Thursday, January 8, 2009
Catherine Wilson, Bureau Chief
Time to Reassess
On July 1, 2008, the County Board of Legislators requested funding to perform yet another study to reevaluate property taxes within Westchester County, now the highest in the nation. The Board was granted $25,000 for a study on improving assessment practices, including revaluation.
According to a press release from the Board on December 23, “The study group has begun its work. David Jackson, Executive Director
of the Westchester County Tax Commission, is facilitating the wide-ranging and exhaustive discussion on this complex issue with
representatives from the Westchester Assessors Association and the Municipal Officials Association”.
The report from this Commission is due by the end of February, 2009. At the time of the request for this grant, Legislator William Burton,
the Chair of the Board’s Committee on Legislation, noted that “the Committee on Legislation feels that initiating this study will have a positive benefit to our County’s taxpayers by alleviating the differences in evaluating real property”.
Such promises have been made before by the legislators, with no relief to the taxpayers. In his July request Burton admitted that “in 1996, our Board of Legislators approved legislation, which was also supported by the Westchester Municipal Officials Association authorizing
a County-wide system of real property valuation. is required that there was an establishment of a Westchester County revaluation commission that would implement and oversee the real property valuation”.
Almost 13 years later, County taxpayers are still waiting for a change to the current system. Taxpayers are voicing their concerns over their onerous property taxes to local and state representatives. On December 29, Assemblywoman Sandy Galef released the results of a constituent survey she conducted on property tax relief in the 90th New York State Assembly District. According to Galef, her constituents were “overwhelmingly in favor of change, with the vast majority supporting a property tax cap”.
In June 2008, the New York State Commission on Property Tax Relief issued their findings from their study on changes to the current property tax system. Among the solutions the Commission recommended was the establishment of a “tax cap, local overrides to a cap, mandate relief, and circuit breaker legislation”.
Galef ’s survey of County residents showed their preferences (See Chart on Page 2). While Galef ’s legislation seeks to cap the method for calculating property taxes, the County is seeking to reassess the values that local property taxes are based on. County Legislator Ken Jenkins noted the swings in taxes that can result at present from the current system: “A slight increase in county taxes can actually end up as a decrease on a property tax bill for some residents and an increase that varies from minimal to significant for others”.
The Board of Legislators blames the swings on the state’s “equalization rate”. According to the Board, this rate is based on “the relationship
of sample assessments with sales or appraisals in a community. Fluctuations in the real estate market and construction activity, assessment reductions due to appeals, and methodologies that vary from municipality to municipality are factors responsible for producing a wide disparity in assessment results”.
Despite the high rate of taxes and the wide fluctuations in tax evaluations locally, the Board of Legislators acknowledged to the County Executive, Andrew Spano, last July “This survey will be the first step that is in order to ease the undo-burden that our taxpayers
And, although the Board recognized in 1996 that the County property tax system was already dysfunctional they are only just now taking the “first step” to address this system with this study; a first step that won’t even be completed until February, ten months after they initiated the request for this study. How much more evidence do we need to demonstrate County Government’s disregard for the plight of Westchester’s taxpayers? While both the County Board and the New York State Legislature are seeking to address the property tax issues for the long run, at the rate reforms to the system are progressing, to quote the famous economist John Maynard Keynes “in the long run, we’ll all be dead”. How much longer can local residents wait for tax relief?
The problem is not limited to local homeowners. Commercial property owners face an even higher burden for property taxes since in many municipalities commercial property is assessed at a higher rate than residential property.
One tactic that both commercial and residential property owners use to reduce their tax burden is to challenge the value of their property on local tax records through a process known as a property tax grievance. According to a report in Real Estate New York, this grievance process is fraught with errors and delays. This report outlines the steps in a property tax grievance:
The first step in an assessment review is administrative, generally performed by local assessment boards with no professional staff. Typically they meet for a short-term grievance period. These boards are often deferential to the Assessor and generally lack the expertise to review properties other than homes.
The next step is judicial review. Tax review is generally a part-time assignment for a single judge and this is a major source of delay. Judges also often lack valuation expertise and in many cases they do not set or enforce scheduling orders or deadlines. Attorneys, mostly for municipalities, thus get repeated adjournments and cases do not quickly settle.
Tax review cases are won by proving both the value of a property and the ratio of the assessment to full value. Few assessors assess at 100%
of market value. Most assessment ratios in Westchester County are under three percent. Even a small difference in ratio can make a big difference in obtaining assessment reductions. Compounding the problem, the current system for property evaluation uses the “comparable sales” technique, which has been replacing the “replacement cost” technique. According to the Property Rights Foundation “the comparable
sales technique can only work when properties are extremely similar and are located in extremely similar situations, but, lacking statistically
significant samples, assessors are forced to apply subjective judgment to use a minimal number of sample properties that have just a few similarities to the property being assessed”. In comparison, replacement cost calculations are based on a piece by piece analysis of the construction of the residence or commercial property.
The Foundation warns that, when challenging property tax assessments, “the taxpayer has no right to view the assessor’s selection of comparable sales, because these are considered the assessor’s work product, exempt from the state Freedom of Information Law or from access during assessment appeals!”
The Foundation correctly notes, however, that assessments merely distribute taxes, they do not increase taxes overall. Tax dollars needed
and not collected through property taxes will simply be collected elsewhere. Therefore any relief local taxpayers obtain from lower tax valuations, may eventually be offset by increases in higher income taxes and local sales taxes as the state and municipalities struggle to replenish their drop in property tax revenues from lower property tax values.
Yet despite the problems in the grievance process, for many local taxpayers, it is the only method they have available to alleviate their tax burden. But once again, taxpayers have to wait months for relief. Many local municipalities list their grievance dates and procedures on their website. North Castle lists the following critical dates for taxpayers seeking to challenge their property taxes:
Important Assessment Dates
Taxable Status Date: June 1st
Tentative Completion of Roll: June 1st
Grievance Day: 3rd Tuesday of June
Final Filing of Roll: September 15th
Taxable Status Date: The particular date on which the taxable status of real property must be determined according to its condition and ownership. An improvement added after taxable status date is not assessable until the following year; one added before is subject to current year assessment and taxation Tentative Assessment Roll: The assessor completes, certifies, and files a roll containing proposed assessed
values for each property in the assessing unit.
Grievance Day: The Board of Assessment Review meets to hear assessment complaints. This is the last day property owners may file a
formal complaint seeking a reduction in their tentative assessments. Anyone can examine the assessment roll and property records during
business hours at the Assessor’s Office, 17 Bedford Road, Armonk, New York. However, between Taxable Status Day and Grievance Day
it should be done by appointment.
It is up to individual property owners to monitor their own assessments. Taxpayers who feel they are not being fairly assessed should
meet with the assessor before the tentative assessment roll is established. The assessor can be contacted at 273-3324 or by e-mail at
email@example.com. The assessor will explain how the assessment was determined and the rationale behind it.
North Castle also reminds their residents of the property tax exemptions they may apply for:
Alternative Veterans Exemption
Basic/Enhanced Star Exemption
Cold War Veterans Exemption
Neighbor Notification Order Form
Non Profit Organization Exemption
Senior Citizen Exemption
Volunteer Firefighter & Ambulance Worker Exemption
However, as many property tax reform advocates have noted, property tax studies, reassessments, grievances, and exemptions are merely stop-gap methods that do little to alleviate the real reason why local taxes are so high. At a conference for “Reforming New York’s Property Tax”, the “New York Matters” organization bluntly noted: “Why are property taxes going up? Because spending is going up!” Robert Ward of the Public Policy Institute noted at this conference last year: “We have a spending problem here in New York, and that’s why we have a property tax problem.”
Ward reported at this conference that local government employment in New York State rose 12.6 percent in the last decade though the overall
population was up just 4 percent. School staffing increased 21 percent though student enrollment was up just 5 percent. Putting that in a national context, Ward noted that New York has about 57 local government workers for every 1,000 residents, while the national number is 49.
Ward recommended, “Spending needs to be brought in line through trimming pension and health benefits, and considering whether we
truly need all the government workers we have.”
The Guardian noted last month the significant discrepancies in benefits between government workers and other local employees. The time
has come for local residents to demand concessions from those unions which are unfairly burdening our local budgets for unrealistic and unfair
benefits. In this economic climate, local residents need a reduction in their taxes to survive – simply holding taxes at their current levels is not
good enough. It’s time for our local governments and government employees to cut back. Governor Paterson has already taken a step in the
right direction when he proposed the following concessions from state government workers in his 2009 budget for New York State:
Increasing the minimum retirement age from 55 to 62;
Requiring a 3% contribution from government employees to their pensions;
Prolonging the automatic pension step up at 20 years of service to 25 years;
Requiring a minimum of 10 years of public service to collect a pension, currently 5 years;
Eliminating overtime pay from pension benefit calculations.
These proposals, while still far more generous than the private sector, are necessary to lower the state budget and the tax burdens on state
residents. It’s time for the county and local municipalities to follow suit. Instead of wasting time and money on more studies, the County
Board of Legislators and our local communities should be spending their time negotiating concessions from the government employees.
Reassessing property values merely redistributes the problem. Eliminating or reducing bloated government benefits, eliminates it.