For 40 years, Island voters have been generous with the tax dollars of non-voting property owners. We have merrily spent our way through astonishing population growth - in season and out - through building booms, national recessions, and you-name-the-economic-bubble, deploring each of these phenomena along the way. We have hobbled growth as we could with regulation and reach-back-in-time planning, all the while banking the untaxed conservation lands. And, skeptical as we are about these wealthy part-timers, Islanders have kindly permitted the summer residents to fund the collection of non-profits on which we all depend (but don't do enough to support) and to build us a vast and opulent hospital.
The costs of living, of educating children, of doing business, and of housing have risen sharply over these eventful four decades. So that today, although year-round Islanders get their many superb municipal and regional services at 50 cents on the dollar, thanks to the summer residents and their high-priced spreads - which we also deplore - there is a spreading querulousness within and among the towns over town budgets, real estate assessments, tax bills, and the apportionment of costs for regional services. Consider the disunion in the Up-Island Regional School District over whether one town pays unfairly too much, and the similar disagreement over how the towns should share the costs of the regional high school district, and the increasing acrimony over changes in assessed value, most recently in West Tisbury.
The assessed real estate values in the six Vineyard towns for fiscal 2007 added up to about $18 billion, up about $5 billion compared with 2003. Edgartown, worth $6.25 billion, is the richest town, but it was worth $6.4 billion a year earlier. Chilmark is next, at $2.9 billion, up about half a billion since fiscal 2006. West Tisbury, $2.45 billion; Oak Bluffs, $2.8 billion; Tisbury, $2.7 billion; and Aquinnah, $560 million, follow. (The numbers include only properties valued above $40,000.)
These numbers and the rates at which they have grown, not just in the last few years but since the Vineyard real estate boom began in the 1970s, are glorious, if you look at it one way. Looked at another way, not so much.
If you own property here, the asset side of your family balance sheet has sharply improved. That's partly because voters have spent so complacently on schools, conservation, and regulation, all of which supports and inspires real estate values. It's also because the Vineyard is a lovely place to summer, and within reach of the East Coast megalopolis. Still, put down the balance sheet and take up the household profit and loss statement, and you will find impressive growth in the annual real estate tax bill, for everyday Islanders, including those who've found themselves in possession of a seaside estate that they didn't buy and can't afford. If your earning power has not kept pace with the growth of your real estate tax liability, there may be some difficult choices looming. It's irritating to find that your family house overlooking the great pond is worth millions and taxed just as though it is. You may need to rent it, or even sell it. And, in the end, the IRS may play the tune, forcing you to pay the piper. Of course, you might put it under permanent conservation restriction of some sort, but that would undermine the handsome asset value that is so infuriating at the moment but might be nice to tap in old age, or when the kids' college loans come due.
Vineyard real estate values are the basic building blocks of financial life here. They underpin the decisions made several times a year by voters at annual and special town meetings on spending questions concerning education, law enforcement, and environmental, social, and municipal services. And, of course, the spending decisions at town meetings are the chief influences on how your tax bill grows, not the growth of value of your real estate nest egg.
How much a town's real estate is worth is also a measure of its borrowing ability, and that means whether a new school, police station, or town hall can be financed. Sadly, taxpayers, including modest income Islanders and older Islanders, as well as well-financed, part-time property owners, must repay what they borrow.
While real estate values are at the heart of property ownership, the Island's largest industry, they are a puzzle for our neighbors, the assessors. Less than $1 billion of Vineyard real estate changes hands in arm's length transactions each year. Though they do their sawdust best deciding what your house is worth for tax purposes, town assessors often don't have much to work with. So, these values may be more art than science. They are derived by examination and re-examination of sales prices, as they are revealed in house and property transactions recorded at the registry. Comparable values, together with measurements of square footage of house and property and quality of finish materials and workmanship, are used to estimate value. But sales are few. Some neighborhoods record no sales at all in a year. And, if only about five percent of real estate value changes hands each year in perhaps 1,000 transactions, changes in assessed value, however carefully developed, rest upon a narrow base. Besides, if what smitten buyers pay for their dream properties is at the root of the calculation, then it is indeed an artful calculation.
Despite the villainy with which they have been recently charged by viciously irritated property owners dismayed at the latest updated valuation, it is not the assessors who are responsible for the growth in real estate value, the growth in town budgets, or the inability of some property owners to keep up with their inflating tax bills.
The responsible folks are us.