The Big Green Joins the Fight for Fair Assessments
Dartmouth College has entered the fray over the 2018 revaluation of property assessments conducted by the Town of Hanover. By doing so, the College brings all the power and resources of this long-standing institution of Hanover to the fight for fair property tax assessments that the Town has found itself embroiled in. Dartmouth joins the many homeowners and commercial property taxpayers who are challenging the 2018 revaluation either through the 400 tax abatements requested or a petition filed with the Board of Tax and Land Appeals by 66 property taxpayers to redo the 2018 revaluation. Dartmouth, though much of the property that it owns is tax-exempt, owns a substantial amount of taxable property in the form commercial space and graduate student housing. Dartmouth claims in its petition to the Grafton Superior Court that the Town of Hanover has assessed its taxable property at a value of $86.8 million. The College believes that this property in fact has a value of $51.6 million. If the Court were to grant the abatement requested, a reduction in $35 million in value, Hanover would have to refund $622,300 plus statutory interest for the 2018 tax year.
The Revaluation
Part II, Article 6 of the New Hampshire Constitution requires “that there shall be a valuation of the estates within the state taken anew once every five years, at least, and as much oftener as the general court shall order.” This requires municipalities to conduct a full revaluation of the property in each respective town or city once every five years. In order to comply with this provision, the Town of Hanover decided to conduct a statistical update. A statistical update relies upon existing data on the properties without inspecting all properties and updates the values based on recent market data. The Town of Hanover chose the statistical update as opposed to other more comprehensive and reliable methods that are available to conduct a revaluation. Now it is paying the price for its decision.
The statistical update the Town’s Assessor conducted resulted in assessments that rose from 50% to, in some cases, more than double last-year’s assessments. Nearly 400 abatements were filed by taxpayers who were left reeling when they opened their tax bills. The 400 abatements represent about 12% of the 3,400 taxable properties in Hanover.
The Petition for Re-Revaluation
Apart from filing for individual abatements, a group of 66 property taxpayers petitioned the Board of Tax and Land Appeals (“BTLA”) requesting a do-over of the 2018 revaluation. Hanover property taxpayers alleged that sales chasing made the results of the revaluation illegal and violative of accepted standards of assessing
Hanover’s assessor, categorically denies that any sales chasing took place, as reported by the Valley News. However, Richard Joseph and Buff McLaughry, two of the lead petitioners, claim that “two key levers’, construction quality grade and land values, were manipulated by the assessor to back into assessments to achieve desired outcomes. An example that illustrates this alleged manipulation is 10 Pine Drive which sold for $980,000 in 2016. The property’s prior assessment, $537,800, was changed to $968,000 in the 2018 revaluation, only $11,000 less than its sale price in 2016. This was accomplished by manipulating the land value to arrive at $644,800 from a prior land value of $255,500.
The BTLA’s review appraiser will conduct a ratio study comparing recent sales to assessments to produce statistical indicators of equity. Based on the results of the study and statutory criteria, the BTLA will decide whether there is good cause to hold a hearing on the need for a reassessment.
The Town’s Response
In response to the Petition for Re-Revaluation, the Town held a public hearing in September to listen to the concerns over the revaluation. After the public hearing the Advisory Board of Assessors issued “Recommendations Regarding 2018 Valuation Statistical Update and Options Going Forward” on October 11, 2019. In it, the Board blamed many of the errors on the migration of the assessing platform from Vision to Patriot during the summer of 2018. These errors led the Assessor to believe he needed to conduct a “windshield survey” of the Town, a/k/a drive-by assessing, in order to confirm whether the property tax cards were an accurate reflection of the Town’s 3,400 real estate parcels before recalculating property values.
The Advisory Board of Assessors proposed six recommendations. One key recommendation was to hire a third-party assessing consultant to review the overall process. The other key recommendation is that the town should determine the cost and timing of a full measure and list revaluation before 2023. It should be noted that the Board did not recommend a full measure and list, but only that the town should determine the cost.
The Numbers
The Town of Hanover has a substantial amount of taxable property to rely upon to raise its property taxes. In 2018, it valued that property at $2.3 billion. Based on its taxation of this property it raised $44.4 million in taxes to support the municipal, county, local education, and state education obligations. And yet it tried to save money, what the Town Manager estimates at between $175,000 and $350,000 cost of a full measure and list, by doing a statistical update rather than a full measure and list as it had in 2008 and 2013. While the Town may have saved money in the short run, the Town will be paying for years to come in order to resolve the many abatement cases pending in Court and before the Board of Tax and Land Appeals and to respond to the petition for reassessment before the BTLA. In the end, it may be forced to do what it should have done in the first place which is to conduct a full measure and list.
Allobar Strategies provides professional assistance in evaluating the fairness of property tax assessments. If you would like assistance with an evaluation of your property tax, please visit Allobar Strategies or call (603) 333-2211.
By: John F. Hayes, Esq., General Counsel to Allobar Strategies.