While Westchester”™s business community has been clamoring for property tax reform in Albany, a measure that nearly became law 15 years ago has been introduced in the state Assembly that could radically alter the county”™s outdated property assessment system.
As the business community remains hopeful Gov. Andrew Cuomo can fulfill his campaign promise and impose an annual 2 percent property tax cap, one can expect most major business organizations in Westchester will not embrace the property revaluation plan put forth by state Assemblyman Thomas Abinanti, D-Greenburgh, to have the county spearhead a full-value reassessment of all properties here within the next three years.
A provision of the bill that will likely be opposed by some Westchester companies involves allowing municipalities to tax commercial properties at a higher rate ”“ 125 percent ”“ than residential and multifamily properties. In addition, a municipality could impose a homeowner protection factor and tax commercial properties at higher than the 125 percent rate if the revaluation causes a shift in the tax burden from commercial to residential.
The legislation is a revised version of a bill proposed by then state Assemblyman Richard Brodsky, D-Greenburgh, and state Sen. Nicholas Spano, R-Yonkers, in 1996. It passed both the Assembly and the Senate, only to be vetoed by Gov. George Pataki who was swayed by last-minute lobbying efforts by the county”™s business community, including IBM and PepsiCo.
The 1996 bill was endorsed by the Westchester Municipal Officials Association and by a home rule resolution that was passed by the Westchester County Board of Legislators. Abinanti, who led the home rule resolution as a member of the board 15 years ago, said his bill would also require a home rule resolution be enacted and sent to the state Legislature.
Reforming assessment practices
Abinanti has also re-introduced a controversial bill that drew the ire of business groups in 2009 that would change how courts value commercial properties in tax certiorari cases.
The bill would set a commercial ratio for assessing a property”™s value rather than utilizing the state equalization rate, which is set each year and is based on the weighted value of residential, commercial and vacant properties in the county.
The original bill was sponsored by then Assemblyman Adam Bradley and state Sen. Suzi Oppenheimer.
Abinanti said the two bills “go hand in hand” and are aimed at reforming Westchester”™s property tax assessment practices to ensure fair assessments and protect homeowners from paying more property taxes that result from “the continual erosion of the tax base from unwarranted tax refunds and assessment reductions.”
According to county estimates, Westchester has been paying some $10 million a year in property tax refunds based on faulty assessments. In 2009, more than $55 million in refunds were paid out by all taxing districts in the county. Approximately 90 percent of those refunds went to commercial property owners.
He added that he has addressed some of the concerns raised by Pataki 15 years ago by shifting some of the responsibilities in the revaluation process from county to local control and changing provisions in the assessment appeals process.
Pataki in his veto message delivered in October 1996 said the revaluation bill “would have profound and perhaps devastating effects on local economies, because of the onerous tax burden it imposes on local businesses.” He later stated, “This bill would challenge the ability of small businesses throughout the county to keep their doors open and would codify serious inequities in the tax rates.”
Assemblyman”™s bill ”˜premature”™
Abinanti said his revised bill “allows the county of Westchester to do a countywide revaluation ”“ to have the county retain the experts and ensure that all properties are assessed according to the same standards.”
The local assessors would then have the information in order to conduct a reassessment of the properties in the municipality.
He did not have a cost estimate on countywide revaluation but said it would be paid for by the county with some state aid. In 1996, estimates put revaluation at $25 million.
Abinanti”™s bill comes as Westchester is in the midst of a campaign spearheaded by Board of Legislators Chairman Ken Jenkins to address its outdated tax assessment system. However, that effort is on a slower track and is looking to foster cooperation with municipalities to voluntarily update their assessment rolls. Abinanti”™s bill seeks to “incentivize” municipal assessors to participate.
Jenkins said he is not against Abinanti”™s bill, but called it “premature.”
Abinanti said that while the county”™s initiative is a good first step and “is a softer, gentler approach,” he is “just impatient. We have been discussing this for 20 years.”
The bills currently do not have co-sponsors. Abinanti admitted he does not expect the revaluation or the commercial ratio bill to pass in their current forms. “I have put these in for the purposes of getting the conversation going,” he said.
A ”˜burden”™ to business
The Business Council of Westchester and the Westchester County Association say they are studying the Abinanti revaluation bill but have not taken a position yet.
On his commercial ratio proposal, Marsha Gordon, president and CEO of the Business Council said, “We oppose this legislation because it will put Westchester at a competitive disadvantage with neighboring counties because of the higher real estate taxes that commercial property owners will have to pay. Higher taxes mean higher rents for tenants and another incentive to move out of Westchester.
“This bill sends the wrong message to businesses and is contrary to Gov. Cuomo”™s goal of achieving a balanced budget without raising taxes.”
The County Association is planning a series of meetings with assessors, municipal officials and other business leaders regarding Abinanti”™s bill as well as the efforts by the county government to bring uniformity to property assessments.
Bill Mooney, president of the association, said it opposes the commercial ratio bill “because it is a burden to the business community.”
He added that the association believes legislation is only a “band-aid” to solving the issues surrounding property valuations and recently urged Abinanti to withdraw the bill.
The Westchester Putnam Association of Realtors”™ position has not changed since 1996 when it favored full-value revaluation, although it has concerns over the classification of properties provision.
CEO P. Gilbert Mercurio said WPAR remains in favor of revaluation and considers the classification system “a necessary evil” in order to prevent possible massive tax shifts from one class to another that might be caused by the revaluation process.
