The Fractured State Of Tax Reassessments
Question: When is a 50-acre parcel of open land on one side of the Shekomeko Valley socked with a $6,000 school tax bill while a comparably desirable lot of the same size, located just a few miles away, carries a levy to the same school district of only $2,000?
Answer: When the method used for determining the land’s value is the fractured, arcane and unjust system of property tax assessment practiced in New York State.
Taxpayer outrage and reassessments tend to go hand-in-hand, most recently at the second of two crowded sessions hosted by the North East Town Board where residents last week decried some of the methods used by consultant J.M. Watch in the town’s 2004 reassessment, its first in 18 years. But the main reason many North East property owners have seen their taxes skyrocket is not the consultant’s faulty data collection or contentious methodologies, but because neighboring towns, in particular the adjacent Town of Pine Plains, have chosen—wisely, it appears—not to reassess for many years.
Taxpayers in North East, and in other towns that have reassessed lately, should be turning their ire on Albany legislators to correct a subsidy they are paying on behalf of their neighbors that amounts to several hundred thousand dollars each year.
New York, one of very few states in the union that lacks the legal authority or political will to enact uniform assessment standards for its municipalities, offers a strong financial incentive to towns such as Pine Plains not to bring the taxable value of all properties toward market levels in a consistent way.
Take the 50-acre open parcel cited above, one of several examples we have analyzed. In Pine Plains, which has not revalued its tax rolls since 1987, the town’s assessors last year would have assigned a value to the land of $90,200, based on a simple formula that reflects estimated market values at the time of the 1987 reassessment. The same acreage in the part of North East Town that falls into the Pine Plains School District was assessed at $510,000 by the town’s consultant on last year’s tax roll.
To compute the actual taxes paid to the school district and county which the two towns share, New York State’s Office of Real Property Services (OPRS) assigns to Pine Plains a so-called “equalization rate” meant to offset the rise in market values since the 1987 revaluation and bring the town’s tax base in line with neighboring towns. But even after this adjustment, which roughly doubles the $90,200 taxable value, the landowner would have paid only $2,025 to the school district while his North East neighbor, just across the valley, paid $5,957.
In aggregate, North East properties in the Pine Plains Central School District saw their school taxes rise 69% in 2004, the year after the revaluation, while in the town of Pine Plains, despite the state’s corrective equalization rate, school taxes rose only 3%.
As Table 1 below demonstrates, there was a similar though less dramatic discrepancy between the rise in Dutchess County taxes paid by the two towns. In the case of Webutuck CSD, which also serves North East residents, the extra tax increase from reassessing was modest because all towns with significant property lying in the district have, like North East, revalued in recent years.
TABLE 1
Percent Change in Property Taxes 2004 vs 2003
Pine Plains CSD
Total Pine Plains CSD 3%
Pine Plains Town Taxpayers 1%
North East Town Taxpayers 69%
County Taxes
Total County 12%
Pine Plains Town 9%
North East Town 25%
Webutuck CSD
Total Webutuck CSD 6%
North East Town Taxpayers 10%
With New York State unwilling to require towns to adopt uniform reassessments in a timely manner, the dilemma remains: whether and when to correct the apparent subsidy of Pine Plains taxpayers by their North East neighbors.
Pine Plains Town Supervisor Gregg Pulver acknowledged that his town’s 19-year-old assessment roll may underestimate market values of many properties in his town, and he noted that the town board “has been considering (a full-scale reassessment) for a couple of years.”
“We need to put everybody on the same page,” echoed Jim Mara, Interim Chairman of the Pine Plains Town Board of Assessors. “Even if the reassessment methods we use are not perfect, there is a consistency of error with the techniques used in other towns…The only answer is to get the revaluation done sooner than later, to do it as accurately as possible, even with an imperfect system, and to update it each year.”
School and county taxes paid by the two towns “should equal out in the long run,” Supervisor Pulver added. But “in the long run”– to paraphrase one famed investor– some of us can end up a whole lot poorer. And you can’t blame Pine Plains officials or the town’s taxpayers for wanting to wait it out in the meantime.
(For more on the reassessmnet issue, see the “Views From Gallatin” column entitled The Real Problem With Reassessments- Part One.)
Comments
Please leave a comment...