The property tax re-evaluations are out. Land owners are seeing increases in their assessed value of five to 10 times the 2005 value. The 2006 bills are not yet out. The legislature must act quickly to prevent unaffordable increases, lest people on fixed incomes be forced from their homes.
In 2005, my senate office held a series of town meetings on property taxes. We knew that the skyrocketing land prices on St. John spelled impending doom for stable St. Johnians. Delegate Christensen has successfully repealed the offending 1936 federal law that prevented the V.I. from taking control of our own land taxation system, so now we have the ability to act.
Here are the principles that we agreed in 2005 should guide the enactment of new land taxation legislation:
2) No one should ever be forced from their land due to taxes that rise much faster than inflation.
3) St. John should remain a diverse community, with all ethnicities, races, age groups, occupations, and income levels.
4) People should be assessed and taxed according to uniform and consistent methods; everyone should be able to see the rules by which their assessment is calculated.
We are horribly threatened by the move to tax every parcel at its maximal economic value, while ignoring the maximal social value. At my town meetings, St. Johnians were very clear on what kind of Virgin Islands they wanted, and you can see it in the four principles above. St. John welcomes progress, but does not want to sell out and become a rich-man’s resort island of for-rent villas. St. John wishes to remain a diverse community, with all ethnicities, age groups, occupations, and income levels.
Land for agriculture and land that is kept as green space has great social value. It should be taxed at a lower rate than commercial and residential land. If there is no tax break for agriculture and green space, the owners will be forced to sell out to developers. That may be the highest economic use, but is it the highest social use? My fellow Virgin Islanders, if we chase the almighty dollar to the exclusion of all else, we will not recognize the Virgin Islands 15 years from now.
The legislators have a serious task ahead of them. It cannot be fixed by merely adjusting the millage rate. Why not? Because persons on a fixed income in a stable situation will be nonetheless taxed out of their homes. How? If they have had the “misfortune” of having a hotel or mansion built next to them. Or if they have lived on the beach for donkey years. Or if they have a great water view from their property. Or if their house is now in a business district.
On St. John, any of these factors will cause the assessed value to be so high, that the owner will receive a tax bill that is five to 10 times higher than they are used to paying. They will be literally taxed out of their home. (With the assessed value very high, they may not be able to afford the taxes, but they can sell out for millions of dollars and move to Boca Raton. The culture will be obliterated, but ex-pat former St. Johnians will have money in their pocket. Is this the kind of Virgin Islands we want?)
We are not alone, as California, Florida, Vermont, and other states have all had to grapple with this problem. Some of the solutions they found could guide us in the V.I. as we choose our own solution.
But it is sure that unless the legislature acts, we are going to see people ejected from their homes, first on St. John, then St. Thomas, then St. Croix.
Note: Principle # 1 was that we should follow the laws of our territory and country, and change them if necessary. This is self-evident, so I started the list with #2.
Senator at Large in the 26th Legislature