NH - Study Shows Flaws in State's Property Tax System

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Thursday, April 20, 2000

Title: Study Shows Flaws in State's Property Tax System


Portsmouth Bureau Chief

PORTSMOUTH  The citys Web site now shows a study indicating the states system of property assessment and equalization is fundamentally flawed.

Property taxation and assessment experts Almy, Gloudemans, Jacobs & Denne have completed their review of the states reassessment practices and equalization and charge it results in a disproportionate and unconstitutional tax burden on New Hampshire property owners. The firm was retained by Coalition of Communities, which has challenged the new statewide property tax to fund education

City Manager John Bohenko said the report will be a key piece of evidence in the constitutional challenge of the tax.

The report notes, among other things, that 75 New Hampshire towns have not completed full property reassessments in the past two decades. Additionally, data errors alone have caused taxpayers in Roxbury to pay roughly a 33 percent higher statewide property tax rate this year than taxpayers in the city of Manchester. Roxburys tax rate to fund education totaled $8.04 per $1,000 of assessed valuation, while the Queen Citys tallied $6.04.

So, while a very small town like Roxbury overpaid $13,423, Manchester underpaid by more than $2 million.

"Youd need a lot of Roxburys to make up for Manchesters underpayment," Bohenko said.

The tax consultants cite major problems at every stage of New Hampshires assessment and equalization process. The report claims the Department of Revenue Administration starts with incomplete and flawed data and screens it in a improper and haphazard manner.

DRA Commissioner Stan Arnold has rejected the 2-inch-thick document, which was completed in March.

But Bohenko said the firm is impartial and does excellent work. He said that Vermont had a statewide property tax and hired Almy, Gloudemans, Jacobs & Denne to review their process. The Vermont report indicated the state had an unfair system in place. Bohenko said the report the state paid the consultants to produce ended up being used against them in suit by Vermont municipalities.

"They thought Vermont had the worst property tax system they had ever seen till they looked at New Hampshires," said Bohenko.

Ultimately, Bohenko said, the review shows that due to DRA miscalculations and ill-conceived procedures, it is impossible to get a fair and equitable statewide property tax as required in the Supreme Courts Claremont decision.

The report says information that provides insight into the usability of a sale is unknown, suggesting that many parcels are making their way into equalization calculations should not be included.

"We conclude the process is in shambles. Even if DRAs statistical methods were reasonable, equalization ratios would be highly unreliable because of the number of data errors and inconsistencies between municipalities. Further, the process is likely to get worse as assessors become aware of the importance of obtaining comparatively high ratios under the statewide property tax," the report stated.

Ted Jankowski, the citys finance director, said the state was asked back in July to participate in the study, and Portsmouth would even pay for the entire cost. But the response the city got was any information that cannot be gleaned from lawyers and high-ranking state officials can be obtained "through interrogatories and depostions."

"We hadnt even filed suit yet," said Jankowski.

"At the very least, the DRA has misled the governor and the legislature into believing that this tax could be applied in a constitutional manner," Jankowski said.

The report can be viewed on the Internet at: www.cityofportsmouth.com

(Citizen staff writer Bea Lewis contributed to this story) http://www.fosters.com/news2000b/april/20/po0420k.htm ====================

-- (Dee360Degree@aol.com), April 20, 2000

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