Assessor, Panel Clash Over Appeals Process

By Christopher Twarowski

Friday, November 28, 2008

In an office on the fourth floor of the Loudoun County government building, three, maybe four, members of the little-known Board of Equalization of Real Estate Assessments have been passing judgment on property owners' appeals of about $3 billion in tax assessments.

The owners make their case; then the board weighs the arguments and decides whether to lower, raise or uphold the original assessment. Absent from all but one of the more than 40 public proceedings that have been held since June has been the county tax assessor, who valued the homes in the first place. Loudoun is the only jurisdiction in the region that routinely excludes the assessor from the appeals process.

There were no audio recordings of the hearings. The minutes don't include a detailed explanation of the reasoning behind the board's decisions or a breakdown of how members voted.

"It provides a perception that the system's corrupt," said Todd M. Kaufman, Loudoun's tax assessor. "A lot of these things go on behind closed doors."

Board members say Kaufman consistently overvalued properties without rhyme or reason, sometimes assessing property based on its potential, not what it was worth Jan. 1, as is required by law.

Loudoun is experiencing a breakdown in what is supposed to be an arm's-length but cooperative relationship between the assessor, whose office values real estate for tax purposes, and the Board of Equalization, a court-appointed panel authorized to change assessments through appeals.

At stake are millions of tax dollars, the loss of which would have to be offset by the county, possibly through a tax increase. And Loudoun, like other counties in the region, is scrambling to make up revenue shortfalls related to the national economic slowdown.

The number of property owners appealing tax assessments has surged this year across the region. In Loudoun, appeals have more than tripled, from 513 in 2007 to 1,618, according to the board. Other jurisdictions also report jumps from last year: 132 to 611 in Prince William County, 377 to 601 in Arlington County and 562 to 1,617 in Fairfax County.

Officials attribute the increase to several factors, including the weak economy and the housing market decline.

"It's the real estate market being what it is," said Janet Coldsmith, director of the real estate division in Fairfax. "People are looking at all their expenses and trying to save as much as they can anywhere they can. So they're looking here, too."

In Loudoun, property owners -- residential or commercial -- can appeal assessments to Kaufman's office and then to the Board of Equalization, which conducts a public hearing similar to a court hearing before a judge.

Based on the evidence, the panel, which normally has five members but currently has one vacancy, can reduce, increase or affirm the assessor's valuation.

The assumption is that the assessor's valuation is correct, so the burden is on the property owner to prove that it is not, either by showing an error or providing documentation from recent sales of similar properties. Either party can challenge the board's decision with a lawsuit.

The board told Kaufman in May that his testimony at the hearings was no longer required unless sought. Under state law, the board is allowed to exclude the assessor from appeals hearings.

"At times, it got confrontational," Edward A. Maurer, the board's vice chairman, said of interactions between the assessor's office and property owners at hearings. "It didn't bring anything new to the table. It was slowing the process down."

In Loudoun, the Circuit Court appoints the equalization board; in other jurisdictions, such boards are appointed by county commissioners or their equivalent. The boards in Fairfax, Arlington and Prince William counties give property owners and the assessor's office equal opportunity to present evidence. All three list members' votes. Fairfax and Prince William record the meetings. Arlington and Fairfax keep minutes similar to Loudoun's.

Kaufman estimated that the equalization board reduced 35 percent of the assessments appealed this year. That is significantly higher than the roughly 15 percent in Prince William and the 11 percent in Fairfax. In Loudoun, appeals have cut about $415 million this year from county property assessments, Kaufman said.

Kaufman aired his complaints at a meeting Oct. 21 of the county Board of Supervisors. He told supervisors that the Board of Equalization's records are incomplete and that it is impossible for his office to determine how it arrived at decisions granting hundreds of millions of dollars in reductions, he said.

Supervisors questioned the equalization board's decisions.

"There's nothing that we can do to hold the BOE accountable for its decisions?" asked Supervisor James Burton (I-Blue Ridge). "I find that hard to believe."

Kaufman suggested that supervisors appoint their own equalization board. The supervisors voted to have the county attorney advise them of their legal options.

Equalization board members said they were angered by Kaufman's allegations and perplexed by the supervisors' response. They say the tax assessor, supervisors and Circuit Court receive copies of documents detailing the board's decisions and the logic behind them.

"Every single thing we do, everything, is 100 percent public record, accessible," said Scott Littner, the equalization board secretary.

Tagged: real estate, taxes

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