Residents angry over sharp rises in some property tax assessments continue to scheme ways to undo or reform the city’s policies, despite insistence from borough officials that they’ve improved their appraisal system to make it more equitable.
“There are young people being hurt by this, there are old people, retired people,” said Paul Rogers, who has been organizing opposition to tax assessments. “This has gotta stop, this is my new mission in life.”
Rogers said he and hundreds of other property owners had their rates hiked based on what he says is a “smoke and mirrors” computer-assisted mass appraisal system that the borough is transitioning to.
The system is widely used around the country, and by the “vast majority” of tax jurisdictions in Alaska, according to state assessor Joe Caissie. Proponents say it is more equitable and efficient but critics say it doesn’t account for unique property characteristics of places like Alaska, where construction is often done by hand.
Rogers insists that the computer-assisted mass appraisal system doesn’t work well for a place like Haines, which has homes and buildings that are often built by hand and have unique construction that make standardized models inaccurate.
“They’re saying ‘We should do you just like we do the suburbs of Chicago’ – Come on guys, this is not how we live,” said Rogers.
Under the computer-assisted mass appraisal system, assessors visit the property and mark specific characteristics, sometimes in fine detail about everything from the square footage of the building, the materials used, to the effective age. Those inputs are calibrated by home sale prices in the area, which have been rising sharply across the state in recent years, including in Haines.
“Sometimes people think of this as a black box, but it really isn’t a black box,” said Michael Dahle, the assessor for the Haines Borough. “We’ve determined the market factors and we’re applying them on a scale to all the properties at a time. It’s not artificial intelligence.” Dahle, who previously worked in Washington state, has more than 20 years experience on assessments and was hired by the borough in the spring. He told KHNS in May that he’s dealt with many unhappy taxpayers over the years, and even death threats.
But Dahle acknowledged that the sales data in Haines are limited to about 200 properties in the past five years. In 2022, there were fewer than thirty properties sold. Those values are broken down into subcategories like whether they have waterfront, or the condition the home is in. Dahle said based on the data, property prices in Haines have grown conservatively at 5% annually over the past few years.
Data obtained from a citizen’s public records request and shared with CVN show that 2023 assessed values are generally more than what properties sold for the past five years, sometimes substantially more even when accounting for the hot market. Critics, like Brenda Josephson, who filed the request, said the rises show the assessments are flawed. She said based on her reading of the data and anecdotal evidence, the mass appraisal system tends to add more assessment value to owners of middle or lower value properties.
“Those people that have the lower income houses are being overburdened by this approach,” said Josephson.
Assessors say higher assessments are a result of rising property values, as well as improvements made since the properties were sold. And, they say that while assessing properties at market value is important, a bigger priority is making sure they are assessed equally based on objective criteria.
By code, the borough is required to inspect properties every six years. Under state law, each property a new assessed value every year. But Dahle, who arrived in Haines in November, said that hadn’t been happening consistently, resulting in some assessments that were up to 15 years old.
“It was identified that we had a lot of inequities that had crept in over all these years in various situations,” he said. “It is normal that when you correct years worth of that kind of circumstance that it generates a lot of appeals.”
More than 220 appeals were filed this year, but 103 have been closed, according to borough data. All but three of those were resolved before being heard by the board of equalization. In 2013, more than 400 appeals were filed.
Rogers doesn’t buy the argument that the new assessments are correcting old inequities. He’s been leading an informal group of concerned citizens discussing ways to help residents appeal their assessments to the board of equalization.
He said at a meeting on Aug. 10 about 20 citizens came with similar concerns and have been sharing information on a “daily or weekly basis” since then. Members have submitted several records requests to the borough about assessment practices. The group is also discussing potential changes to borough code that would prevent the perceived problem in the future. He said some ideas include specifying that the Mayor shouldn’t be involved with board of equalization discussions, limiting the annual rise in property taxes, and limiting what things are assessed.
“We need to put in code you’re not going to assess my outhouse, you’re not gonna assess my doghouse … It’s just arrogant,” said Rogers.
Dahle said doghouses and outhouses are not assessed, but that they are noted on the assessment records. Several people have repeated a claim that an outhouse was assessed at $1,200 in letters to CVN and online, but assessors say it’s is inaccurate. They say the claim resulted from a misunderstanding about what was being assessed and that it was a storage shed, not an outhouse.
Borough assessor Donna Lambert said the spread of misinformation online has been frustrating.
“When people put it on social media – that’s what’s frustrating to me. Why did you not just give me a call? I could have answered that for you, or Michael could have answered that for you,” she said.
The vast majority of appeals are settled before getting to the board of equalization, assessors say, and usually they result from misunderstandings about what was assessed or about the assessment process. If the property owners and the borough can’t agree on parts of the assessment, the case goes to the board of equalization, which is made up of assembly members.
So far the board has heard three cases, including the property Rogers lives on, which has already been heard twice. Two of the cases have been settled in favor of the initial assessed value, while one resulted in a reduction in the property value.
The board of equalization acts as a “quasi-judicial” body to resolve the disputes, but appellants have a high bar to meet.
“The only grounds for adjustment of assessment are proof of unequal, excessive, improper, or under-valuation based on facts that are stated in a valid written appeal or proven at the appeal hearing,” borough manager Annette Kreitzer wrote in a newsletter in late June.
Rogers said he sees several issues with the board of equalization’s process, including involvement from the Mayor. Currently under borough code, the Board of Equalization is governed by the same rules as the assembly, which generally designate the Mayor‘s responsibility to be upholding rules and decorum but also allow him to “take part in matters before the assembly.” Rogers also pointed out the borough’s own guidance for appeals suggests getting a real estate professional’s appraisal done to prove inaccurate assessments, but members of the board of equalization have told him those appraisals shouldn’t be used in adjusting the value.
Borough officials point out that the majority of properties have seen only minor rises. For 52% of property owners, their tax bill went up by $30 or less. While assessments have gone up more than that, the tax rate has dropped slightly. The borough expects to take in slightly more tax revenue this year.
Still, Rogers said he thinks the number of concerns he’s heard from taxpayers suggests the borough’s system is flawed. He said his group is looking at all options, including pushing a referendum similar to California’s Proposition 13, a controversial 1978 citizens’ initiative that, among other things, limited annual property tax increases.
At the very least, he wants residents to be more involved with deciding how tax rates in the borough are decided.
“There hasn’t been any discussion with citizens of the borough about what’s wrong with it and what needs to be fixed,” he said.
Correction: This story previously misstated the source of the requirement to inspect properties every six years. It is borough code, not state law.