From Roy Whiteley, Founder, Marylanders for Fair Property Taxation:
On February 13, 2015, Senator J. B. Jennings informed us that our annual task force SDAT study bill he was planning to introduce for Maryland’s 2.2 property taxpayers and us was unnecessary. The Department of Assessments and Taxation (SDAT) informed him that the task force
study we were requesting, had in fact, just been completed, apparently under legislation that can be found buried in the 2014 SB 172 budget bill. Our 2015 bill proposed to be introduced by Senator Jennings and Delegate Szeliga for the twelfth time would have created a task force to study the whole status, performance, and operation of the Department of Assessments and Taxation (SDAT) not the limited, questionable value, study just competed. Our task force was to be staffed with select citizens from all 24 state jurisdictions, having varying professional backgrounds, expertise, and direct personal experience relative to and conducive to conducting an all inclusive, independent, impartial, unbiased, unrestricted, comprehensive review of the current property assessment and appeals system, evaluate its effectiveness, study alternative methods of creating assessments, that when employed would result in equitable, fair, and uniform assessments commensurate with current market values, recommend and adopt positive reforms to the property tax assessment procedure and appeals process that will be beneficial to both the State and its taxpayers. Delegate Kathy Szeliga, who planned to cross-file the bill in the House, sent us a copy of this latest December, 2014 report on February 17, 2014 for our perusal. We specifically note the at least triple repetition of most of the text thus producing 65 pages of text that easily could be said in one third of the space taken. Our comments regarding this half-heartedly approached 65-page document follows.
Of primary note is the extremely limited charge to the task force. Most startling is the unstated, unwritten fact that the study proceeds on the assumption that the current assessment system bases is infallible or perfect and therefore no other viable methodologies for determination of equal, fair, and uniform assessment valuations are considered. Proceeding on this shortsighted basis, only four items are designated for study. Briefly summarized, they are (1) whether physical exterior inspections are necessary, (2) whether the Department has the ability to adequately and timely maintain changes in property status, (3) the extent calculation discrepancies play in tax credits and exemptions and (4) the feasibility of and legal impediments to contracting with a third party to perform periodic audits of tax credit and exemption programs. This limited charge of items to be studied is but the tip of the iceberg of a failed system whose many failings and faults have often been listed in our writings and hearing testimony. It defies all logic, particularly flawlessly good business logic as an infamous Mr. Spock might say, to attempt to solve a problem when you are a part of the problem and you only look at part of the problem. Certainly, Governor Hogan with his business acumen, will see through this charade and unilaterally create another task force to study the entire flawed system that we repeatedly testify is archaic, biased, corrupt, cumbersome, inaccurate, incomprehensible, inequitable, non-uniform, out of date, subjective, unequal, unfair, and sometimes even vindictive.
In part, SDAT’s law requires the Department to “(1) assess all property that is subject to assessment, (2) enter all taxable property on the assessment rolls and, regardless of whether the property is owned by an individual, corporation, or some other person, to value alike all property of a like kind, (3) continually review all real property assessments to provide a review of each assessment at least each 3-year cycle, (4) set standards or units for assessing various kinds of property using a uniform plan to assess property, and (5) strictly follow the uniform plan”. The December, 2013 Department of Legislative Services audit containing numerous repeated previous year’s audit items in need of correction noted therein and this latest December 15, 2014 report shows that SDAT continually, miserably, fails to correct reoccurring faults. SDAT, now with its own controlling staff committee members, confirms in this December, 2015 report that it is incapable of correcting its own complete departmental mismanagement, shortsightedness, shortcomings, or ability to timely or adequately perform or maintain the tasks it is mandated to perform to ensure the 2.2 property taxpayers of this State equitable, fair, and uniform property assessments. Thus, SDAT continually fails to meet the mandate of the law. Previous Governors and General Assemblies have allowed this travesty to exist, flourish, and prevail by essentially turning their backs on SDAT and the taxpayers that all of them are supposed to serve.
To introduce our thoughts about the report as well as reinforce the limited study reported shortcomings, here are but a few facts about the current property assessment system that illustrate the whole and complete failure of SDAT to meet its mandated tasks that we have reported and testified to for the past twelve years:
– The system is based on construction costs in place since its 1977 inception BUT taxpayers can only challenge these derived costs using actual fair market sales values. It is an unrealistic apples and oranges comparison.
– The assessor staff reduced from 280 to less than 150 with few vacancies being filled.
– The depleted assessor staff is unable to make mandated physical inspections, or update market value databases and indices. Thus, a large percentage, reportedly 33 to 50% of assessments are incorrect due to lack of up-to-date record keeping.
– The new format of assessment worksheets defies transparency. At a hearing wherein we prefiled written questions followed by verbal inquiries about our worksheet failed to gain answers from either our assessor or her supervisor for 22 of 26 items. Each actually were unable to find the data or answers within their own system. Several months have now passed and we are still awaiting answers that we know will never come.
– 625,805 account worksheets or 38% of the original 1.7 million residential sketches are not updated
– A recent state legislative audit shows that 16,948 of 60,199 Montgomery County assessments with discrepancies ranging from 20 to 43 % (Worth $286 million) were without explanation or documentation. That is 28% of the county triennial assessments. Projecting that ratio over the one third of the year’s approximately 666,000 triennial assessments could mean 186,500 are in question.
– An independent Rockville firm analyzed all 2012 assessments for homes in Anne Arundel, Baltimore City, Baltimore, Howard, Montgomery, and Prince George’s counties finding tens of thousands of assessments “wildly out of line with their recent sales prices by as much as 20% above or below the sales price”.
– Triennial assessments insure that at least 2/3 of over 2.2 million taxpayers’ assessments are always at least 2 years out of date.
– Millions of potential assessable tax base dollars are lost and unaccounted for because of these conditions. If these missed base dollars were recorded, tax rates with associated taxes could be drastically reduced for all uniformly assessed properties while still obtaining necessary revenues.
– Comparable property assessment worksheets, only available after filing an assessment appeal, are unavailable to taxpayers on line while SDAT promotes a private firm, SpecPrint, who purchased our 2.2 million worksheet records and profits by their resale negating privacy concerns touted by the SDAT Director. The SDAT Director vigorously opposes our Internet Access to Worksheets bill that would give taxpayers free access to these worksheets for comparison purposes mainly on this premise of his “protecting our privacy”.
– Only about 30,000 appeals are filed each year primarily due to the complexity of the system.Here are a few more examples of unequal, unfair, assessments we have gathered from various media or report articles.
– Identical side-by-side houses built by the same builder in the Towson area have tax bills of $1,968.27 and $3,038.94!!!
– Writer Tom Clancy purchased and combined two condos for $12.5 million. His assessment – $2.2 million
– That same building has 90 condos. At last check, assessments were $368 million LESS than sales with only about half the units sold.
– Harbor East Marriott valued at $155 million taxed at $1 for 25 years.
– Baltimore Lockwood Place valued at $58 million gets $1.5 million tax break until 2024.
– Zenith luxury apartments valued at $40 million pays 15% of property taxes for 15 years.
– Millions of Homestead Tax Credits are given to non-qualified owners. The Baltimore Clerk of Court, Frank Conaway, who recently passed away, was a multiple unit owner that had a homestead credit on each unit. He pleaded ignorance of the law that only entitles you to the credit for the unit you reside in, escaped penalty.
– All Sassafras River waterfront property from Georgetown to below Rock Hall assessed at $50/SF (Over $2 million per acre) without any Kent County property ever selling for that value.
– During the past three years, 29,551 accounts valued at $15.9 billion were not incorporated in assessment rolls due to staff shortages. Just think what the addition of these taxable values to the State’s overall assessable base could mean to State, County and City budgets for tax setting and revenues.
– Tax exemption reviews totaling $6.5 billion only removed $126 million exemptions. A new report recommends a hard look at exemption criteria. We fail to understand criteria that allows hospitals, religious, or other like entities to own and operate a profit making parking garage, shopping center, or other profit making enterprise to be exempt from paying property taxes on said profit making property.
– Average assessor caseload is over 18,600 cases with only about 82% actually being reviewed.
The unadhered to, as well as unwritten, premise in the law and these reports seems to be that the primary purpose of assessments of providing equal, fair, and uniform assessments from which all jurisdictions of government can then equally, fairly, and uniformly set tax caps, tax rates, and taxes to derive the needed revenues to run our government in a truly balanced budget, business-like manner that serves its constituents without governmental waste, corruption, or undue burden on said taxpayers, just is not happening? Here are a few comments on the sleight of hand approach developed in the report.
(1) Physical Inspections. We agree with the December, 2014, task force report finding that external physical inspections are necessary. This is an absolute given. The idea of conducting a pilot aerial photography physical inspection study to evaluate possible property improvements, improve property status accuracy, provide better use of staff resources and instill taxpayer confidence in the overall assessment process and system reporting is paramount. The report confirms this need when it cites the fact that a small sampling of 1554 property inspections reveals that 320 or 20% of the properties had changes. Of those 320 samples, 267 were positive or added value to the assessment.
Only 53 were negative or assessment reducing. The report fails to identify how many of these negative conditions were reported by taxpayers possibly seeking lower assessments/taxes. Of the total 320, only 71 or 22% had building permits that could have provided immediate and positive data for SDAT to input to its database, if properly shared by the permitting authority. Obviously, the building inspection arms of the various jurisdictions need to do a better job of inspection and enforcement of that sector of government to benefit the mandates of SDAT. The public is not going to report assessment-enhancing improvements. It is also unlikely to seek building permits that invite invasion of their property especially where such inspections would likely result in increased assessments even when the permit procedure could provide cost saving dollars or even offer life saving measures. Obvious methods of capturing the scofflaws who ignore permitting laws, is better building inspection plus leveling of and enforcement of stiff fines for non-compliance. The only persons likely to report property changes are those who will benefit from an assessment reduction. It is obvious to us that this is where SDAT could cost effectively and efficiently invest funds to improve its outdated technology and reduce manpower needs by utilizing aerial surveillance techniques, jurisdictional and agency sharing with up to date computer operating systems and programs properly linked to integrate building inspection, permit data, and surveillance information directly to worksheets, as well as assessment valuations and worksheet web site sharing with the taxpaying public. An incentive program for independent reports of value enhancing property improvements should also be given consideration. To some this might be considered snitching. However, the overall beneficial effect of successful reporting is increased data with increased assessable base that could lead to lower tax rates for all.
The report recommendation for the General Assembly or the Governor to create an Advisory Council to consider the report recommendations is a step in the right direction. However, we would vehemently disagree with the proposed make up of the Council. This is again a case of the fox in the hen house with SDAT studying, then acting upon its own faults and problems, without independent, impartial oversight. We have already seen the shoddy results of this type of endeavor. The report bears out the facts that no agency, especially SDAT, can impartially or effectively evaluate its own problems, or correct them. They are just too close to the board to see the handwriting on it. SDAT is quite satisfied with the status quo and too vested in the outcome to make changes or “rock the boat”.
We would strongly suggest such a Council be largely staffed with public-minded interested citizens or activists, best retired or inactive in fields with potential direct conflict with SDAT or the Council’s actions. Appointees should have extensive experience in the following fields – i.e. appraisal and real estate sales, banking, mortgage, and investment, building and construction, commercial business, engineering or architectural, farming and agricultural. To this mix, the report recommendation of providing SDAT, appropriate State agency and local government members, but we say be limited to only as advisory, non-voting, information supplying, members, could be an asset to a truly impartial panel. Prior to our retirement as a VP, Chief Environmental Engineer, and Division Chief of an 800-man consulting engineering firm, we had the honor and privilege of serving on several such State and County impartial, very technical, panels that produced effective reports, regulations, manuals, and recommendations, many of which are still in use today. The impartiality of panel members having such aforementioned credentials should be obvious.
(2) Departmental ability to adequately and timely maintain changes in property status. Again, the report confirms SDAT’s complete failure to meet its own mandated obligations. A depleted staff with little sign of increasing, working with unsupported computer operating systems over 15 years old, at least three generations behind currently available systems, virtually ensures system failures and errors, if only limited to those attributable to lack of available supplier support. The fact that SDAT management routinely, systematically ignored annual equipment, technology, training and staff complement enhancement or education, points to their total lack of dedication, their incompetence, interest, or loyalty to the taxpayer and the administration that appointed them, or service to the public they were supposed to serve. Items such as the nearly $16 billion of changed assessment values not being entered onto the assessment rolls is actually criminal, in total violation of the SDAT mandated law that is one of their primary legal charges. The State, its Counties, Cities, and taxpayers were callously denied this added assessable base that could have easily resulted in either more revenue and or reduced taxes or both. Any Director or manager worth his salt would have seen this total lack of job performance as a complete dereliction of duty and corrected it immediately to fulfill the SDAT mandate of providing a complete assessment as well as assessment recording of ALL taxable property. The lack of staff cited in the report contributing to this serious violation of law is no excuse for upholding the law or for meeting the primary purpose of SDAT’s very existence. Heads should roll for this egregious act of malfeasance; but they won’t. Once again, the previous Governor, his administration, and the General Assembly were completely oblivious to this senseless lack of duty.
(3) Extent calculation discrepancies play in tax credits and exemptions. Again, the report authors continue to blame SDAT’s failings on lack of staff. Any good Director or manager with one iota of business sense would address such problems, particularly staffing, the most important, readily available asset on hand, in order of the priority and cost effective benefit to the State and its taxpayers. Obviously, the management responsible for these fiascos is ill equipped, trained, interested in their performance, or prone to address such matters with the priorities they deserve.
Unfortunately, many of these incompetents remain on the job, poised to continue committing the same errors. We fail to see the cost benefit of allowing tax breaks and exemptions totaling more than $6.5 billion reported for properties reviewed. How can we possibly justify allowing hospitals, religious or other entities who already enjoy tax breaks and exemptions for the proper designated use of their facilities, millions of dollars of additional tax evading perks or breaks and exemptions for profit making ventures such as parking garages, commercial office buildings, and shopping malls that they have successfully invested in? This is an unconscionable abuse of power and another failure by SDAT in not properly regulating exemptions, judiciously monitoring them, and enforcing the letter of the law. To qualify for exemptions, the law specifically requires such entities to “actually use exclusively (their facilities) for a charitable or educational purpose to promote the general welfare of the people of the State.” SDAT has not adhered to these criteria. A report note that $53 million of disallowed exemptions results in the addition to Baltimore City’s tax base that produces $1.2 million in tax revenue is lightly dismissed with an almost indiscernible footnote! It is this callous attitude and lack of proper definition of or extensive scrutiny of exemption criteria, evaluation, or proper application of qualifications that has resulted in untold millions of dollars in exemptions being granted and essentially ignored. Homestead credits appear to be one of the most easily dismissed of missed dollars due to lack of auditing. They even dismiss their lack of audits excuse saying the latest audit “did not produce any results outside the norm for recapture.” The operative word here is “norm” that could mean anything from a zero to 100% error rate is acceptable as within their “norm”. Hardly an acceptable measure of performance, when none is finitely defined. The report repeatedly recommends more detailed reporting for Homestead, Real Property, and Enterprise Zone exemptions to review and evaluate their accuracy and legitimacy. Record keeping and documentation is obviously not a strong suit of SDAT as it shows up as a continuing missing link in the operational process that continually depletes the overall assessable base.
(4) Feasibility of and legal impediments to, contracting with a third party vendor to perform periodic audits of the property tax credit and exemption programs. The report does not recommend the use of an outside vendor to perform audits of the property tax credit and exemption programs even though it cites numerous flaws to SDAT’s operations. The report states that the Office of Legislative Service audits are deemed sufficient. If this is truly the case, why do they then recommend determination of the cost, qualitative, and quantitative benefit to hiring an outside auditor, consider a pilot program, establish a fee structure for said vendor, and review of statutory changes to address confidentiality of tax return information? This contradictory position is then defended with a litany of staffing excuses instead of addressing the true problem — poor management and incompetent use of available resources to maximize benefits. The usual solution of throwing more money and staff at the problem is the suggested fix rather than taking a business approach of adjusting the available sources to accomplish the best cost benefits before adding more personnel and associated costs to the problem. We would hope a more business-like approach might be employed whereby a good management team would institute a rigorous, on hands revamping of the methodologies currently employed to affect and produce better current audits. The use of an outside vendor with an incentive based on dollars accurately, defendably, and legally, produced might easily be self-supporting, highly visible, and beneficial. A pilot trial is a no-brainer, that needs to be tried.
Not surprising, even with the limited scope of the study, is the fact that the current assessment system was partly studied with only four charges, and still generated 65-pages of commentsdocumenting admitted errors, excuses, faults, lack of staff, lack of assessment records resulting in loss of millions of dollars of assessable base, management blunders and incompetency, outdated technology and equipment, poor staff utilization or supervision, recurring, unaddressed problems followed by defensive stonewalling supposedly justifying the actions of a failed bureaucracy. One of our prime concerns advocated by us for more than twelve years, is the fact that other assessment systems might possibly be employed that may require less staff involvement, less upkeep and maintenance cost, less appeals at all three current appeals levels yet provide complete transparency and trust providing equitable, fair, non-subjective and uniform assessment and appeals system that would be acceptable to many taxpayers has not been and now appears unlikely to be considered or studied. Instead, the current study takes the unstated and unwritten existing archaic assessment system replete with these limited study revelations and assumes this current system to be the only system, they assume, can derive their definition of a desired equitable, fair, non-subjective, uniform assessment system. The indentified failures, as well as the unreported ones, show the fallacy of the report’s basic unstated position. We have long advocated the need for this task force study and have offered several solutions to the problem including an automated indexed assessment system based solely on fair market sales values coupled with the nationally recognized Standard and Poor Case Shiller Home Price index. Index values already exist on a daily, monthly, and yearly basis and are geographically attuned to the State in at least four major statistical areas with composite values for Baltimore-Towson,MD.;Bethesda-Frederick-Rockville,MD.;Cumberland,Hagerstown,MD.,Martinsburg, WV. and Salisbury, MD. Fine-tuning, if needed or desired, could be acquired to areas as small as postal zip codes by contracting with Case Shiller. Such a simple automated system based on actual sales made at fair market value or an agreed upon pre-bubble year values kept current via a computerized sales index would eliminate questioning the assessed value, for who would argue against their own sale price paid under fair market conditions? – i.e. the willing buyer, willing seller concept. The obvious decrease in appeals at all three appeals levels is an added financial bonus.
Creating our version of this task force to study an archaic system is long overdue. We suggest that instead of SDAT exercising its own ability to play both judge and jury by studying and reporting in a limited fashion, a full-unrestricted study be conducted by informed citizens who are experiencing the problems first hand and let them provide solutions. An inexpensive study by volunteers selected by the delegations from the State’s 24 jurisdictions should be allowed to look at this property assessment and appeals system to see if there might not be a better way to achieve fair and equal assessment values. There is nothing to fear. It is a win-win situation – with nothing to lose other than a little time to look at an overwhelming system that is abhorred by taxpayers and obviously costing every one – State, County, City and all taxpayers untold millions of dollars. A complete study followed by a pilot trial would provide proof or disproof of the validity of such a system.
The report waits for 55 pages before even touching on the subject of other methodologies. It dismisses the subject in three very short paragraphs. This litany of half truths is typical of the testimony Director Young and his paid lobbyist have espoused in General Assembly hearings successfully beating off any chance of looking at, changing, or improving a failed system totally controlled by non-business like minded administrators who are unwilling to see their own or their system faults and failings or attempt to address or correct them. If this sales indexed system is so unworthy of consideration, where is the vehement poison or itemized proof that other systems such as we suggest for consideration are not viable? If viable arguments really exist why are they not addressed with the usual vitriolic vigor, passion or any concrete evidence to the contrary as the Director defiantly provides in his 9-pages of defense of his administration’s failed system. The answer is simple, they do not exist?! Let us take a look at some of the report’s ludicrous dismissal/rebuttal statements that echo numerous statements previously made by the Director in testimony or media reports:
(1) Others suggest that SDAT does not need to use the recognized methods and techniques of mass appraisal along with the traditional approaches to value. We will be presumptive, assuming that we might be among the “Others” alluded to here. We have never stated SDAT that should not use its current methodology. What we have said is that SDAT should at least consider other methodologies since the current one being employed is fraught with problems. It is replete with errors, inaccuracies, inequities, omissions, non-uniformity, unfairness, and subjectivity to name but a few of the system’s failings, abhorred by most taxpayers, and its total failure is actually documented in the report. Looking at other methodologies after failure after failure since the 1977 inception of the present system is paramount to any good business approach for the development of and improved use of resources, equipment, and staff to maximize, maintain, promote, and attain the most cost efficient results for the mandated operation. None of this is being achieved with the current system or its administration, staff, technology, equipment, or performance of its mandated charges, so why not look for other possible solutions?
(2) Rather, an indexing update of assessments would suffice. It takes more than just a good indexing system to make any system work properly. One has only to look at the current SDAT assessment system that employs at least two indexing systems in its complicated failed system to realize that any indexing system must be kept current to have any value. One is the SDAT cost index defined “as an index which updates historical figures to the current time and location”. Sounds a lot like the one-step approach we are suggesting be looked at. SDAT and the Director admit in media quotes that its cost index is not being kept current citing the age-old excuse of staff shortages. SDAT makes use of yet another index known as the Market Value Index. This index is described as a multiplier used to link the cost and sales approaches to market values. It is applied to the property value derived by the cost approach supposedly to adjust for market conditions. Unfortunately, as noted several times hereinbefore SDAT and the Director admits in media quotes that its Market Value Index is not being kept current again citing the lame excuse of staff shortages. We would again state that each of these failings more likely fall into the category of mismanagement by an incompetent supervisory staff incapable of prioritizing its work to two key elements of its current assessment process.
With our suggested system, all residential property assessments would be assigned an assessed value from some specific date, either its sale date or a cutoff date, whereby all uncontested assessments would then have been deemed correct as shown on current assessment rolls. An index value, such as the daily or monthly, not yearly reported Standard and Poor’s Case Shiller Home Price Index would be attached to each assessed property value establishing the base property value with a dated associated base index. Such index values, according to our Case Shiller sources, can be narrowed to areas as small as postal zip codes thereby negating the mass conglomerate of figures currently employed in SDAT’s present system. At any time thereafter, assuming no positive or negative property changes have occurred, SDAT or anyone could access the daily, monthly or yearly reported Case Shiller Index Value being used and apply it to the base value thereby immediately having the changed up-to-date fair market value. The entire system could be automated to extract the selected information and apply it to every one of the State’s 2.2 million taxable properties without one iota of intervention by a single staff person if the information technology is properly prepared.
(3) It is further suggested assessing staff can be reduced by using indexing. This staff reducing tool should be obvious to anyone willing to actually look at what is being accomplished. The task of establishing the base property assessment data for all 2.2 million properties is already in existence. Based on 2014 figures only 30,000 appeals exist for the approximately 700,000 triennial assessments issue by December 31, 2014. Once those 30,000 appeals are settled, one-third of the 2.2 million properties are fixed and a current index value can be assigned. The next two years can accomplish the same tasks using the same criteria and procedures. From that moment on with the proper technology in place, automation controls the value of the property. No staff involvement is necessary unless physical property changes occur. That property change reporting task, that SDAT is not addressing today, remains to be addressed no matter what methodology or technology is employed. Almost no further appeals are likely for what is now the owner’s sale price since the property owner has either exhausted appeals options or none were instituted to begin with. Hence, staff would be freed of answering assessment appeals, mailing worksheets and comparable data, scheduling and sending notifications of hearings, researching appeal data, making confirmatory site photography and measurement visits, and preparing for hearings or trials. That is staff reducing, cost effective, money saving, current technology, business management, benefiting both the State and its taxpayers.
(4) However, there are inherent problems associated with assessment indexing. Indexing does not provide stability in assessment models from year to year. We cannot understand how anyone can even make such statements. While we would admit there is no such thing as a perfect system, how can a nationally recognized system that evaluates all property sales within specified areas using well-defined property defining parameters and their associated sales values to establish its indices on a daily, monthly or yearly bases not be stable from year to year? The question defies logic. Such a system not only provides better than year to year stability it assures that current out of date triennial assessments where at least two thirds of all assessments are at least two years out of date would be eliminated. That certainly would provide better stability than the existing system provides.
(5) Indexing magnifies dispersion of assessment and creates greater non-uniformity of assessments. We also fail to see the logic of this statement. If the indexing system we propose is based on the actual sale value of the assessed property and is properly indexed to the date in question what dispersion is occurring? Each and every property is being solely and uniformly related to a single property with its original base conditions that is being updated to match the value setting conditions being generated by actual market conditions. No dispersion or separation is occurring. What is occurring is true employment of the definition of “fair market value”.
(6) If neighborhoods are not properly stratified and indexes are not properly analyzed, major assessments errors can occur. We could not agree more with this statement. But isn’t this exactly what SDAT is failing to recognize or accomplish in its present system? SDAT lumps data together from only nine geographic market areas over the entire State. That hardly equates to the system we propose that can derive data from areas as small as a postal zip code. One could not ask for closer proximity to their subject property with that kind of comparative data. Conversely, we have seen and had the Tax Court judge accept comparable SDAT data for properties more than 15 miles from an appealed property location. That action defies the definition of “properly stratified or properly analyzed”. If the bases for the index system is properly scoped, defined, and employed what further analysis would be required? The index developed with the proper parameters should be applicable to all properties subject to application of the index. This is not unlike the more generalized mass appraisal parameters SDAT currently employs and defends as providing equitable, fair, and uniform assessments.
(7) Indexing using national house price surveys only provide indexes of changes in house prices from one period to the next (typically, one year to the next) for large geographic areas. Our previous answers should adequately address this misstatement. Case Shiller has daily, monthly and yearly index values for individual home sales not just changes and they can be tailored to areas as small as postal zip codes. As usual, someone has failed to keep their information up to date. Not surprising given the magnitude of the SDAT system recordkeeping and updating collapse.
(8) National indexes are not specific to assessment neighborhoods, models or construction styles, and do not consider prior level of assessment as compared to current sales prices. The use of indexes is fraught with problems that lead to inaccurate assessments for tax purposes. This is just outright untrue. As noted before, indexes can be fine-tuned to areas as small as postal zip codes. SDAT cannot begin to match that condition with its present system. Models and construction types are unnecessary in our proposed system for each property is only defined as it exists and its value is solely based on its agreed upon sales or appealed values. It stands alone affected only by current market condition establishing indices for whatever size area SDAT would eventually establish for a new system. If the use of indexes is so fraught with problems, why does SDAT employ two of them within its current system? What are these problems? If they really are so egregious, one would think they would have been boldly itemized so such as system could be soundly debunked. The truth is they do not exist.
Such a system has many more good points than any unidentified bad ones. SDAT just is stonewalling, burying its collective heads in the sand, continually failing to recognize its own failed shortcomings. Any good business, especially one dealing with billions of taxpayer dollars, would thoroughly investigate and evaluate any conceivable solution to the myriad of problems it is facing before ever pronouncing or dismissing any other possible cost effective solution to be “fraught with problems”. How can applying a single index number established per SDAT parameters on a preset time period multiplied by a SDAT/taxpayer agreed upon property value possibly result in “inaccurate assessments”?
(9) Owners are afforded the right to appeal their assessments if they do not believe it is correct. The assessment notice asks property owners if they want to appeal the assessed value which is the basis for the property tax. Each assessor spends considerable time in preparing and hearing assessment appeals. This is a CORE requirement that takes away from the time to conduct annual revaluation physical inspections. SDAT usually defends its position in this manner. They fail to recognize that many more property owners are dissatisfied with their assessments than ever appeal them. We have conducted numerous seminars attempting to teach fellow dissatisfied property owners what we have learned about this archaic, biased, corrupt, expensive, incomprehensible, inconvenient, time consuming, stacked deck, no win situation. Our team members include former assessors that have obviously agreed with our thoughts. It is interesting to note that at least two former Directors of SDAT now earn significant fees by representing appellants against the very SDAT bureaucracy they once headed and so vigorously defended. As stated above, our or perhaps some other system, could improve upon many or better yet, all of the listed or perceived problems with SDAT and its antiquated problem laden system. Doing so will, as we have stated before, allow assessors more time to collect, evaluate, and perform cost saving, assessable data base information that is equitable, fair, and uniform as mandated for all taxable property.
The above comments are but a few that illustrate the incompleteness of the aforementioned study and report. Only a comprehensive, no holds barred look at the total picture, will ever produce the in-depth view of the whole system rather than only the four areas addressed. For further addressing of that premise, let us look at the following comments either not addressed or glossed over in the report.
Meetings with the actual party responsible for development of assessments have often been denied at several levels, i.e. assessors, supervisors, Property Tax Assessment Appeals Board. Denial of meetings with assessors performing the original assessment essentially results in the taxpayer being unable to confront his “accuser”. The apparent basis for this move has been to bring in a person of higher authority to present a show of “enforcement”. This usually results in a local County supervisor or a State supervisor from the Baltimore office sitting in on the meeting. Said person often has little or no direct, and most often, no continuing experience or knowledge of the property being considered. Said persons are sometimes in their respective position solely through employment longevity but without the slightest background or experience to appraise property or render appropriate decisions regarding fair market value. Their contribution at such meetings is worthless and usually their presence is for the sole purpose of “stroking” the taxpayer supposedly showing high-level interest in the taxpayer’s concerns.
The mass appraisal system used by the State has limiting factors but is considered a type of necessary tool to set values for the huge number of properties revalued every three years. However, the system users are not knowledgeable about its contents or any ability to adjust the data for any alternate configurations or the resulting values contained in the standard program format. Thus, the assessor, but more importantly the taxpayer, is stuck with a set of undefined standards and associated values and no way of knowing what the bases of value are or how it can be adjusted to meet the actual conditions of the taxpayer’s property.The State indicates it can configure its data such as like properties considering common factors such as location, sales, topography, environmental conditions, zoning, construction methods or type, to value property with homogeneous conditions instead of an averaged composition of mixed use and sized properties. The State’s so-called comparable properties and attendant values are really not comparable. In a recent court case, the Tax Court judge’s ruling stated, “The difficulty I find with the State’s comparables is that they are not.” This is the argument we most often present since we find the assessors do not even have a faintest idea of the definition of “comparable” nor do they know what one is. The State does not even include a definition of comparable in its own “Glossary of Terms”. In our most recent assessor hearings and PTAAB hearings, the assessor used 10 of 12 “comparables” of the type and location dismissed by the previous court’s ruling. Some of these “comparables” were within several doors of those dismissed by the Court and exhibited the same non-comparable traits the court found unacceptable. Obviously, the assessors do not care nor do they learn.
The State uses a number of indices to adjust its figures “to get the figures we want” as a former SDAT Director and his Deputy stated to us in our own home. Each was totally opposed to considering or accepting other well recognized indices used by the insurance and engineering industries and offered by the taxpayer. These would include the highly respected Engineering News Record indices and the indices of Marshall and Swift, Beck or prestigious Standard and Poor Case Shiller Home Price index.
Upon receipt of an assessment notice, the taxpayer is required to file for an appeal BEFORE he can request copies of worksheets of comparable properties. This information, since it is public information, should be available to all taxpayers via the Internet just as the summary information for every property is in the Real Property Data Search database. Assessors and their supervisors routinely ignore requests for the assessor’s comparables prior to the first level assessors’ hearing. The taxpayer is thus left to attend a hearing where the taxpayer must research all data on his own to prove the State in error. This is one of the reasons so few taxpayers ever appeal an assessment they genuinely feel is unfair, incorrect, or unjust. The assessor merely sits back, argues that his figures are correct without having to provide any evidence to back his statements. The hearing results in no changes for the taxpayer unless there happens to be blatant assessor errors in items like dimensions, construction materials, or other misinformation. The taxpayer can only hope the appeal to the second level PTAAB (Property Tax Assessment Appeals Board) hearing will provide better results. If this requirement could be changed to allow Internet access to or the acquisition of a limited number of property worksheets of the taxpayers choosing, taxpayers might be inclined to accept their own assessments after seeing the derivation of the taxpayer’s or assessor’s chosen comparables. This would eliminate the need for the taxpayer to file for an appeal, eliminate the need for the State to schedule and notify the taxpayer of the hearing date, eliminate the paper work by both sides in the event the taxpayer decides to cancel the hearing. Better yet, the State could allow the taxpayer to download the worksheet information from the Internet just as taxpayers are able to do with the Real Property Search-Individual Report. This would also eliminate the “editing” done by some assessors to remove data from worksheets that might be harmful to the State’s position. The State has sold all of our 2.2 million worksheets to a private firm, SpecPrint, who in turn sells them for profit at $115 to $225 per state jurisdiction yet taxpayers cannot obtain a few “comparables” without charge via the Internet. The State SDAT Director claims this is “to protect our privacy. How does selling these records for profit protect our privacy? Our bill to have free Internet Access to Worksheets is vigorously and successfully opposed by SDAT every year.
Upon filing for an appeal, the State when asked for a listing of “comparables” presents a standard page or two of recent “Area Sales Analyses Listings”. This is a worthless list of properties recently sold which vary in construction type, location, and values, most of which bear absolutely no relationship to the subject property being appealed. The State should be required to present a list of true comparables at this time so that the State and taxpayer can be on equal footing when meeting at this first level appeal. Instead, the State does not produce said comparable information for the assessor appeal hearing which almost guarantees that the taxpayer is forced to appeal that information up to the next appeal level, the Property Tax Assessment Appeals Board. Most taxpayers never do. The same procedure is usually followed for the PTAAB meeting where again the taxpayer is often confronted with new material that results in another appeal. This last appeal is to the Tax Court where comparables are REQUIRED to be exchanged by both parties 10 days PRIOR to the court hearing.
Exhibits such as maps, photographs, and comparable sales data or other evidence routinely is purged from assessment office files or not accepted as part of the case file for review or deliberation by PTAAB members.
Recording of meetings has been denied, although now allowed per legislative agreement, because the assessor or PTAABoard was not prepared to do the same. We have yet to see data published informing the taxpayer of this right to use of this educational recording tool.
Several staff personnel at varying levels have been found to be arrogant, biased, rude, unethical, unqualified, and totally inflexible. We have found some personnel incapable of telling the whole truth. When the State’s position can be twisted or slanted, we have found personnel quite willing to “stretch” the facts to obtain a more favorable position for the State. These conditions, although not always readily provable are sometimes outright lies. We have found that recording of our hearings has reduced the incidence of such episodes. Some members think they have or do have apparent “mandates” to reach specific goals in upgrading area evaluations and “correcting” so-called inequities created by perceived favoritism or lack of uniformity among assessors and jurisdictions.
Since they are acting as both judge and jury, they do so with a superior attitude since the law places the burden of proving them wrong on the taxpayer. They openly state this position in a flaunting manner.
Even if shown to be wrong, the department personnel often ignore the wrong conditions, dismissing them with off handed remarks such as “that will be changed in the next assessment cycle” or “that’s what we feel or think is the correct value”. Definitive answers to defend their positions are many times not available and therefore not furnished. Non-definitive answers are impossible to challenge.
We were privileged to attend a meeting arranged by invitation of Delegate Richard Sossi to discuss some of these issues. The Administrator of the MD. PTAABoards traveled from Hagerstown to Annapolis to attend said meeting while in an apparent show of defiance, the invitation was ignored and no one attended from the MD. Department of Taxation and Assessments.
BURDEN OF PROOF
The State is in the unfair position of always being considered correct since the burden of proving State assessments incorrect is on the taxpayer. This premise flies in the face of all other democratic legal positions, whereby a person is usually considered “innocent until proven guilty”. The State should have to prove its position just as the taxpayer is required to do. No one can be right all the time. This premise is often proven when PTAAB and Court rulings reverse assessor’s findings.
Unfortunately, because most taxpayers feel that you “can’t beat city hall” especially when “city hall” is always presumed to be correct that less than 5% of taxpayers ever file appeals. This isn’t because they are satisfied with their assessments, it is because of an apathetic feeling of entering a no win situation. Still smaller percentages ever file for second or third level appeals for the same “stacked deck” mentality.
An assessor, before four witnesses, boldly informed us before we were ever seated for a meeting, “I am right, you have to prove me wrong”. While we understand the premise of the burden of proof being on the taxpayer, said taxpayer should not be faced with a closed mind in what is supposed to be a taxpayer’s opportunity to present data to the assessor that could affect his decision on the appealed property value.This one sided law should certainly be changed to level the playing field. As the law currently stands, the State does not even have to present a case to defend its position since the law presumes the State’s position is correct. Therefore, no matter how strong the taxpayer’s position might be his task is an uphill battle at the very least. We have seen the State refuse to defend its position resting its case without any rebuttal to the taxpayer’s presentation.
Standard filing procedure for appealing assessments results in the State sending the taxpayer a list of so-called “comparables”. This is a page or two of “Area Sales Analyses Listings” showing about 28 to 30 recent sales per page within the jurisdiction where the appeal is filed. These sales are a conglomerate of sales ranging from low/medium priced to multi-million dollar properties. Most listings bear no resemblance to the subject property being appealed. They only demonstrate that this mixed bag of real estate sold for prices ranging from the ridiculous to the sublime. There usually is no direct relationship to a subject property. The appellant property owner is instructed in an accompanying brochure to “Go through this list, find properties that are most similar to the property in question, and then compare the market values or the prices at which they sold”. We question why the State does not follow its own advice and procedures.
When the taxpayer requests “true comparables”, the taxpayer is usually given the aforementioned standard generic “Area Sales Analysis Listing” form. However, at the assessor’s hearing, miraculously, the assessor produces his so-called specific “comparables” which even then, may or may not be truly comparable to the subject property in question. A check of our website, www.marylandersforfairpropertytaxation.com will show examples of some of the actual ridiculous “comparables” offered by the state.
In a recent assessor’s hearing, we showed the State’s worksheet for an adjoining property as a comparable property. This comparable summer dwelling was constructed at the same time and of the same materials (circa 1936), of the same size within 12 square feet, located on the same waterfront but about 5 feet higher and therefore not subject to flooding as we are, in the 65 years we have lived next door. Said improvements on this comparable property were assessed at $4,520 while our property improvement was assessed at $12,470. When this information was presented, the standard retort was given, i.e. “that will be corrected on the next assessment cycle.” These properties are reassessed every three years. We showed that this property that had not changed in assessed value in over 10 years while ours changed every assessment cycle. We were told this next-door property was not reviewed at the same time as ours was. It is impossible to believe that these two remotely located properties such as the two in question here would not be viewed and valued on the same day/visit. These properties are this farm’s only two out-conveyances and they are accessed through this 300-acre farm via a private driveway for the only two properties in the area. The neighboring property must be crossed to get to ours. Following our revelation of this information, the adjoining property improvement assessment was changed by the State to $14,470 presumably so that it could be and was used in our PTAAB hearing as then being equitable. The adjoining property land was reduced a commensurate amount of the raised improvement value even though it does not suffer the same burdens as our property, i.e. frequent flooding, lack of independent water and sewerage facilities, inability to stand alone, therefore not subject to independent sale or development.
PROPERTY TAX ASSESSMENT APPEALS BOARDS (PTAAB)
We have repeatedly been told that the Property Tax Assessment Appeals Board is in fact a quasi taxpayer advocacy board, supposedly protecting the taxpayers’ rights. If the Boards are truly taxpayers’ advocates, they should be separated from the assessment offices and personnel. Some present configurations do not promote a separation of the two entities. Our concerns have not been as numerous nor as egregious with the Property Tax Assessment Appeals Board (PTAAB) process or personnel as it is with the overall performance and conduct of the State assessment procedures and processes. The make-up of the Boards is defined as three members plus an alternate. We have had five persons seated at the table in some hearings. It has been opined that perhaps the alternate and/or some advisory person was present. The latter premise leads us to the fact that presently the taxpayer is totally unfamiliar with the qualifications/background of the Board members. The taxpayer therefore is faced with trying to make a presentation to an audience that is his judge and jury without the benefit of knowing who he is addressing and what their qualifications might be. Having biographical sketches of Board members available on the Internet to a taxpayer prior to a PTAAB appeal could be beneficial to the taxpayer. Our present Governor Hogan, in his position then as appointments secretary during the Erhlich administration, informed us that we “are not entitled to that information”. It might help the taxpayer prepare his facts in a manner more pertinent and meaningful to one or more Board members without “talking down” to them or in a condescending manner.
Alternatively, the opposite might be true, as has been pointed out to us, that because of our technical background and training, we might be presenting material too technical and complex for all members to fully understand and comprehend. Knowing one’s audience can only improve one’s presentation. This naturally leads to the makeup and qualifications of the Boards. Most commissions, councils, advisory boards, and agencies have their attorney, engineer, accountant, or technical advisor present at meetings. These advisory people may interject pertinent comments to clarify the position being presented by any party. The most compelling reason to have such a person available to the Boards is to be able to impose an impartial response to material presented which may be beyond the scope of any member’s purview, education, training, experience, knowledge or area of expertise. It might help clarify the “official” position being presented by the testifier.
Further to this Board makeup question, we feel that consideration should be given to having specific educational and experience requirements for an enlarged Board. For instance, a five member Board might consist of someone from the real estate field, another from the construction industry, architectural or engineering area, another from commercial business, and another from agriculture and a fifth from any other field of endeavor. Such a makeup would be consistent with Boards we are associated with like our own Professional Engineers and Land Surveyor’s Boards where engineers from several disciplines (i.e. Civil, electrical, environmental, mechanical, sanitary, structural, etc) plus a non-registered ordinary citizen sitting in judgment of engineer licensing and disciplinary matters. To preclude placing members in a possible position of potential conflict of interest while hearing appeals, members should be required to be retired or currently inactive in the field they would represent.
We have witnessed assessors being allowed to remain in conversation related to an appeal with Board members following the apparent hearing conclusion and departure of a taxpayer. This is contrary to all legal procedures we are familiar with. We understand a former PTAAB Administrator has addressed this matter to all Board members but we have seen the practice still in practice in some jurisdictions.
On numerous occasions we have been advised that contrary to the item clearly published in the “State of Maryland Rules of the Property Tax Assessment Appeal Boards” brochure wherein it is stated” (2) Exhibits such as maps, plats, photographs, and comparable sales are encouraged and permitted”, we have had such materials summarily rejected by one Board. The PTAAB Administrator has apparently addressed this matter with the Board in question, since our latest presentations were accepted. However, we understand they were promptly discarded and no records are kept. At our meeting with Delegate Sossi, we were enlightened by the Administrator’s revelation that since we were obviously experiencing personal animosity problems with one of our current assessors that we could request a “peer” review of our disputed case by an assessor from another jurisdiction.
Similarly, another Board from outside the area of the property in question could address dissatisfaction with conditions and/or personnel at the PTAAB level through a hearing. When we requested such a peer review, our request was denied. Assistant Attorney General David Lyon representing the Department of Assessments and Taxation informed us that such rights are not available to the taxpayer. We learned from the former PTAAB Administrator that he, at his discretion, routinely allowed such alternate assessor and site reviews to be conducted. We question why this right is not allowed and why if allowed the information is not made widely public by inclusion in the aforementioned rules brochure handed out to taxpayers when filing for a PTAAB appeal along with the procedures necessary to effect such a change in hearing venue. If the taxpayer were to investigate those options to learn more about the areas and personnel available, the aforementioned biographical sketches of the Boards members could become invaluable in making the selection for a relocated hearing in adjacent jurisdictions. It should be noted that the State’s “Property Owner’s Bill of Rights” lists the following as one of the taxpayer’s rights – i.e. “To be provided with the option of an assessment office, alternate site, evening, or Saturday assessment appeal hearing” To this layman, that clearly seems to allow alternate site or assessor or Board locations to be requested and used.
Like most agencies and businesses, the State assumes that everyone has Internet access and therefore all contact is directed to an Internet address. Nothing could be further from the truth since current statistics indicate that over 50% of computer owners do not subscribe to an Internet service. It is therefore imperative that a postal mailing address and a telephone number, both toll free and TDY accessible, be displayed on agency documents such as the aforementioned brochure to enable the taxpayer to utilize the postal or telephone system to contact the agency, Administrator or staff. This address exclusion has been explained as being omitted due to apparent frequent address changes for this agency. Over-stamping, reprinting, or insertion of an addenda flyer could easily overcome this lack of information.
This is one of the most serious roots of the State’s flawed system. The taxpayer is faced with dealing with persons of limited education and experience. When faced with a court appearance to refute assessments set by these individuals, the taxpayer is often forced into hiring a licensed Real Estate Appraiser at considerable expense to evaluate his property to prove the assessor to be in error. By comparison, the State employed assessor today only needs a combination of college education in any field and 4 years experience to qualify for entry level assessor’s position while the licensed appraiser must have at least 90 to 180 classroom hours with specified courses approved by the Maryland Real Estate Appraisers Commission and 2000 to 3000 hours of appraisal work experience over a required time period of 24 to 30 months and pass a written examination before becoming licensed and being allowed to work as a qualified licensed appraiser. While the State employee can substitute hours worked for education experience, the licensed appraiser cannot in the qualification process. Unfortunately, many career assessors entered the field years ago when only a high school or GED education was required and they are still on the job working without meeting any continuing education requirements. A blatant example of how such limited education plays out surfaced in one of our appeals. Our, new to the scene, assessor deleted some 40-year old longstanding value property adjustments “because they totaled 100%”. She failed to understand her own system that MULTIPLIES not ADDS adjustments. During testimony, under oath, when asked if she were to shop at a store offering a 50% plus 50% sale would she expect to get the merchandise free?
Her answer was “Yes, that’s 100%”. The PTAAB board up held her logic and assessments thereby doubling our assessment and requiring us to go to Tax Court where, thankfully, the Judge understood simple arithmetic and reversed her and the Board.
We are continually astonished that the taxpayer is placed in the untenable position, and almost required to hire a licensed appraiser when pursuing an appeal to the Tax Court level in order to receive creditable recognition of the taxpayer’s evaluation of his property. The qualifications of the licensed individual far exceed the qualifications of the State’s assessment personnel. We liken our argument to the condition in our engineering/surveying profession where governmental agencies routinely employed non-registered engineering personnel in agencies like public works to review, comment upon, and approve the works of registered professionals. Our Boards ultimately were successful in obtaining legislation that now generally requires at least supervisory personnel in such roles to be registered engineers/surveyors just as the plan submitting, approval-seeking engineer/surveyor is required to be. This is a no-brainer situation where the State needs to upgrade the quality of its personnel to provide the taxpayer with better quality work and service and place their personnel on equal professional status with the appraisers who may be challenging them for a taxpayer. Many professions today, like this writer’s, require continuing education programs to improve and maintain proficiency. Why not require the same of assessors? One assessor constantly reminds us that he has “24 years of experience”; to which we reply that he has “one year’s experience, 24 times!!” since he has not improved his educational status nor has he performed any work different from any of his past years.
Assessors are testifying far beyond the scope of their expertise and with total acceptance by reviewing authorities such as supervisors, PTAAB boards and Tax Court simply because these individuals are viewed as “authority figures”. When challenged in such instances we have found the Tax Court to dismiss some of the testimony of such assessors. This does not happen when they testify before PTAAB boards.
Similarly, the qualifications of PTAAB board members are unknown to the taxpayer. Their backgrounds and qualifications should be public information published and distributed to the taxpayer upon appeal of his property. These appointed citizens may or may not have enough knowledge to render proper decisions regarding fair market value. Appeals we have observed that resulted in the Board questioning or disagreeing with the assessors resulted in the Board remanding the case back to the assessment office for re-evaluation. This places the decision-making process right back to the same individual that created the need for the appeal in the first place. If the Board were perhaps increased in size and constituted of designated members with specific backgrounds from construction, economics, real estate, engineering, business, agriculture, and the general public, then decisions could be rendered by said Board much like the Tax Court does without remand to the assessment office.
As mentioned before, comparables specifically ruled as being not comparable have been presented to a lay Board by assessors when those assessors were part of the Court hearing and knew the Court ruling. The assessor appears not to have learned from the experience and the Board allows said comparables to be entered into evidence for their consideration. This makes one wonder how much the Board really understands the process.
When technical evidence is presented and simple explanations are offered, the Boards’ questions often lead to the obvious conclusion that they do not understand one iota of the material presented. Two recent examples come from our experiences. One of our properties is restricted by COMAR regulations regarding specific distances from property lines, streams, and buildings, in the placement of on-site water and sewage disposal systems. Said restrictions limit available land for both utilities to a remaining space 9-feet by 12-feet. When it was explained that a septic tank is about 7-feet by 11-feet, and therefore the available space would almost be totally occupied by said tank thereby precluding any available space for a well or the required 75,000 square foot disposal area, members of the Board failed to understand these simple facts or the regulations that govern these facts. They also failed to understand that 75,000 square feet of land is not available for sewage disposal on a lot that is only 11,500 square feet in area. We know this because at least one Board member in a later part of our presentation pointed to the small 9 by 12 available area and asked “Why can’t you build the systems right here?” Still another Board member questioned our comparison of State provided comparable property values of properties ranging in size from 10,000 to 31,000 square feet in size bracketing our 26,000 square foot parcel. We had equated all of the properties to a common denominator square foot value. The Board president kept arguing that a large parcel of say 100 acres (his words) would influence the square foot price radically. We agreed with him trying to convince him that the comparisons being made were limited to properties of size equal to the subject.
He never did understand. We feel that a more diversified Board would be likely to explain such matters during their deliberations or if they had a technical advisor assigned to assist them in their decision making process.
Similarly, when we questioned our assessment values of $50/square foot and the State’s inability to show one “comparable” sale of that value no one seemed to understand that fact, but blithely accepted the “authority figure” assessors statement that “that’s what we think it’s worth. In other words, don’t confuse me with facts.
We have found this issue to be especially divisive and personal, bordering on being vindictive.
We have been denied access to our assessor several times. We have had requested assessment worksheets held up for days and weeks (over 5 weeks in one case) “while being edited” on the pretext of assuring that they were being reviewed for “completeness”. The same scrutiny does not exist if one makes a personal visit to a local office and requests worksheet copies. They are usually printed immediately, a fee is sometimes paid, and the taxpayer walks out worksheets in hand. No “editing”, no review, no hassle, no delay!!
Our latest Tax Court appeal resulted in a reversal of earlier PTAAB hearings. We were therefore entitled to an adjustment in previously paid taxes. Months after our Tax Court hearing, we were issued refund checks, which we believed to be incorrect, more than we were entitled to. Months since the Court ruling and numerous discussions with the assessment office, several letters and in person discussions with the assessor and County Treasurer, we still do not have a complete explanation or derivation of the refunds. We are convinced that the Kent County Assessment Office has purposely delayed action on this matter probably because they think we feel the refund is too low.
The exact opposite is true. We think we were being overpaid. No one will ever convince us that our assessor is not being vindictive given the attitude, the lack of response and manner in which he has approached our past meetings, letter exchanges, assessment changes to our properties as well as comparables we have used and the Tax Court reversal.
For months, we requested specific answers to questions posed during an assessor hearing.
The assessor, who did volunteer to seek answers, could not answer these questions. We are still awaiting said answers. We have posed these questions to two County assessment offices, the Department Director, two-area supervisor Deputy Directors without the courtesy of a reply. At a County PTAAB hearing one of the two Deputy Directors attended our hearing and testified under oath that he had furnished us with a reply “which we would not accept”. We have not received such a reply and when we made that statement during our hearing and requested “another” copy, we were met with dead silence. Following the hearing, we again requested in writing a copy of the supposedly previously sent answer. Years have now passed since the hearing and written request, and we continue to be totally ignored.
UNIFORMITY AND QUALITY CONTROL
We have been informed by one of our assessor’s supervisors that the assessors perform their work unilaterally. The December, 2014 task force report bears out the fact that assessor’s work is unsupervised or checked. The assessor’s results are not reviewed before assessment notices are issued. Thus, each assessor, with caseloads averaging over 18,600, becomes a loose cannon issuing millions of dollars worth of revenue producing assessments without supervision, oversight, or quality control. The aforementioned example of side-by-side identical houses with thousands of dollars difference in assessments/taxes is a perfect example of the State’s lack of uniformity, consistency, and quality control.
OVERSIGHT/OVERHAUL OF THE SYSTEM
We are informed that the Legislature is responsible for oversight of the Department of Assessments and Taxation but we have only seen limited Legislative audits that confirm such oversight is or has been conducted. Contact with members of the previous governor’s staff indicated a willingness to have such an oversight committee or taskforce impaneled but at the same time, they were reluctant to initiate such action, referring us instead to our “legislators” for relief. The assessment system has not been updated nor thoroughly reviewed in years until this limited December, 2014 task force action was almost secretly conducted. There apparently is no impartial taxpayer involvement in any system review and the Legislature is not equipped to spend the time and effort to provide such a check. With recent assessments continually increasing by as much as over 50% but tax rates not being reduced proportionately to adhere to the “constant yield” theory, the taxpayer is left without recourse. Senior citizens on fixed incomes are sometimes being forced to sell old, long held homesteads because of their inability to meet tax obligations. Erroneous assessments go unchallenged for numerous reasons hereinbefore recited, leaving the State with the oftenexpressed opinion that they are “doing a good job”, and getting things “right”. This is far from the truth. We firmly believe a well defined, highly qualified; technical advisory committee would find our assertions sustainable. It therefore seems logical and necessary that such a committee should be empanelled to annually review the assessment regulations, procedures, methodology, and quality control of the system and department personnel. Taxpayers desire nothing less.
In support of this position, our group has for the past twelve years, conducted educational seminars showing fellow property taxpayers who might agree with facts backing our thinking, that property tax assessments are biased, erroneous, inaccurate, non-uniform, unequal, unfair, and subjective, as well as how and why they should appeal said assessments. We regularly furnished factual information via mailings and e-mail about the failings of the assessment system administered for decades by SDAT bureaucrats who robotically, and blindly performed the same tasks without ever heeding the messages sent by the media, the taxpayers, the Department of Legislative Services and the DC based Council on State Taxation that SDAT was continually failing to meet its legislative mandated duties to the 2.2 million property taxpayers of the State. As part of this effort, our task force creation bill was for past twelve years, repeatedly introduced in the General Assembly where it never saw the light of day beyond the control of democratically positioned Budget and Taxation committee Chairs Currie and Kasemeyer or Ways and Means Chair Hixson. These dictatorial chairs failed to give taxpayers their full share of the legislative process by playing both judge and jury controlling the destiny of the bill rather than employing true democracy. Said true democratic actions would have allowed the committee to hear the bill, then act upon it with the thought of judging it on merits such as, its purpose and content, its constitutionality and legality, worthiness and benefit to the State and its taxpayers, and possibility for improvement. Upon passing this muster, a truly democratic committee would then allow such bills to be positively amended if necessary, then passed on the General Assembly, with or without a recommendation for action, but at least allowing ALL of those we help to elect the opportunity to review, consider and further amend, if appropriate, before acting upon the bill. Instead, we taxpayers are saddled with an archaic system controlled by a simple, select, tyrannical few with questionable motivation or intent to serve ALL of the State rather than their own specific interests.
Of increasing concern to us as taxpayers stems from the fact that over the past twelve years our Senator Barry Glassman introduced a version of our task force bill at least 10 times. Delegates McComas, Glass, Impallaria, McDonough, Norman, and Szeliga likewise introduced and supported this bill no less than three to five times each. One would think, even if naively, that even though the bill our legislative supporters introduced was not directly passed, that out of courtesy for the office they hold, if not for their own recognizance and their efforts they put forth for their constituents, that someone either in SDAT, Legislative Services, or some arm of the General Assembly would notify them of the fact that legislation they had introduced, championed, and staunchly supported, was proceeding through some snakelike manner in this buried 2014, Budget bill, SB 172, thus giving them the possible opportunity to participate alone or with the constituents they were attempting to aid.
Unfortunately, as we see with the less than transparent actions of the O’Malley administration and SDAT, this task force was established and conducted in a manner that raises concerns for us as to its overall purpose and intent, comprehensiveness or completeness, effectiveness, fairness, impartiality, objectivity, recommendations, transparency, or future actions and results.
Further to these concerns is the fact that Robert Young, SDAT Director, chaired the committee. Our concerns are further compounded by the fact that of the 17 members and 16 participants the selection is obviously handpicked to render a final report tailored to a preset answer.
Of the 33 members contributing to this report, 7 are SDAT employees, one a consultant to SDAT, 8 are local government financial/treasury employees that SDAT Director Young when testifying against us and our bill tells them, this bill will cost them substantially, thus they become prejudiced against any system change. Five members are Baltimore City agency employees, two are members of Municipal Associations, one represents State Information Technology with two in government housing. Three quasi “public” representatives are listed as CPA, retired Northrop Grumman and just “public”. In twenty years of collecting articles on this subject of assessment problems, we have identified over 300 names of public figures, property tax dissidents, and activists like us who often express opinions about the deteriorating condition of the assessment process and its results thereby finding our names in various media clippings. A sample check of a few of those individuals we know as well as ourselves shows none of those with firsthand experience with the fallacies of the system were ever contacted for possible participation in this slanted study. This is analogous to the fox in the hen house syndrome where we have the SDAT Director who has been often quoted in various media outlets admitting to the failings of his Department under his directorship, probably selecting the members and participants, setting the agenda and controlling the outcome. Thus, he insures his stance, that SDAT “is doing a good job”, will be upheld. Hardly, what any logical person or we might consider a comprehensive, impartial, worthwhile study under such conditions.
Surprisingly, this December, 2014 report confirms lack of staff, numerous errors due to lack of staff, non-performance of physical inspections, inability to collect, maintain, and review current market data, repeated assessment errors, repeated exception and credit errors, outdated equipment and technology, lack of data sharing or cooperation with local governments, lack of supervisory overview or control, lack of uniformity of operations in all offices, and lack of appropriate record keeping or audits to maintain or know the true status of the effectiveness of the Department. In some respects, if we did not know better, we’d say some of it reads astonishing like our own mailings and testimony before the hearing committees. Much of this same report information is staunchly and repeatedly denied and refuted in nine pages of the report by Director Young, as well as in his utterings, media quotes, and testimony against our bills and us, is now, as we see it, arrogantly presented to the Governor and the General Assembly as his departing gesture. To us, it is his admission to what many others and we have been saying for years. True to his defensive form, the Director defiantly defends his actions and positions in the final Q & A pages of the report.
Most astonishing to us is that Director Young probably handpicked, allowed, presided over, and participated with such a sizeable 33-member committee and participants. He and his taxpayer funded/paid lobbyist, in public General Assembly hearings, ridiculed our bills that attempted to provide complete statewide representation on our task force with only one member from each of Maryland’s 24 jurisdictions. They testified that we would “be larger than the Mandel Commission” and that “roll call would take over one half hour to conduct”. It would have been interesting to see how the Director handled each of those enormous tasks, especially with a committee larger than we proposed or either the Budget and Taxation or Ways and Means committees where his snide statements were made.
In summary, while we can agree with many of the report findings and recommendations, it lacks total authenticity since it fails to address the bulk of the problems created and perpetuated by SDAT for decades. While we do not profess to have adequately responded to all report elements that may need addressing nor do we think we have adequately addressed all of the ills of this failed department or the mismanagement of SDAT supervisors and staff, we do firmly believe we have unequivocally shown the magnitude of the flaws to warrant that another completely unencumbered and completely impartial task force should look at the entire problem and address all of its issues in finite detail. We taxpayers deserve nothing less??
Roy Whiteley, Founder