Vermont Legislature SmartTranscripts:

[Unidentified committee member (House Ways & Means)]: Okay. Yeah. So

[Rep. Emilie Kornheiser (Chair)]: Here we are with the means. Still 10:30 on whatever Wednesday. So it's Wednesday still January 28. We are really almost done with this lunch. So before we jump into the Act 73 report on regional assessment districts, which we are all very excited about, I wanted to give some new staff from the

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: tax department a chance to introduce themselves to

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: us. I'm

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Sarah Remierbach. I'm the

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: new principal assistant for the Department of Taxes. I know a lot of

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: you already, but I'm really

[Rep. Emilie Kornheiser (Chair)]: excited to have you in that new capacity.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: I'm looking forward to seeing you in the committee more. Happy birthday, Rebecca.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Thank you. Back at you, representative Ode.

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: I

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: can't remember connection yet. That's awesome. Happy birthday.

[Rep. Emilie Kornheiser (Chair)]: Jill, floor is yours again. Thanks for spending the whole morning with us.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: I came prepared. Hello again. My name is Jill Remick. I'm the director of property valuation and review at the tax department. I'm going to be co presenting for the next hour or so with our deputy commissioner Rebecca Samaroff and our Senior Policy Analyst Abby Shepherd to walk you through our Regional Assessment District Act 73 of 2025 report. So I think Abby is going to run the slides for us. It

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: is working. Amazing. Can the room hear me okay as well? We can, yeah. Okay. This is gonna be the best hybrid testimony of all time.

[Rep. Emilie Kornheiser (Chair)]: Oh, we actually can't.

[Unidentified committee member (House Ways & Means)]: Okay,

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: turned her try one more time.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Okay, how's this? That's good, thanks. Okay. I think talking into my laptop mic helps a lot. And Jill, I'm happy to kick us off on some of the broad framing slides, if that's That's great. Yeah, thank you. All right, so here's our report. We started with a, you know, too long didn't read summary quickly to kind of set the stage for today. That's the next slide, Abby. Yeah, and this is kind of like covers our kind of like big picture here that, you know, we through this report work, you know, we'll get into a little bit about the legislative history, but this is our, third year engaging deeply on this topic. Through that work, really come to share the legislature's interest in efficiency, consistency, and equity, and property valuation. We had those interests before as well. I think this is a really ripe area of analysis and policy thinking. Our big conclusions here are that state led models have real administrative appeal, you know, undeniable. There's a lot of wins there. You know, also high on my mind, from where I sit in this organization is the fact that successful reforms really depends on both timing and capacity. We'll get into some of the, you know, the nuances that we're thinking about on those topics. And so, from there, this Act 73 report really focuses on what can and should be done right now while keeping the door open for more centralization once we kind of bolster some of these foundational needs for the system today and for future progress there. So, yeah, so in the next slide, just to give you an overview of what Jill and I plan to walk through today, we'll go through the Act 73 legislative charge and, you know, kind of context leading up to that. We'll get into what the heck is a Regional Assessment District or RAD. We have a proposal in this Act 73 report that answers that question. We also will get into these, a set of policy recommendations that are kind of these baseline conditions for success, kind of like foundational needs that would benefit the system today and moving forward, especially if we wanna consider further centralization reforms. We also have a specific host of policy recommendations to support the RAD structure that we're proposing in this report as well. And then we also will go through the trade offs of the state taking a more central role in contracting for reappraisals, and then we'll get into our key takeaways.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: So I'll just give a little overview of what precipitated the conversation. I think following the PBR annual report that we just did, I think a lot of that's probably fresh in everyone's minds. So there was definitely already sort of a concern about the need for individuals to do the listing and assessing work and also the reappraisal work even probably before COVID. And then as happens with the real estate market, it has significantly continued to sort of separate the fair market value from brand list valuations. So we have a perfect storm of we have pretty significant concerns from the communities. I think you folks heard that as well about the CLA and how pretty major impact that can have on tax rates. And then you sort of combine that with this very clear backlog of reappraisals not being done or not being able to be done. So those two things continue to kind of exacerbate each other. And so as Rebecca said, we've spent the last couple of years chewing on this and working with the lawmakers to see how we can sort of address this and turn this ship. It's not gonna happen right away, but there was already sort of this need and it's only gotten greater since we first started having this conversation.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Great, thanks, Dole. And then, you know, I'll get into a little bit about the legislative background leading up to this report. Yeah, so Acts 68 of 2023 was the legislation that included this six year reappraisal cycle, you know, coming into action. This actually came online January 2025. So, you know, we're in it. So that was, you know, the big sea change in the system. And then along with that, the department was tasked with a two year study with a progress report due at the 2023, and then a final report due at the 2024 about regionalizing the reappraisal system statewide to kind of, you know, make the six year cycle, took out of a company a six year cycle, which was, you know, new for the state. And to do that work, we contracted with the International Association of Assessing Officials. You correct my acronym, that's not right, IAAO. We'll call them for the rest of the testimony. And that was a really great partnership. And they brought a lot of awesome expertise and also direct research in Vermont to that work. But I'll just, you know, summarize that, you know, last year in our final report, the department brought the legislature, you know, our big idea, which was grounded in these IAAO recommendations and guidance. And that was for really fully regionalizing all aspects of grant list responsibility, which included both periodic reappraisals and ongoing grant list maintenance, like the kind of work that happens day to day through town officials or town contractors or town employees, depending on what the model is at the town. So really regionalizing all of that at a RAD level, a reappraisal district level. And the details of that proposal proposal are all laid out in that, Act 68 final report. You know, ultimately, there wasn't a big appetite in the state house for creating a new formal layer of governance just for this purpose. And I think, you know, like from my seat, that's understandable. As like I'm sure everyone in this room knows legislators were grappling with challenges that are created by the absence of county government in Vermont, kind of across all policy domains, you know, from emergency management to EMS to, you know, other stuff. So I think against that backdrop, it felt like, you know, creating a really robust county level solution or, you know, county replacement solution for just like one particularly challenging issue among many wasn't, you know, viewed as the most efficient solution. So, what did survive from that work, the Act 68 report, was the concept of convening a working group of stakeholders you know, professionals who actually operate in that space. So the tax department in Act 73 was charged with convening a working group to consider new broader legislative charge, which we'll get to in a second on the next slide. But yeah, just want to call out that that charge kind of reflected an important distinction that we feel a lot here at the tax department where PVR is deeply experienced in supporting listers and assessors on the legislative and technical requirements of their work. But we really don't get into the weeds of the day to day operational realities of doing that work, of municipal administration and what it means to coordinate across town boundaries. So we're really grateful for that charge and the opportunity to take some time with the working group. Oh yeah, and this, I'll just the last thing I'll say again is just, you know, calling out that the other big thing that's happened in the interim is that the six year cycle itself came into effect. That, you know, I think as Jill talked about a bit in her last testimony really has, you know, accelerated the demand for a ready, you know, scarce set of professional resources. So, you know, that just that kind of coming online and becoming the new law of the land has, you know, really changed the context that towns are operating in. And yeah, I think it's really gonna be motivating in itself for municipalities to consider working in new ways to meet the obligations of a six year cycle. So I can hit this one really quick too. This is just a summary of the legislative charge in Act 73. This is at the top of our report itself too. We were tasked with advising the legislature on implementing regional assessment districts. You know, what guidelines, procedures, rules were needed for a regionalized system. We were asked to analyze advantages and disadvantages of state run reappraisals, and also recommend statutory changes. Some specific callouts there were around contracting, around appeals, around the assessment date, which is today, April 1, moving that to January 1. And then also asked for other recommended revisions to make a regionalized system possible. Great. Do you wanna chat a bit about the working group, Jill?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: So as Rebecca articulated, we knew that we really couldn't do this in isolation and we really wanted to formalize having a working group of folks from large and small municipalities, listers, assessors, reappraisal firms, town clerks, the organizations that represent municipalities like Vermont Assessors and Listers Association and VLCT. So we pulled together what was really an incredible group of people. I was at Vala last week and they said, can we keep doing this? Can we keep having these kind of conversations about different things? And I think that's a great idea because it created the space for some really good in-depth deep dives. We traveled to Londonderry. We hosted one here in Montpelier. We did a couple over teams through the summer and the fall. And it was just fantastic in the way that I think the idea of a massive state takeover and not having any saying what's happening and not having any resources to do this work when they're already strained, that had maybe created a little bit of apprehension. Then almost immediately, once we started working, I think the working group members understood and felt that we genuinely were not coming at them with a preconceived design, we genuinely didn't want to hear what was actually working and what was not. So we got a lot of fantastic written and verbal suggestions and dialogue with the members of that group, and they really helped us kind of focus on what we wanted to recommend for you folks in the short and long term about how to make this successful. There were things that we would have never thought of, And there were just perspectives on, hey, they genuinely, the working group came at it from a place of like, how can we improve? What's happening? Nobody's like, everything's fine. Don't change it. But we can't get to step Z if we haven't gotten to A, B, and C yet. So I'm just really grateful for that group. I do want to continue to talk with them about all kinds of different things because every year there's something new. I really appreciate the sort

[Rep. Emilie Kornheiser (Chair)]: of acknowledgment that the current situation is not tenable. Because I think often when very difficult issues come up, there's sort of a impulse to defend the status quo. And so I think it's great that you all even move

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: to like, there's a problem

[Rep. Emilie Kornheiser (Chair)]: that we all need to solve together. So thank you for that.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, even maybe some of the larger municipalities who, like, they individually might feel like they've sort of got things under control, we're very eager to say, how can we help support the smaller municipalities in getting this done? So yeah, we were really fortunate to have that group. There is a web page on our site that has meeting minutes or summaries of our conversations from that if you're interested in deeper diving. Just a big thanks to that working group again.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: And this might be a good time to mention too that this report was, you know, very much informed by the perspective and expertise and, you know, all these rich conversations with our working group. But we did write this report from our perspective at the tax department. It was not a consensus document with the working group, and the working group itself was by no means a monolith either. So I just want to make sure that's clear out of respect for all folks who contributed to these ideas, you know, it certainly, you know, didn't get a formal stamp of approval and would really encourage the testimony to reach out to, or sorry, encourage the committee to reach out to individuals on the working group or, you know, other individuals in the field through VALOR or through your own municipalities who may wanna weigh on these issues.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, that's it. I'm really glad you said that, Rebecca. I'm sorry, I sort of left that out. Yeah, I think what's helpful about the report and what sort of made me feel optimistic were there were places where there was consensus. Okay, we've got some momentum here. And then there were definitely places that there was not gonna be consensus and it was friendly, there were not universal agreement on everything. And this report, I think at the end of the appendix, we actually have some of the VALOR write ups. As Rebecca said, I think the VLCT, VALOR, and then individual, I know there's firms, they'd be happy to come in and talk more. Again, I know they've been entering the past on this topic, but, yeah.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Okay. Cool. So this is kind of like moving in to the meat of our recommendations. Yeah, so part of our, so ACT 73 did, you know, kind of lay out the bones of a RAD structure that was kind of a county based model of grouping municipalities and you know, part of our charge in the report was recommending revisions and we did recommend change to what was contemplated in Act 73 here. So, we'll we'll walk through that and happy to chat through our thinking in-depth on that. But just to start off and frame things, what is a RAD? It is a contiguous, this is in our vision. It's a geographically contiguous group of municipalities that would be aligned with the forthcoming consolidated school district boundaries. And aligned could mean, depending on the size of those boundaries, mean one RAD, one school district, or could mean one school district that has few RADs in it, as long as they don't overlap those school district boundaries. Aligned or contained. Municipalities within a RAD would reappraise on the same six year schedule. We also recommend that the RAD is treated as one entity for the equalization study, which would mean there's one CLA for the RAD. And we'll get into a little bit more on that one on the next slide.

[Rep. Emilie Kornheiser (Chair)]: Before we go to the next.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Another topic.

[Rep. Emilie Kornheiser (Chair)]: Sorry, keep on going.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Oh, sorry. Yeah, I just wanted to do a little bit framing and then we can get into the deets. But yeah, the last piece is that we would also imagine that appeals from lister grievances would be heard by a RAD level appeals board instead of an individual municipal boards of civil authority.

[Rep. Emilie Kornheiser (Chair)]: I have a question, and then I think Representative Higley has something as well. And I'm sure we're gonna get into this, but there's sort of treated as one entity for the equalization study, and then there's treated as one entity for the purposes of other statistical analysis. And I guess that's what I'm Are you envisioning that as well? And would you rather answer that question later in the presentation?

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, well, think, you know, like what others, if you're thinking about like for reappraisal or like what other, I'm curious what other statistical analyses and maybe it's within my depth to answer, but maybe a come back on as well. But definitely for the purposes of the equalization study where we can we can move on to the next slide, Abby. We can kind

[Unidentified committee member (House Ways & Means)]: of get into this and maybe that would be a

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: good time to address Okay, before we do that,

[Rep. Emilie Kornheiser (Chair)]: I want to go to Representative Higley then.

[Rep. Mark Higley (Member)]: Thank you. And again, it might come up with an explanation, but I personally can't see a RAD using a common level of appraisal for the whole RAD. I mean, example would be, you know, a ski area next to my town and a nice lake on the other side of my town. I guess it would be important for me to have an understanding how you could possibly use the same CLA after the equalization study.

[Rep. Emilie Kornheiser (Chair)]: Oh, that's interesting. I think that's why I am excited about it. So we're going to get into it. Let's get into that a little

[Rep. Mark Higley (Member)]: bit more. Excited about it. Again, it's a concern for me. Why would the whole have to experience a common level of appraisal that is way low because properties are selling at JPEG for so much more. That makes no sense to me.

[Rep. Emilie Kornheiser (Chair)]: So where I'm coming from and thinking about it is I I just talked to a member about this yesterday, one property in a small town sells or is a very high value property, and it sort of skews the whole experience of the market for that town and the CLA for that town. But if we had a much larger area that we were examining statistically with that, that would really sort of lower these standout properties that are viewing everything.

[Rep. Mark Higley (Member)]: Well, again, there's already the opportunity for kicking out those ones that are I'd be interested as we go down this road to see how that's going work.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: I'll just interject with putting on my auxiliary Roxbury School Board hat. We just passed a budget. We're one district, and the CLA in Roxbury is significantly lower than Montpelier's. And so the effect of that is even though we passed one school budget, all other factors remain the same because of the CLA, Roxbury's taxes are going up 33% and our operators are going up 1%. So it can have the opposite effect under our current constructs too, those, that doesn't feel particularly equitable within the school district either that they can be that different without any, with the same school budget, same for people spending and all that. But yeah, I think we'll get into that more.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Thank you. Sorry. Yeah. So, you know, I'll just say I like so appreciate this discussion because, you know, this this recommendation has really been, you know, an evolving opinion even within the department because both the points that Representative Kornheiser and Representative Higley are making are both like completely true. They're both true. It's really like a balance of, you know, the upsides and the downsides and kind of our evolving opinion at the department after careful consideration of both, you know, municipal and state level trade offs is that the benefits really outweigh the downsides, particularly in the broader context of Act 73 and what, you know, we're envisioning as our future of funding education. So, you know, just to basically, you all just summarized this perfectly, but the downside that, you know, has often been cited by municipalities is that, you know, folks are reticent to have, you know, neighboring municipalities and whatever's happening in that real estate market impact their home values. You know, makes a lot of sense. Like that will happen, you know, if you contain two municipalities within, or more, you know, within the same CLA. And, you know, to that end, assessment districts do exist in law today as an option for municipalities to, you know, explore and, you know, elect to do voluntarily. But there's been a lot of hesitancy to actually use them. I don't think they are used anywhere right now because of that concern about the impact of, you know, neighboring municipalities real estate market. So so that's real. But you know, what's important to note is that, you know, it often like feels predictable, like what towns might experience relative benefit or detriment from combining into one CLA, but it's not, you know, it's not always that straightforward. You know, as, you know, Jill mentioned, the Montpelier Roxbury, you know, situation that we're all reading about in our local news, you know, that's like a little heartbreaking. And also, like a big part of that is that Roxbury is a really small community and just a couple outlier sales can really affect that CLA. And I'm sure, you know, if you thought about those two towns more merging into one CLA, you would be concerned about Montpelier's market influencing Roxbury. But, you know, think about the trade offs of what Roxbury is experiencing with having just such a small number of sales. You know, they have a couple outliers that are really, you know, throwing off their CLA. So, and that's the upshot, you know, it's like much more stability, the more sales you have involved, much less pull on the calculation from, a few sales year to year, and can see like a lot more consistency in communities of bigger parcel counts, bigger areas. So on balance, we think towns would benefit from larger, more stable groupings of sales within an equalization study. And that's kind of, you know, what's underlying this recommendation here. So what else did I miss on this slide? Yeah, so then, you know, and I'll also just note that in the Act 73 context, the implications of a single CLA for an entire school district are pretty exciting. I'm not sure if that's how school district size will play out. It might be, you know, there's like a few or a handful of grads within a school district, you know, of course, if this vision came to pass, but there would still be major benefits from that significantly kind of simplifying how education tax rates are understood within the district. And, you know, communication from school boards, like folks understanding about their tax liability. So that would be like, you know, regarding these local supplemental district spending votes. I'll just use the example of like one RAD, one school district to make it clear that, you know, like in that case, if it was one RAD overlaid with the school district, everyone in the whole school district have the exact same education spending rate. There'd be no variation based on CLA. In the new system, CLA will be the only reason for different properties within a school district to have different rates. Because the element of today's system where like a town's actual education rate is based on a spending decision will no longer be there. It's just one state where I have a way rate. So, you know, making those if it's if it's, you know, one CLA for the whole school district or, you know, it's like five CLAs for the whole school district instead of one per town, it really simplifies the communication and understanding of like what's going on for a school budget vote. And it's not just the rate too, it's also the design of the new homestead exemption, the income sensitivity program that will replace the property tax credit. Those like exemption amounts are also very town by town in the current, you know, vision of how this will work because of the CLA and the impact of the CLA. So, you know, similarly to the tax rate, you could have, you know, a really uniform a uniform homestead exemption for the whole school district. If you have like a one rad one school district model, you know, everyone in the whole school district be very clear, you know, what what your income based property tax support would be. You know, it could be just one set of rates and one set of exemptions instead of, you know, a whole multi town table. So that's pretty exciting in that context too. Yeah. Any questions on this or that recommendation?

[Rep. Mark Higley (Member)]: Again, I guess you just mentioned one set of exemptions. Are are you talking about all exemptions, like veterans benefits exemptions and business personal property exemptions?

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: No, this is sorry. Yeah, no, I was specifically speaking to the homestead exemption, which is a feature of Act 73, like the new income sensitivity program that would replace today's property tax credit.

[Rep. Mark Higley (Member)]: Okay.

[Unidentified committee member (House Ways & Means)]: Did your working group discuss the possibility that there may not be new districts finalized by the time you want to stand up the regional assessment districts?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, that put a little bit of a wet blanket on some of our conversations. I think one of the places of pretty much, I'd say pretty much consensus was that it made a lot of sense for RADS to align the school districts. Just from the way that our education property tax structure works, how the real estate markets work, how we could combine sort of geographically, That was a place where a lot of folks felt like, and depending on the size, that in some cases, even sort of the size of the district might make a lot of sense for that red overlay. So that did kind of move us from like, oh, there's a concrete light we're maybe working towards to a little bit more like, okay, now there's still more options on the table. But everyone seemed to, pretty much everyone seemed to agree that school districts in some capacity made sense for RAD.

[Unidentified committee member (House Ways & Means)]: Instead of the 12, we came up with an Act 73, just go with whatever that number may be.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Right, well, and depending if it's, I think the 12 was the county based with a smaller county, and that was really the only thing we had to go by at that point in time. And county governance, that's why parallel to all these conversations, we're keeping an eye on that county governance discussion because it became really clear in these conversations this summer and fall, there was no there, there to put this on. There's no thing to build it on, and schools just makes a lot of sense to be a thing to build it from. If five districts or there's 10 districts or 12 districts, that may still need to have more than one rat in it to like get the reappraisal's done. But having that alignment just makes sense from like a lot of different perspectives. Yeah.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Right. And I'll just flag that we did include in the report on appendix five a reference table that does respond to some of the questions I've heard in this committee just like about that original county based RAD model. Like we have the county based RADs laid out with the parcel counts and I think the average time since last reappraisal for all the towns within. So that's still available for folks to look at. And yeah, thanks, Jill, for remembering to make the key point, which is really like the alignment of RADS with these forthcoming school districts was the one clear, consistent, like consensus piece throughout all of our stakeholder discussions. It seemed like a real you know, opportunity to streamline these two worlds that are so interconnected already, you know, a missed opportunity not to even. And yeah, and, you know, I think the timing of, you know, knowing what those districts are is challenging, but you know, I'm not helping kind of like shying away from the fact that from my seat, I think like a slower role on on this area is beneficial for towns and for us at the department. So, you know, it's not a huge downside for my seat necessarily. But definitely it would be nice to know that.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Thank you. Alright. These are some of the pieces I am most excited about where I feel like we did have a lot of consensus. So basically, right, like, we wanna build a really strong foundation to set this up for success, and it's not going to happen overnight. So as we've already mentioned, the career pipeline is really important. We can build the best perfectly aligned RAD structure and parcel count and everything, but if we don't have individuals to come in and do the work, then we will be setting ourselves up for failure. So we've put a lot of emphasis on the career pipeline, for example. We're going to dig into each of these sort of baseline foundations. But these are the pieces I'm excited about because we have to walk before we can run, and we really want to build that strong foundation and target support where we need it so that we can set ourselves up for success in the long run. The other pieces, we definitely feel like, and this was another point, I don't think there was any dissent on this one that we really wanted to spend some time doing an external reappraisal audit. So basically just like, Okay, let's look at this all over. We haven't really taken this apart for twenty plus years. There was a lot of interest from the firms and the towns and getting a little bit more feedback from PVR during their reappraisal. And then at the end of the reappraisal, our evaluation is pretty lacking as far as timing and what we can actually provide for feedback. We also, the work groups, we kept coming back to this parking lot thing that became its own piece of, there are a lot of those back and forths between the state and municipalities that are ripe for some process improvement. Let's leverage this sort of review to see what we can do there. Is there still a

[Rep. Emilie Kornheiser (Chair)]: an internal task force within the administration to do process improvement? There is a fantastic continuous improvement team. And they do

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: they're a huge resource. They provide a lot of one off trainings and can also do a deep dive event.

[Rep. Emilie Kornheiser (Chair)]: I didn't know if that was

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: still Yeah. No, they're great. Thanks. And then we do want to make a correction to the contiguous parcels or a tweak to it to really help make it fully stand up. And we'll walk through that as well. And then like I said, we're establishing CAMA requirements. We've had them in place for our software only, but we're really standing up, Okay, CAMA vendors, knowing that municipalities at this point have the choice of which CAMA vendor that they are using, that rather than trying to, again, dictate or force the use of a single system, bringing the CAM vendors to the table and having some standard data fields and expectations. There's also a project under HISAAR, the Vermont State Archives and Records Administration. Fantastic. Another fantastic group of colleagues They doing testified last year. Oh, good. I'm at least excited about digitizing land records. They're doing like a pilot program right now. But this was another, and the reason this is sort of in this reappraisal lens is one of the many obstacles that we heard from the firms about the cost or the sort of hesitancy to do reappraisals in Vermont was the quality or the access to land records, whether it's that they're you can view them if you can come from ten to noon on Tuesday and view them in person, or is there a statewide repository if these can be maintained? So these are things that can happen for the most part without except for maybe one without statutory change. But they're really exciting things that came out of this working group that

[Rep. Emilie Kornheiser (Chair)]: we want to focus on.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: And like I said, these are things we want to do regardless of what happens going forward. Abby, do you want do the next slide? I think there's right. So this is something, I think, if you were here for the PBR annual report, right? So we just kept running up against this, right? So there's fewer folks who are able to serve as listers each year. And then municipalities are struggling to find people to serve as assessors. So that's sort of the day to day grand less maintenance component. And then the real appraisal firms are desperately trying to find people to do this work. And right now, there isn't really a clear career track. So as I mentioned earlier, we've actually been working with the Department of Labor. We met with Community College of Vermont and the Secretary of State's office. And there's a lot of sort of excitement and interest in us trying to sort of stand up a certification program or some way to kind of get the word out to people who are looking for a different kind of career that we're desperately looking for folks to do this work. And it can be really interesting and rewarding. It can be flexible as far schedule goes. It can be a great way to get out in your community. And as much as you sort of think what would sort of the skill sets or coursework that would be required for this, things like technical writing or data analysis are great skills to have, but it's also a lot of the soft skills of being able to be diplomatic in challenging conversations, being thorough in attention to detail. And the possibilities of employment in this are you can be an independent assessor and work for a few different firms. You could be employed as a full time assessor, like we have here in North Hillier. You can work for these reappraisal firms. And I did want to put in a plug that the reappraisal firm said, make sure to make it clear that we do a lot of our data collection in the summer. So there are even great opportunities for college students who want to do data collection. It doesn't have to be a full year round commitment. We would love some people who want to do intense good work working out in the field in the summertime. So there's a lot of opportunities here. We just got to connect that with the people who might be interested. And this is definitely going beyond what PVR's role typically is. We're very much like an administrative entity. But we see that this is a place we really want to help move the needle on getting folks into this workforce.

[Rep. Mark Higley (Member)]: I think we really make a living, as the Are you sure? I mean, what are we looking at for this child?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: I was just about to say something really glib, but you definitely can. So the hardest ones are if you are patting together part time across a few towns, which some assessors are definitely doing. So if you're contracted assessor, can set your price to some extent because the work is really needed, but you're not going get benefits and paid time off and things like that. So that is definitely a challenge. And that's one of the other reasons we want to remove barriers for towns working together. There is one consortium of towns in Memorial County that across those five towns are sharing an assessor and providing salary and benefits. But it required a lot of work, it requires all those select boards to be in total lockstep cooperation with how they're paying that individual and how they're reimbursing them and how their time is divvied up. So they're a helpful pilot to work out some of those kinks. To be a lister, that's not something you can necessarily make a living full time. And if you're part time, like I said, a lot of folks patch that together. But there are independent contractors who could name their price for assessment and for reappraisals if they meet the criteria. And the reappraisal firms, like I said, are desperately trying to find staff. So what

[Rep. Emilie Kornheiser (Chair)]: does the salary scale look like for a full time person at an appraisal firm?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Well, starting out, I'm not sure, but I think right now it's kind of a name your price. Yeah, yeah.

[Rep. Emilie Kornheiser (Chair)]: That's what I would

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: yeah, one of the challenges that we talked about with this work group a lot is it is not easy if you want to do this work and you're patching together your schedule part time. You're not getting paid time off, you're not getting health insurance, you're not, But right now, are some challenges for towns to sign a contract and share an assessor and have it be a position. How is that position paid? So definitely working out the kinks. But yeah, I think the demand is definitely making it an appealing position. What I hear from folks who are in the work is they love it because it's a great mix of data analysis and real estate wonkiness and then also going out into your community. But yeah, one of the obstacles we're trying to eliminate is how you can work for multiple towns and actually make a living from it, which sort of goes along with the certification program that's now required and what we're working on with these state partners. Because if we can create it as a career that gets some professional recognition, then if you can promote yourself as a, I'm a certified assessor under the Secretary of State's office, or I have received my certification from CCB or Department of Labor, or I've worked in an apprenticeship under the Department of Labor, now I'm on the market, there's jobs out there for these people. So that's the hope, but it doesn't come easy. And definitely sort of in connection with the six year reappraisal cycle and things like that, it's like, if firms need people, the towns need people, How can we help build up that workforce and make it a profession? All right, think I've exhausted that slide. Sorry, Kathy. All right, so I touched on this a little earlier. So right now, PVR reviews a contract and plan that a municipality has set with their individual contractor, and we provide feedback on that to make sure it has consistent expectations. And then off they go. And so there's reappraisals happening. Maybe the lister or assessor is helping with data collection. Maybe the reappraisal firm is hiring multiple people for that window of time to do that work. And then come the year in which the reappraisal is in effect, we get their reappraised brand list. They go through BCA, and we're done. So during that window of time, there's really not any communication between PVR and the firm or PVR and municipality. And so by the time, if there was any evaluation that showed that there were some issues with the reappraisal or there were any suggestions for improvement or there were any other sort of feedback that PVR would have. By the time we give them that feedback, it is well past grievance. It's well past tax bills being sent out. It's really not providing feedback at the moment. So the firms and the municipalities have asked for, and we agree that we would love to sort of take a better look at how we evaluate reappraisals as they're happening and at the end. So for example, right now, we've received everybody's grant list. We're sending out letters saying, hey, your reappraisal's done. And even if we had any feedback at six months later, then they could actually do anything about it. So we would really like to have an independent audit by some entity that can help us break that apart. And we're members of IAAO, so we have some resources from them as well. We also really want to incorporate vertical equity, which is another way to look at COD. So there are tools out there that could provide a little bit more real time feedback for the firms that we're not using right now. And then also just ensuring that, especially as times are changing and we're so desperate to get reappraisals, it's really easy to say, yeah, you're going do it, do it. Just do it. Just get it done. Whereas we really want to make sure that we have some standards for what's included in the contract to protect the municipality and ensure that everybody's on the same page about expectations, especially when it comes to the grievance window, making sure that those contracts really do represent a genuine, full, complete reappraisal in the practices that they employ and the depth through which they are reviewing the grant list and also holding the firms accountable to the outcomes meeting those measures.

[Rep. Emilie Kornheiser (Chair)]: You would do that from your office rather than expecting municipalities to do that kind of thing?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Right, yes. Right, I think next is contiguous parcels.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, and I can start us off on this, Joe, and then may defer weedier questions to you and Abby Shepherd who worked closely with BCGI on outlining this recommendation. So I think this committee is familiar with like the sticky issue of contiguous parcels, how they're handled in our current statute and what was kind of new learning for me is hearing from our working group members who are, you know, in more of the appraisal space and reappraisal firms, you know, just hearing like what a message is when they move from, you know, town to town, just like navigating the different ways that contiguous parcels are treated across municipalities, and it was identified as a real barrier to be able to tackle, you know, like multiple towns at once, this inconsistency. So, you know, I think attention is, you know, correctly placed on remedying this. And, you know, Act 73 took a swing at this for sure, I think based on some recommendations that were in our original Act 68 report. Those Act 68 recommendations were a little different than what ultimately made it into Act 73. So specifically, in Act 73, the combination of contiguously owned parcels is optional for both mapping purposes and then also for property valuation and taxation. So that, you know, the optional nature of that actually could result in even less uniformity, you know, across municipalities who may opt to do different things. And also in equity and valuation where, you know, today under current law for the purposes of taxation, you think of contiguously owned parcels as one chunk, which allows for different, you know, a different account maybe this is something that Jill could explain less clumsily, but there's like, you know, some economies of scale when it comes to valuing your property, so, you know, if you have two adjacent parcels and, you know, they, you know, aggregate to a certain number of acreage, the per acre value of a bigger plot like that is less than if it was just, you know, two distinct plots, which might have a higher per acre value. If you distinct, that's like how town land schedules work. So making it an option for towns to, you know, treat these as contiguous or separate for valuation purposes could lead to, you know, different tax outcomes for the same, you know, types of property and property ownership across different towns. The other issue with the Act 73 proposal is that it's subject to those same contingent contingencies as much of the rest of the bill is. So, you know, if the legislature doesn't meet certain benchmarks, then, you know, that contiguous parcels language will, you know, fall out of statute. So the department in BCGI, Vermont Center for Geographical Information, proposed revised language that would be effective for the twenty twenty seven gram list regardless of contingencies and the rest of the education reform package. This proposal would require that contiguously owned parcels are treated separately, reported separately for mapping purposes, but mapping purposes only. They would still be combined for taxation and valuation purposes as they are today. And, you know, if necessary, like I know that this is like really important for how like current use program functions and, you know, just getting at some of that, you know, what's the proper per acre value questions, town to town.

[Rep. Emilie Kornheiser (Chair)]: Rebecca, I appreciate the move from optional to not optional. That makes a lot of sense. I think if at this moment in time, if we start peeling off contingencies, then there are a lot of contingencies that will start getting peeled off. It's probably not the time in the session yet to start peeling.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Well, hear that. It's just, you know, in this little section of Act 73, this whole reappraisal discussion is not contingent on anything. So, you know, that would kind of loop it into this world we're in that will carry on regardless. I get

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: that. Yeah.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: You know, just as an alternative perspective. Hear

[Rep. Mark Higley (Member)]: you.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: And related to that, what happens right now is about if I buy the lot that is next to us, it is still a separate sellable piece of real estate. It has a deed and it has a span. So when I buy that property, then my tax bill, my assessor is going to combine those so that my property tax bill reflects that combined property and that combined value. And this other parcel becomes inactive. But what happens in practice is that means we lose it. We have these ghost parcels around. So for mapping purposes, BCGI has about 70% of active and inactive parcels represented, but that's not consistent across towns. And the towns are still maintaining that information because at any point, I can then sell that parcel, that could get reactivated under something else. So we want to make sure that we can track active and inactive, which isn't definition of the grant list, but that's like effect or in statute, but that's effectively what it is. So that for mapping and sort of tracking parcel purposes, we've got a complete data set, but it doesn't undermine the combination for like current use or taxation purposes.

[Rep. Mark Higley (Member)]: This is probably a broad question that

[Unidentified committee member (House Ways & Means)]: could not be answered now,

[Rep. Mark Higley (Member)]: but was there any consideration to special assessments in towns like for Coventry, for instance, the select board works with Casella's for their assessed value. They also have tipping fees. Lowell has the wind projects, that's a contracted yearly figure. There was an issue with possibly having the asbestos mines considered a superfund site where Eden and Lowell and the governor had to sign off to have that happen and it didn't happen. How are those sort of situations going to be addressed with a regional assessing district? Are they going to take over the assessing of the Cacelas Landfill? Are they going to, any ideas? Those are pretty specialized situations each town has to deal with.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, I think that's true now. And I think it would be true in a RAD that that could also be a candidate for this CALIP program that we now have. But whatever the entity is, whether it's a RAD or the municipality, we'd still have to value that and still have to establish that if there's a settlement or anything like that. But right now there isn't really like a RAD bull or anybody would sign that. So right now it is definitely the municipality. Yeah, I don't know about the tipping fees. That's new to me. Specialized properties like that for sure would still have to be treated the same as all the other properties that are now under a single RAD.

[Rep. Mark Higley (Member)]: Thanks.

[Rep. Emilie Kornheiser (Chair)]: Back to you too.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, so I could just run through this list and then we have some detailed slides coming up on all or most of these. So this is kind of like shifting from these baseline conditions for success definitely should be pursued to a more honed set of policy recommendations that are more specific to implementing the RAD vision we laid out earlier. So these include the regionalized appeal system we mentioned, standardized contract terms and outcome expectations, restructuring the per person payment for reappraisal and grant list maintenance, which today are combined into one payment, moving the April 1 grant list assessment date, which that specific item was actually part of our statutory charge for this report. We've spoken to this committee about that, I think, over the last, you know, three years of exploration of this topic, and maybe even before. And then state support for reappraisal contracts and grant list assistance where needed for municipalities that are struggling to meet the requirements of the six year cycle. So for that first topic on appeals, it would be great if, with the chair's approval, if Abby could join Jill at the table and walk us through as this our most appeals adjacent team member. Thanks, Abby.

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: So for the record, Shepherd, Department of Texas. I'm the executive policy advisor. We tried to condense our recommendations to two slides, but happy to go into more detail. Big framing, this was one of the big issues that was discussed prior to actually speak in 'twenty three. A lot of the focus was on inequities that these hyper local boards of civil authority, that was really an emphasis of a way to improve equity in faculty valuation to ensure that appeals are currently well handled at the municipal level, will be treated more equitably across the board. In the stakeholder work group that we had last summer and fall, this was more or less a consensus recommendation to move all property valuation away from current municipal boards of civil authority and have an appeals for it, similar to some of the early drafts that this committee looked at last. So we didn't have really drilled in numbers of how many members would be on the board. There were a bunch of different recommendations. We have some of them in our appendices of the report. So we don't have like, you should have five folks or three or what we had imagined coming out of those discussions was generally for hearings, you have an odd number of panelists or hearing officers. And the other recommendation that came out was to ensure that there are enough to cover the number of parcels. So depending on the size of the RAD, there's other decisions that need to be made. You would, in theory, hopefully adjust the number of board members based on the number of parcels. We also recommended coming out of that stakeholder working group that there would be a collective appointment. So each municipality would have representation on the RAD appeals boards, and that it would be a collective appointment process. It could also be a vote. Appointment's probably a little more efficient. A lot of the emphasis was on improving impartiality, so having it be more of a regional level. So at the RAD instead of at the municipal level, you'd have a little more impartiality, not necessarily judging your neighbors. One recommendation, again, not necessarily something that we'd come down really clearly on, but it could be if there were a three member board hearing an appeal, it could be two folks from a municipality where the property is not located and one from that municipality. So there are different ways to come at how you could set up these appeals. We did note here that if the assessment date is changed, which was also a strong consensus recommendation coming out of the working group, that would provide longer appeals pairings for reappraisal firms and contractors to be able to take on more contracts and defend and help with values that are set. So it would also help, it would be sort of more systemic improvement for the system.

[Rep. Mark Higley (Member)]: So what happens after the appeals board makes a decision?

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: Great, thank you. That's maybe not on these slides. We did recommend keeping most of the existing systems. You would still have a list of grievance because the municipalities have still be setting the values. The RAD appeals board would cure those appeals from list of grievances. And then from there, you would have the same system where the select board of the taxpayer appeals to either PPR or directly to Superior Court. And one of our requests in the report as well was to create a more professional hearing officer at the department. And I think that was also something you looked at last year.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Just to remember, maybe

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: you said this, but how about training from area to area so that one area doesn't go down a path that the other area is not? Absolutely. So I think that is also one of the expectations with our education and funding to be able to provide education to the RAD appeals court as well. And that is, I guess, sort of an open question, whether there would be requirements in statute, if we would need to have other attorneys or folks with expertise in valuation on the boards. That said, it may be difficult to set up these boards with lots of folks who come as expertise. So those are kind of open questions. I mean from board to board, so there's consistency from board to board, that Act two fifteen ran into problems with that, when there were changes made to go into an environmental work, and now there are changes that are going be better for it. So there are regions working consistently, consistency on regions. Yes, I see what you're saying. So currently, the district advisors do provide some guidance to the BCAs. And I think that was part of our hope for more standardized guidance, that it would also be a state educational role, guidance role that these appeals boards would have access to trainings and

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, so one the current problems is there's no acquired training for BCA. We heard that a lot from municipal folks. There is the BCA training that BLCT does every year that we help host that reaches a lot and we're strongly encouraging folks to take, but not everybody does. So I think the other hope is if you have fewer at a higher level, then that really helps us consolidate professionalism of the folks that are on the board to provide training rather than, what is it, two sixty one times how many BCA members, that we could actually require them all to take that VLCT training, at least once a year. I mean, nobody likes required trainings, I'm sure it provides consistency. And there are statutory changes every year, or there are Supreme Court decisions. There's reasons why it would be really helpful. So there is a lot of current concern right now that there is no required training for VCA, so right now it is very different in different towns. The outcomes are very different.

[Rep. Emilie Kornheiser (Chair)]: We have about twenty minutes left. And I want to make sure that

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: you hit the highlights that you

[Rep. Emilie Kornheiser (Chair)]: want to hit. And this is absolutely not the last time we're going to

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: talk about this, this session. So there are just some statistics here from a national survey about more or less what to expect for appeals volume. The 1% to 5% on first level of appeal, it would be the Lister Grievance level, up to 1% for second level appeals. That would be the Rad Appeals Board in the new structure, and then 0.1% for third level. So moving on towards to the state, Supreme Court or PVR with a large caveat here. There is a lot of volatility and volume for appeals after reappraisals, real estate market fluctuations, or other big system changes like. And I know you heard testimony last session from the Burlington Tax Appeals Board with some much higher, significantly higher numbers. We don't have that data because it's all at the local level. So we're looking to that experience. And I think we would recommend hearing from them.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: And again, I think it's really important in all these conversations to step back. States like Massachusetts manage property valuation appeals. States like New Hampshire, we are not unique in having property valuation appeals. Again, what we've heard from our counterparts and other states, obviously a lot of them have county, so they may have like a county appeals board, which is like a full time board that hears appeals or a part time board that hears appeals. But it is possible to do more than the parcel counts that we are right now asking of each of these boards. The other piece, again, is the connection is if we are reappraising more regularly, then that huge sticker shock that we see when we haven't reappraised for ten or fifteen years. If you're reappraising every five years, you're getting a change of appraisal notice more regularly. What we've gleaned from IAAO and other states is that once there's a more regular cycle of assessment, then the appeal volume is manageable, because we're not, I mean, can imagine we've gone ten, fifteen years everywhere, because it's

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: percent higher than it was before.

[Rep. Emilie Kornheiser (Chair)]: I appreciate you naming Massachusetts and New Hampshire, because they're very different states, and it's fair

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Welcome to stay there, Abby. You never know. Yeah, I think we discussed this a little bit earlier, right? Just sort of having consistent contract language and outcomes. Again, these are in lieu of the state taking over and having all the contracts. That's one approach. But it seems like the better approach is to really establish minimum contract language and expectations that all the towns can use. And then knowing that within a municipality or within a RAT, there might be a very unique property or there might be For the islands, their appraisers have to go out in boats to see the homes from the water, for example. So there are circumstances that would make one reappraisal different from another. But if we can have minimum expectations, that provides coverage for the towns, provides consistency for the firms, and it just ensures that we're getting consistent results statewide. We also want to make sure that by having really consistent standards, that it might be another barrier we can remove to allow towns to sort of share a contract if they're all like, oh, yeah, this is the same contract language. Let's get in on this together. Also, like I mentioned earlier, if we can ensure that we provide in those contracts, here's the expectations on the work that you're going to be doing and the number of properties that are going to change value or the number properties you're going to make a determination on. We can measure those things, but we have to set that expectation rather than waiting until the contracts come in, which is what we do right now. And then we sort of go, oh, shoot, I don't know if that's going to work. We need to be more proactive in setting those expectations. And then again, it would be great to have part of that process informed by sort of an external audit, because right now I think what we're doing right now has volatility among contract costs and has volatility among contract expectations, and all those things lead to different financial impacts on the towns and different outcomes depending on which contractor or what the contractor does. So not exciting, but will definitely be another sort of foundation that we think is really important.

[Unidentified committee member (House Ways & Means)]: Yeah,

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: what we'd like to do

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: is

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: have consistent contract language that obviously would get with towns and the contractors and say these are the minimum pieces, short of us holding the contracts and each.

[Unidentified committee member (House Ways & Means)]: And the statute or rule?

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: We actually already do have a pretty significant responsibility and administrative rule for reappraisals that also haven't been updated for quite a while. So they are sort of waiting in the wings to get updated depending on how things go, because those haven't been updated for a while. But right, we we have to be careful to ensure we're not trying to overstep a municipal contracting relationship that doesn't involve us. Because it's to get at the reappraisal, which we very much are requiring, and we certify the firms. So it also sort of gives us a leverage that we haven't had or haven't exercised in the past to be like, if you are reappraising in Vermont and you are consistently not passing the evaluation, we will remove you from our list and or you need to start using this language, and we expect this language to be upheld. Is this me?

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, I can roll with this one, Jo.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Okay.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, so are in the realm of per parcel payments. I assume this could be like a rich area of discussion with this group and other stakeholders who want to weigh in, but we do have one, you know, clear recommendation, which is to separate the funding that's dedicated to, you know, supporting municipalities for reappraisal purposes and from money that's intended to support them for grantless maintenance. Under current law, municipalities receive $8.5 per parcel per year for both these purposes combined. You know, having these supported through a single payment, you know, we definitely get a sense of constraint from municipalities because, you know, it doesn't feel sufficiently meaningful to like, you know, have big gains in both areas. So you're always kind of feeling, you know, a little strapped. And the I'll also say just like as a data person, this combination was like particularly vexing as we as the department tried to answer like a seemingly simple question of, you know, how much state support are towns getting for reappraisals. I think when we started on this journey three years ago, I kind of glossed over this payment as the reappraisal payment. I think we often think of it that way, but it really is, you know, municipalities are absolutely authorized to use this funding for their ongoing grand list maintenance too. And, you know, I think it's a real lifeline, especially for small towns who have to use it, you know, more regularly rather than, you know, saving it away for a reappraisal. So, yeah, so working group members were really aligned on, in support of separating the current per parcel payment into two distinct components, transparency reasons and I think it just kind of helps set the stage for a more coherent discussion of other ways we could restructure or, you know, re level some of these payments. Yeah, and I see we did add a second slide here just as context of, you know, what are the current proposal payments and some of their history there. These haven't been, this eight fifty hasn't been revisited for ten years, just for context. So in addition to, you know, kind of bifurcating these payments, the working group members also flagged just like the reality that the six year cycle kind of on its own merits, further rethinking about scale and maybe structure for these payments. Regarding scale, historically, you know, as we all know in this room now, like many towns have reappraised at much longer intervals than six years, which, you know, sometimes like the, I think the average just a handful of years ago was like ten or fifteen years in between reappraisals. So, you know, at that cadence, towns were able to, you know, save up, you know, quite a lot of state support for their reappraisals, and that dynamic really changes with a mandated six year cycle. So that's just one factor there. You know, our best data from reviewing contracts at PVR still has like the average per parcel reappraisal cost at about $100 per parcel. And just like, you know, for a sense of scale, you know, this current per parcel payment of $8.5 if it was used purely for reappraisal, which it isn't always, you know, that would amass over six years to about $50 a little over $50 per parcel. That would be about half the cost of a reappraisal. You know, some working group members flagged, you know, whether 50% is the right ratio, you know, even if that was purely dedicated to reappraisal, considering that education taxes are about three quarters of municipal or, you know, about three quarters of a taxpayer's bill is education tax, and one quarter is municipal on average. And that ratio checks out with our data at the tax department too. Regarding structure, the working group member oh, so I should say, I guess, you know, thinking about the other other half of the half of the need here, so, you know, moving away from reappraisals to more of the grand list maintenance side, our working group members really flagged the importance of, like, you know, just like steady, predictable funding for that as being especially meaningful for smaller municipalities who don't actually draw down a lot of revenue from their parcel accounts because they are so low. This work certainly scales with the amount of parcels you have, but it doesn't scale all the way down to zero. There is definitely a floor of fundamental work that needs to happen, both for, you know, our statewide grant list for the education fund and just for municipal functions. So the idea of a small town or like a low parcel count floor, like a minimum payment was really popular with the group. Yeah, and so then, so that was kind of like in that structure, you know, restructuring that payment, but then also there were some interesting discussions and ideas internally around mechanisms that could align the, this reappraisal support with the new cycle, and kind of like, know, add some incentives there. So some incentives are like, you know, just like kind with some enforcement and encouraging timely reappraisal. So for example, you know, a per parcel payment dedicated to reappraisals could justifiably be paused after six years if know, a town wasn't able, a town or a, you know, group of towns were appraising jointly weren't successfully able to meet that six year timeline. You know, in today's system, towns get, you know, their per parcel payment annually with, you know, without any, without any pause, you know, regardless of if they're, you know, under reappraisal or in the before times when they were CLA based reappraisal orders, you know, that those per parcel payments would still come. So, you know, like in a new system where, you know, a rescaled per parcel payment for reappraisals was targeting a six year cycle, it would make sense if, you know, we pause payments after six years. And that also, you know, pausing those payments could also help offset the fiscal impact of other modifications to the state payment, which is kind of interesting. Oh, yeah, there was another explored by the working group, which was the hold reappraisal funds actually at the state level until on behalf of each municipality until the point where the municipality or municipalities jointly had secured a contract. And this was kind of an interesting idea for us, because you can use, you know, like reinforce adherence to the six year cycle, of course, but also kind of create a clear point where PBR could do some of the work that we're talking about on the previous slides, like confirming essential contract elements are in place, etcetera. So that was an interesting idea that was explored as well. And just like in the interest of time, I could pause there and see if there's any questions, but you know, imagine, imagine deeper discussion on this topic.

[Rep. Mark Higley (Member)]: So under the new six year reappraisal cycle, has the department looked at what that initial cost would be to the state and where the money might come from? Guess right now that $8.50 is through the general fund, correct? $8.50 per parcel?

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Correct. Yeah, but that is worth just mentioning that in the governor's recommended budget, these reappraisal payments are actually recommended to move into the pilot special fund, which is a fund that is that's the fund where local option 25% of local option tax revenue flows into.

[Rep. Emilie Kornheiser (Chair)]: And we'll talk about that this afternoon.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Yeah, yeah, yeah. So just, you know, flagging that this is where my two testimonies align there. Yeah, but so the six year cycle, you know, as it stands today, there's nothing we haven't changed anything about the per parcel payment. Like these per parcel payments would, you know, without intervention, just continue going to towns as they do today based on parcels.

[Rep. Mark Higley (Member)]: Okay. Thank you.

[Unidentified committee member (House Ways & Means)]: I remember discussions last year with some of the appraising firms comparing other states with 10,000 parcels and their costs were about anywhere from $30 to $42 a piece. Rebecca, you mentioned $100 a parcel for a full inspection and reappraisal. I think there was a statistical analysis per parcel was a lot cheaper. That wouldn't necessarily be a full inside inspection. Do you remember those discussions? I don't know if maybe the actual cost is lower if you're not doing the full internal collection.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Yeah, I think that's true and we definitely heard that one of the obstacles to reducing the cost per parcel in Vermont is a combination of our need or our desire to physically inspect properties. We also don't necessarily have other ways to do that in Vermont yet, but I think we should. And the other piece that came up a lot from our working group is permitting and zoning. That in those other states, have consistent permitting and zoning. They find that information from a desk. They don't need to go out and dig through land records or go physically visit. In Vermont, unfortunately, we still do because not all towns have permitting and zoning. If you had that, you'd have a one stop shop to get that information. You could do a desk analysis rather than physical inspection. While it may be a little out of our lane to talk about zoning, it is another factor that has contributed to reappraisal in Vermont being a little higher. It's the quality of the land records and the access to land records and the consistency of zoning or not zoning and permitting makes more legwork to research.

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: Just to

[Unidentified committee member (House Ways & Means)]: follow-up on that though, whether or not you have zoning and if you do have zoning and building permits sometimes,

[Rep. Mark Higley (Member)]: it's still imperative that you go out and look at that. Because again, you find it all over the place. If somebody says they're going to build a 80 square foot shed and you go out there and it's three times the size, these are the sorts of things. You know, that's where it gets corrected, not through so much through the permanent, but through the actual site visit.

[Abby Shepherd, Executive Policy Advisor (Department of Taxes)]: Rebecca?

[Rep. Emilie Kornheiser (Chair)]: Did you have like a final?

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Sorry. Am I getting flagged to say one more thing on funding? Nope, we're gonna stop

[Rep. Emilie Kornheiser (Chair)]: Okay. Talking about

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: So

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: this is another piece that's come up pretty consistently. There is a lot of interest and excitement about this and a lot of like, let's make sure we get all these pieces correct so we get this right. So the idea being that the grand list date has been in statute as April 1 for a long time. And so many pieces flow from that, right? We talked about earlier, like ownership and tax liability and valuation, all of that right now is on April 1. And so there are a few reasons why it makes a lot of sense to move it to January 1. In the context of this conversation, it would basically allow a longer window of time between the May and June and July crunch of grievances and tax bills going out. So the reappraisal contractors say, Hey, yeah, I could do more towns in a year, but if I've only got that few week window between the April 1 and the May when I've got to be sending out change of appraisal notices, if we could have more time to establish those values and go through the grievances, we could help more towns each year. There also was plenty of interest from municipalities as well. It's not like this is something that they don't want either. The only caution from our team and the homestead and so on is just making sure that we catch this everywhere. There's also some benefits for Forest Parks and Recreation because that would shift their reviews for current use parcels to be more in the fall and less in wintertime. So it's sort of one of those constructs that made sense a lot of the time, I'm sure, especially because the anecdote, which I think is true, is that listing used to be a part time role that you could do in the spring when you came back from wherever farming took off or whatever. There was like a window of time that April made a lot of sense and we're just not there anymore. But we'll need to make sure that we do that and build ourselves time for that transition. So that's why this earliest feasible implementation should be 2031. But there's pretty much universal support from this, from municipalities, FPR and the tax department.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Great, so Oh, go ahead. No, go ahead.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: Sorry. No,

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: no, it's fine.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: I think, yeah, no, sorry, go ahead. I thought this was a different Welcome, slide. Thought was something

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: your flavor here. Just before we hop into the trade offs of the state roll and reappraisals, I just, you know, worry I missed a point when I was like setting up the what is a RAD slide. That's pretty important to how we're thinking about this, which is that like, as we've described, like, synchronizing all these formal activities within the RAD, like appeals, you know, potentially, you know, equalization studies, CLA world, you know, standardized contracts, you know, all these pieces that we've laid out. We really expect this to encourage and facilitate cooperation between municipalities, you know, as we pointed out, like given the constraints of the system and, you know, the, you know, that that career pipeline and the workforce development that we're we think is so crucial, you know, isn't gonna happen overnight. So I think, you know, towns are facing expectations of a new six year cycle and really see that it's, you know, maybe time to think about doing things a little differently that, you know, may not have been so appealing in the old world. So, you know, I just want to like say that clearly now, because I think I neglected to say it earlier and like part of our, you know, thinking for the design of these RADS and the proposal we're thinking for putting forward. So, you know, this is like, you know, looking at a different vision, you know, how does a state taking the state taking a more formal role and really like doing the contracting on behalf of these regions or municipalities within them, you know, what are the trade offs there? So, you know, there's some pretty, you know, obvious wins. State control certainly offers administrative advantages. No, can't deny that. You know, in terms of like, procurement ease, especially, you know, in support of, you know, smaller municipalities who may not be, have like a lot of staff time to dedicate to, you know, navigating contracting, things like that. You know, we can really, you know, we can coordinate the reappraisal cycle if the state is doing the assignments of reappraisals, you know, without having to, you know, hope that it all happens on time and, you know, kind of like devising other, you know, mechanisms to incentivize or, you know, enforce that. And yeah, certainly, you know, it's, I think, you know, similar vein coordinating those regional contracts on our end rather than relying on some of the, you know, good tools that exist today, but that are a little cumbersome for municipalities to navigate, like the inter municipal agreements that are laid out, you know, more clearly in the report in more detail just about like what what kind of arrangements are possible today. So that's certainly true. But, you know, for my for my just, know, I'm like really feel a little overwhelmed, also like the risks of a transition like this, especially at the onset, you know, without sufficient staffing and like, you know, real like project management expertise and the technical oversight capacity at the state level, the delays and quality problems could worsen at the onset instead of improve. For the state to take over this responsibility successfully, we really need there to be progress in these same foundational areas that are straining the system today. Like, we would absolutely need the same workforce. And if you're imagining a world where there's still a need for assessors and valuation expertise at the municipal level, because we're not centralizing everything at the state level, you know, just the contracting. I feel like that's even more of a pull in, you know, un centralized and municipal directions on that same limited and declining workforce. So that risk seems real. There is also the issue of local control. I know we are all familiar with that. But yeah, for many local officials and some members of our working group, there's a real, you know, like, untenable mismatch between, you know, the responsibility and, and like accountability to your grant list and then losing that like authority to be contracting for, you know, the professionals that are going set those grant list values. Because in this, you know, in this framework, you know, municipalities would still maintain a lot of the responsibilities of maintaining the grant list, navigating taxpayer issues, defending property valuations, but we'd kind of be missing this piece of, you know, engaging, selecting a reappraisal firm or, you know, having a reappraisal firm of choice to actually be setting those values in the first place. So, you know, that's real and should like certainly be, you considered in these policy explorations. Disrupting existing relationships, this is kind of new learning for me. I'm sure Jill has been familiar with this for a while. But many municipalities have more nuanced contracts with their reappraisal firms where, you know, in addition to doing the periodic mass reappraisals of the municipality, they also have contractual relationships with the same firms to kind of do that ongoing grantless maintenance to support them in the off years too. There's definitely a risk of disrupting that framework that's supporting some municipalities today. The direction we took in this report is really having recommendations that are designed to really balance these challenges and opportunities, especially, you know, like mitigating the risks in the near term, and also just, you know, while laying the groundwork for, you know, possibility of greater centralization moving forward. Because if we can knock out some of these, you know, big challenges that are draining the system today, and certainly, you know, adds a ton of risk, especially at the onset for a transition to state doing the contracting, you know, would be in a much more flexible position to consider things moving forward. So yeah, so our recommended approach really, yeah, just tries to hit a lot of the same benefits that are outlined above, but through more incremental mechanisms that, you know, try to mitigate the risks that we see. Did you want to add anything else on that one, Jill? Or should we roll into?

[Rep. Emilie Kornheiser (Chair)]: I think we should roll.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: We'll roll.

[Jill Remick, Director of Property Valuation & Review (Department of Taxes)]: No, I was just going to add, think, like I said earlier, I'm really excited about the things that might seem small, but I think we'll make an incremental difference. I think it was really important that we had the conversation with the working group because the goals remain the same, that we want to help support towns maintaining a brand list. And okay, what are the pieces we could do in the short and long term to help make that possible? So something as little as us saying we're gonna reevaluate our processes, like Olmstead and current use, you might say, oh, well, why aren't you again? Anyway, well, but that was an example from the working group of when we spend what limited time we have hitting buttons that have nothing to do with our municipal ground list so that those processes can happen, that is also taking away from our capacity. So it's not just needing more bodies, but it's how can we use the people that are here and willing to do the work most effectively. They're like, we're not doing assessment work. We're doing administrative work to maintain statewide systems. So that rang true. That was not something that really occurred to us. Can maybe get some capacity. And the other piece I thought was really great from the working group is just this interest in the goal is not to take things away from each other, but how can we help each other get this work done? So few of the members were like, well, can we find some way that we can help the smaller towns? And if we can't help them, can PBR help them? Is there a way we can still meet these statutory requirements by helping each other rather than having us be sort of punitive. So there's a lot of nuances and threads to pull in a lot of these pieces that might not seem that big, but they're all meant to have that same goal to work towards how can we help get this work done well and with the resources we have and what we'd like to work towards. So I appreciated the opportunity to do the working group. That was a great experience.

[Rep. Emilie Kornheiser (Chair)]: Thank you for all of this work and negotiation and curiosity and all that you've done. We'll figure out what next steps look like for us to move recommendations forward and probably happy back in really soon. Yeah, thanks.

[Rebecca Sameroff, Deputy Commissioner (Department of Taxes)]: Thank you.

[Rep. Emilie Kornheiser (Chair)]: Thanks, everyone. So we are back here at 01:15 to hear from Adam, Gresham, and Rebecca about the governor's recommended budget, and enjoy the AUE open house.