Consolidating to save
Taxpayers”™ grievance day is the fourth Tuesday in May and many municipalities across the state may find themselves overwhelmed by property owners who feel their assessments don”™t jibe with the realty of today”™s real estate market.
Victor Mallison, appointed as executive deputy director of the state”™s Office of Real Property Service in January, came to the Greater Southern Dutchess Chamber of Commerce bearing some unhappy statistics: Out of 1,800 counties canvassed across the United States, the top 10 counties bearing the highest property tax burdens are entirely in New York state. Westchester County, with a median property tax levy of $8,404, leads the way, with Rockland a close second at $7,798.
At a breakfast the chamber held on April 7 at Fishkill”™s Holiday Inn, Mallison told guests that the Office of Real Property Taxes is an “obscure but important agency” that sets equalization rates for all the districts in the state.
“Part of the problem,” Mallison says, “is that New York has 1,115 districts, compared to 59 in California and a little over 250 in Texas, which is twice the size of New York.” He emphasized a need to streamline the program to make it easier for the public ”“ and the politicians ”“ to make decisions for the overall good of New Yorkers.
Mallison said Gov. David Paterson”™s proposed 2010-2011 budget attempts to address the ever-rising property taxes in the Empire State, which already has more than one-third of its properties off the tax rolls, including capping local property taxes at 4 percent, as recommended by state Sen. Tom Suozzi”™s Property Tax Commission.
The circuit breaker tax, also proposed by Suozzi”™s commission, is on the Governor”™s agenda, but “will not kick in until there is a surplus in the budget. Unfortunately, the state now has a $9.2 billion deficit, which is projected to grow to nearly $10 billion,” said Mallison. “The deficit has made property tax relief problematic.”
Another initiative in the proposed budget is mandate relief. “Business has been pushing for this for years,” said Mallison. “It would mean no more rules or laws imposed on municipalities or school districts unless there is money provided to pay for them.” Mallison estimates this move would result in $1 billion in savings over the next three years. Additionally, Paterson is proposing a repeal of the Wicks Law for all school districts in his budget.
Malllison turned his attention to the function of his own office, saying, “The assessment function is in one of the worst conditions in the country. New York provides no standards for assessments.”
Pointing to one downstate city, he said, “It has not been assessed since the Civil War.” Inequities in how municipalities conduct assessments are hurting state coffers and often putting undue burden on other property tax owners as a result, said the executive director.
Forty-seven states have a clear evaluation process, said Mallison, but New York is not among them. “This brings us to the discussion whether local government and local autonomy is good for the state. New York is still in the midst of trying to figure it out. We need clear local standards and need to create understandable formulas for New Yorkers.”
Without uniform standards and no set cycle by which properties are assessed, “it leads to a lack of clarity and a lack of equity for the property owner to understand what they owe and if they are actually paying the right amount,” he said.
One-third of property is exempt from property taxes in the state, said Mallison. “If you think about that, perhaps it does not appear to be good public policy, but if we put back all property on the tax rolls, New Yorkers would see an automatic one-third drop in property taxes.”
Mallison said his agency is looking at properties that are claiming exemptions that may not necessarily be entitled to them.
One cost-saving factor will be the merger of the Office of Real Property Tax Service with the Office of Property Tax and Finance, a move that Mallison says will save the state $1 billion immediately. He”™d also like to bring the agency up to 21st century standards, ridding it of four-part written forms and going with electronic filing.
On its own website, orps.state.ny.us, the Real Property Tax Service says New York’s property tax system is notoriously complex and confusing, particularly for taxpayers. Besides being one of three states without a statewide standard of assessing, New York is one of 12 states that doesn’t mandate a reassessment cycle. Meanwhile, it has nearly 700 school districts that crisscross 1,128 assessing units compared with a national median of 85 assessing units.
“Is there hope for homeowners who were reassessed during the height of the housing bubble?” asked Serena Marrero of Abilities First.
“People need to talk to their local officials,” said Mallison. “The time to do that is right now. grievance day is coming up and if a property owner feels they have been overassessed, that is the time to speak up.”