Total taxes for 2009 (FY10), including the approximately $14.8 M in property taxes assessed by sub-municipalities such as villages and special districts, exceeded $1.43 billion.
Assessment practices in Vermont
There are two widely used measures for evaluating assessment practices in Vermont—the common level of appraisal (CLA) and the coefficient of dispersion (COD). The CLA is the ratio of a municipality’s total grand list value to its corresponding “equalized” value derived through PVR’s equalization study. In other words, it is a percentage that compares local assessments to PVR’s estimate of market value. The statewide CLA continues to improve. For 2009 it was 90%. The result of the 2008 study was 88%--slightly better than the 86% shown in 2007.
Another way to use the CLA to evaluate assessment practices is to consider the change in the number of municipalities that have extremely low CLA’s and are thus very far from Vermont’s statutorily set standard of 100 percent fair market value. The further away from true market value the more difficult it is for property owners to analyze whether their valuation is equitable. In 1981, 41 municipalities were appraising property at less than 30 percent of fair market value. In 2007 there were only 26 districts with a CLA less than 60 percent. The 2009 study shows that
number has dropped to 4 districts.
Towns with a CLA under 80% are ordered to undergo a reappraisal.
In 2007 there were 106
municipalities with CLAs less than 80%. It fell to 82 in 2008. For 2009 it was only 52. About a quarter of towns have a CLA of 100% or greater.
The coefficient of dispersion (COD) is a measure of the equity across assessments in a municipality’s grand list. It is a much better measure of fairness than the CLA. The higher the COD, the more likely it is that similar properties are being assessed at different levels resulting in inequities in assessments within a grand list.
Assessment equity is important in order to meet the equal protection requirements of the Vermont and United States Constitutions. If a town’s grand list shows a common level of appraisal of 90 percent and all properties are assessed relatively close to 90 percent of their market value, there is a high degree of equity and the municipality will have a low COD. Assessment standards generally hold that CODs of 15 percent or less are good—in newer or fairly homogenous areas 10% or less is considered good. If, on the other hand, individual
properties range in not being treated
assessment from 60 to 140 percent of fairly in terms of the resulting tax
market value, then property owners are
uniformity of is close to the
assessments is more important 100% valuation standard.
Extremely low CODs can also raise a red flag. “The objective of ratio studies is to determine appraisal performance for the populations of properties, that is, both sold and unsold parcels. As long as standardized schedules and formulas are used in the valuation process, there is little reason to expect any significant difference in appraisal performance between sold and unsold parcels. If, however, sold parcels are selectively reappraised based on their sales prices or other