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A Message from the President
William D. Quick, IAO William D. Quick, IAO
President, New York State Assessors' Association
2006 - 2007

 

 

 

 

A NEED FOR REFORM

The following comments were prepared by our Executive Secretary, Thomas Frey. I had the honor of delivering these comments to the Assembly Real Property Tax Committee on April 17, 2007:

"Chairwoman Galef and members of the Assembly Real Property Tax Committee, thank you for allowing me to once again share with you the thoughts and positions of the New York State Assessors’ Association on your legislative proposals concerning the assessment process.

As an overview of why we are all here today, you have to look at the process of real property tax. We have two main components, the local budgets that determine how much money must be raised by the real property tax and the assessments that determine how that tax is to be distributed to each property owner. I can tell you, with a great deal of certainty, that if the amount to be raised by taxes was what it was thirty years ago, we wouldn’t be here today discussing assessments. But that is not the case and even with all the discussion of property tax reform, I don’t expect to see those levels of property tax again.

If there is one thing I can accomplish today, it will be to inform the public that the assessor is not the one that is increasing their tax bills. If every assessment in a municipality is frozen and the budgets are increased, the tax bills will be higher and the assessor didn’t do it. In the reverse, if every assessment went up 10% and the budgets are frozen, the tax bills would not change and the assessor didn’t do that either. Why are the taxpayers screaming about their assessments? Because the tax bill is higher than they can afford and they see no way to get elected officials in the Town, County or School to reduce their spending. The local officials can’t reduce their spending because the State is shifting the burden of services down to the local level. And finally, the taxpayer is demanding more services from local governments that have a cost attached to them.

The taxpayer sees an avenue to reduce their taxes by way of changing their assessment so their share of the total tax is less. The taxpayer can go to their local assessor and try to convince them to reduce their assessment, if that doesn’t work, they can go to the Board of Assessment Review, if that doesn’t work; they can go to Small Claims Assessment Review or Supreme Court. So the taxpayer can get three attempts to reduce their assessment and they can, for the most part, do that every year. How does the taxpayer get the local official to reduce the budget? There is no secondary board to go to; there is no court to appeal to. The only avenue is to not vote for the officials in charge and it will take at least four years to vote on the majority of the board members. The taxpayer doesn’t want to wait that long, so they go after the assessment as the easier path to lower taxes. Of course we all know that if that taxpayer is successful in getting their assessment reduced, then every other taxpayer has to pay more, because the budget didn’t get reduced, the tax burden was only shifted.

The State Legislature is in a tough spot when it comes to property tax. It is a local responsibility and the local governments pay the vast majority of the costs to administer it. If you attempt to make changes, you may be accused of State mandates and told to stay out of local government’s domains. However, you are hearing from your constituents about the burdens the property taxes have placed on them and you feel obliged to react. I believe the legislation you have proposed has issues we can support and some we will oppose and in some cases we will oppose legislation as it is currently written, but if some changes are made we will support it. We congratulate you for this attempt to address the property tax issues facing New York and we hope you look to us for input as we try to define what can be accomplished with property tax reform.

You have requested that comments be limited to selected legislation as listed in your notice of public hearing and I would like to address those issues in the order you announced them.

A 127 - Mandates revaluation, reassessment, or update of real property no less than every ten years.

We have long supported some type of mandatory periodic updating of assessments and will support this legislation. We also believe there should be some type of statistical measurement tied to the requirement of reassessment. The legislation as written seems to be missing any consequence associated with not following the law.

S 1054 - (as written in the notice of public hearing) Requiring localities to assess every three years.

The way I have read this proposal, it does not require any assessment every three years. RPTL Section 1573 is a state aid statute and this legislation increases from $5.00 to $15.00 per parcel the state aid available if a municipality undertakes a reassessment every three years. I don’t see where there is any requirement to reassess unless you want the state aid. We do support the increase in state aid for reassessment, since it gives municipalities the option of periodic updating of assessments every three years instead of attempting annual assessment programs.

A 3005 - Creates a Blue Ribbon Commission on property tax reform

The New York State Assessors’ Association supports this legislation. The property tax has taken on an increasing burden to the property owners of New York State over the past twenty years. As State mandates have increased, educational costs have skyrocketed with the local share growing, tax base erosion from new exemptions and the ever shifting of program costs from State levels to local levels; the property tax has become the catch-all for funding these increasing expenses.

This legislation attempts to study five areas of concern: accountability; governance and structure of local governments and school districts; property assessments; spending and tax controls and potential alternative sources of funding to the property tax. The NYSAA agrees that there needs to be a comprehensive study in these areas. We are confident that an unbiased look at the property tax administration in New York can yield informed decisions regarding property tax reform.

As representatives of the New York State Assessors and having members with many years of experience and knowledge, we request that the membership on the blue ribbon commission required in the area of assessment administration be filled with one of our members. We believe that we can benefit this process and bring a grassroots look at real property tax administration as it is being handled with the taxpayers at the local level.

A1572 - Proposes a Constitutional Amendment to require, (1) a single statewide standard of assessment; (2) a uniform three year assessment cycle and (3) county-wide assessment.

The New York State Assessors’ Association opposes this legislation as written. We cannot in good conscience support this proposal, as long as the county-wide assessment requirement remains in the language of this legislation. Although we have long sought a cycle bill and have no objection to a single statewide standard of assessment, the inclusion of county-wide assessment within this proposal, precludes us from supporting it. There is current statute that allows any County to take over the assessment function after an affirmative vote of the electorate. The past history of county-wide referendums concerning the assessment function has shown that the voters do not want to give up the local government’s responsibility to the Counties. The referendums have been defeated overwhelmingly and we feel this clearly indicates the voters’ feelings on such a change.

There has been no study published that confirms any savings to the taxpayers if the assessment responsibility shifts to the County. In fact, there is evidence it would become more costly and at the same time you would lose the convenience of having local assessment officials that are closest to the taxpayers. Wayne County conducted an analysis of cost comparison between the current local assessing function and a County-wide program in 2006. The cost for a County wide program was estimated at $1,117,359 or $25.94 per parcel. The cost currently is $843,724 or $19.59 per parcel.

In today’s Albany, the word consolidation seems to be included in every conversation. Consolidation only works if it makes sense both from an economic viewpoint and from a real world workability viewpoint. Sometimes consolidation comes about naturally. I have done a very unscientific study of our membership. Within our membership we have 483 sole appointed Assessors. Of those Assessors, 143 or 30% are currently assessing in more than one municipality. The assessment administration function is shaking out as municipalities realize it makes more sense to hire a professional assessor that works full time maintaining the assessment roll in multiple jurisdictions. On the other hand, there are 31 Towns and Cities that have more parcels to administer than Schuyler County, Hamilton County and Yates County. You need to look at what is the best model for the assessment function, not just say push it on the County.

The local assessor has become a most important part of local government; they have vast knowledge of their municipality that other departments make use of. In many locations the local assessor is the go-to person for property ownership documents, census information, E911 assistance, local planning history, GIS knowledge and many other areas. They are no longer the person that only develops the assessment roll.

If the desire of the State legislators is to make the assessment process better, we suggest you create statute that requires an assessment cycle with a statewide standard of assessment of 100% and allow the local assessor the opportunity to do their job.

A 1573 - Authorizes assessor to grant certain retroactive non-profit exemptions under certain conditions.

The New York State Assessors’ Association opposes this legislation. This legislation would create an extremely convoluted process to grant a non-profit organization an exemption from property tax that would only shift the burden to the other taxpayers in the municipality. As we talk about the property tax burden increasing on your taxpayers today, please don’t forget that every time you pass legislation creating a new exemption, increasing the benefit an exemption enjoys or bypassing the current laws to grant someone or some group an exemption, all other taxpayers will pay more. The problem that this legislation also creates is a tax shortfall for the taxing jurisdictions. Local governments would have budgeted for a certain amount of funds and then if a non-profit organization purchases a substantial property, this legislation would create a hole in the budget that could only be closed by borrowing money.

A 1574 – Requires market-based assessments on cooperatives and condominiums

We have long sought to remove the inequities that have been created by the restrictions of RPL 339-y and RPTL 581. Although we feel the inclusion of language to grandfather in all assessments for current co-ops and condos, is not what we desire, in the spirit of compromise we will support this legislation. We have recently delivered copies of a power point presentation to every legislator that clearly shows the unfairness of the current laws. When you see pictures of two structures that sell for the same price and one pays $2,500 in taxes and the other pays $4,386, only because of the form of ownership, you can see the law has to change. The reason for this discrepancy is that condominiums are receiving the benefit of the valuation limitation of section 339-y of the RPL, while the single-family home, owned in fee simple, is generally assessed based upon its "market value", forcing the single-family home owner to pay a much greater tax bill than their condominium-owning neighbor. The market place does not give us the type of rental data that is required to assess this type of structure as an income- producing property. They are constructed, marketed and sold for single family home ownership not as investment properties and should be assessed in the same manner as other single-family homes.

I thank you on behalf of the Assessors’ Association for allowing me to comment today and I would be happy to answer any questions you may have."

ADDRESS TO THE ANNUAL CONFERENCE (.pdf)

THE FUTURE IS NOW (.pdf)

A TIME TO REFLECT (.pdf)