms. Rand wants to increase the legal services fund to $38,000 in next year's budget, but admitted that might not cover the Graham case on top of the town's day-to-day expenses.
"To be perfectly honest, $38,000 won't be enough unless things quiet down," Ms. Rand said. "And I don't see that happening."
The Graham case comes at a time when rising property values and tax bills have placed a spotlight on town assessors across the Vineyard.
This focus is particularly sharp in West Tisbury, which boasts the highest average single-family residential tax bill on the Island.
While assessments determine distribution of a town's tax burden, they are only one-half of the tax bill formula. The other half - a town's tax levy, or the amount of money a town must raise through taxes - is driven by the overall town budget.
In West Tisbury, the town budget has increased at a rate of about 10 per cent each year for the last six years. The fiscal year 2001 budget was roughly $7 million, while next year's proposed budget approaches $12 million, up another 10 per cent from the current fiscal year.
Because of increased spending, the average bill in West Tisbury this year is about $4,150. West Tisbury is the only Vineyard town with an average bill above $4,000.
After receiving their tax bills in December, more than 50 West Tisbury residents filed for property tax abatements prior to the deadline last Tuesday. West Tisbury's total assessments went up 29 per cent this year, from about $2 billion to more than $2.5 billion.
Mr. Graham's property assessments rose another $9 million this year to more than $58 million. He filed an abatement for the current fiscal year last month.
In 2002, the last time the town conducted its triennial revaluation, the assessors received 95 property tax challenges and granted some $61,000 in abatements, one of which was to Livingston Taylor. Mr. Taylor appealed their decision to the appellate tax board, and the assessors later settled with him out of court, reducing the valuation on his Cedar Tree Neck property by 20 per cent, from $3.6 million to $2.9 million.
Mr. Graham said he first took notice of his assessments after the 2002 revaluation, but did not file a formal challenge until the following year. After an abatement hearing in the spring of 2003, assessors granted him a $30,000 break on his tax bills and dropped his total assessment by some $6.1 million. But Mr. Graham appealed their decision to the appellate tax board and added his tax bills for the next fiscal year to the lawsuit.
"I appealed because they didn't fix some obvious fundamental problems that should have resulted in a much greater abatement," Mr. Graham said.
It is understood Mr. Graham intends to take the case to the Massachusetts court of appeals should the appellate tax board deny his appeal.
In September the court of appeals ruled against the West Tisbury assessors and overturned an appellate tax board decision in a case against the Martha's Vineyard Land Bank. The town spent more than $8,000 to defend its position in that case.
"Of course, as public officials in the town, we must weigh the cost of defending legal challenges against the ramifications of a failure to do so," the board of assessors wrote in a letter to the Gazette in September about the land bank case. "We do not regret our decision to defend our interpretation of the law and this town's right to all tax dollars to which it is entitled."