Property Tax Update (from STJ Tradewinds)
Judge Gomez Tosses Out V.I. Unity Day Group’s Property Tax Law Suit
Written by Jaime Elliott
Monday, 07 February 2011 06:00
The V.I. Unity Day Group will not have its day in court on Monday, February 7, just as members had feared.
District Judge Curtis Gomez threw out the group’s lawsuit against the V.I. government on Monday, January 31. Unity Day Group members filed the suit in April 2008 on grounds that property revaluations conducted on the island were based on flawed data.
In his opinion, Gomez ruled that future tax bills might not be based on that data since the V.I. Code stipulates that all properties must be assessed every five years and the data in question began being collected six years ago.
“Given the assessment scheme set forth in the Code, it is not pre-ordained that the plaintiffs will receive tax bills using the BearingPoint assessment system that is challenged in their complaint,” Gomez wrote in his opinion, as quoted in the V.I. Daily News.
While the government is in a new revaluation cycle, however, the data BearingPoint collected — which the V.I. Unity Day Group alleges is seriously flawed — will be the base of future revaluations, according to the group’s attorney James Derr.
“I think the judge’s error is in confusing the collection of the data and the creation of the database with the analysis of the data,” said Derr.
Although Gomez ruled that the group’s case was moot because BearingPoint’s data is not likely to be used for the required revaluations in the future without being altered, Derr maintained that the data needs to be thrown out.
“Gomez’s opinion states there is no likelihood of BearingPoint’s data being used in the new revaluation cycle, but he’s wrong because the data collected is still in the database,” said Derr. “The Tax Assessor has stated that she intends to use that data the next time she issues tax bills at the new rates.”
“The contract between BearingPoint and the government about cyclical reinspection said 10 percent of all existing properties per year should be revisited and corrected,” Derr said. “Using the 2006 base year, that means some of that data, which we say is wrong, could be used as late as 2016.”
Unity Day Group planned to file a motion for reconsideration requesting Gomez to amend his ruling and allow the case to go forward on the basis of that flawed data, Derr explained.
“The argument we’ll make is that part of the case should be allowed to go forward and we should be allowed to challenge the accuracy of the data that was collected,” he said.
“We will be pointing out that there are two things — the data itself and then what you do with that data,” said Derr. “What you do with that data is moot now, but we still contend that the government should not be allowed to use that underlying data.”
The Unity Day Group had 14 days from January 31 to file the motion for reconsideration. Once filed, Gomez will rule whether to amend his opinion or deny the motion. If the motion is denied, Derr planned to file an appeal with the 3rd Circuit, he explained.
Controversy over property taxes in the Virgin Islands has been swirling since 2000, when a group of property owners filed suit against the government alleging the system it was using was unfair.
Following several years of inaction, the court issued an injunction freezing property taxes at 1998 rates, determined to be the last year tax rates were accurate.
The court also required the government to conduct a territory-wide property revaluation and create a viable Board of Tax Review.
The government contracted BearingPoint, which began revaluating properties across the Virgin Islands in June 2004. BearingPoint wrapped up the revaluations in 2008, but many property owners on St. John found errors in those revaluations, which prompted the Unity Day Group’s lawsuit.
In January, Gomez lifted the injunction ruling that the Board of Tax Review was functioning properly and the mandated revaluations were complete. V.I. Unity Day Group members, however, did not settle with the government and instead walked out of mediation.
“Unity Day Group left mediation because the government would not deal with the fact that the data itself is bad and Bearing Point’s ways and methods did not work,” Unity Day Group Property Tax Committee member Pam Gaffin previously told St. John Tradewinds. “We want to say that what Bearing Point did on St. John was incorrect. The results did not meet standards and we need to start from scratch.”
Unity Day Group members pointed to the hundreds of complaints St. John property owners had with their revaluations.
“Out of 1,700 houses, there were 700 informal appeals filed on St. John saying something was wrong with their assessments,” Gaffin said.
Under Gomez’s ruling, the government will issue 2007 tax bills, at the 1998 level, in February. The 2008 bills, also at the 1998 rate, will be issued this summer.
The 2009 bills, the last bills which will reflect the 1998 rates, and 2010 bills, which will reflect newly assessed rates, will both be issued in 2012.
