Guilderland unsuccessful in appealing new state-set equalization rate

— Grab shot of webcast of New York State Office of Real Property Tax Services Board hearing

“There’s a disconnect,” Laurence Farbstein, president of  Industrial & Utility Valuation Consultants, representing Guilderland, tells the New York State Office of Real Property Tax Services at its Aug. 23 hearing.

GUILDERLAND — Guilderland’s assessor, Karen VanWagenen, says she will decide by the end of the year whether to recommend to the town board a town-wide reassessment of properties.

The town recently challenged its state-set equalization rate, arguing before the New York State Office of Real Property Tax Services Board that the state’s system is flawed both because it merely samples  values and it does not look at a county in its entirety, which creates disruptions in communities.

Guilderland, which used to conduct such revaluation every four or five years since moving to full-value assessment in 1980, hasn’t done so since 2005.

“There’s no state law requiring revaluation at certain intervals,” James Gazzale, a spokesman for the Office of Real Property Tax Services, told The Enterprise this week; he noted that most states do require municipalities to conduct reassessments. New York has no enforcement mechanism for forcing municipalities with skewed tax rolls to reassess.

“We encourage municipalities to conduct reassessments frequently,” he said. He declined to say how often that should be.

Last year, former spokesman Geoffrey Gloak, who is now doing outreach for the Office of Real Property Tax Services, had told The Enterprise, “The national and international standards say there should be full review once every six years. In the interim  years, you adjust based on statistical analysis of real-estate market changes.”

The state encourages reassessment by paying up to $5 per parcel if a municipality agrees to revalue once every four years. The Aid for Cyclical Reassessments program is allotted $750,000 each year.

This year, the state set Guilderland’s equalization rate at 75.58 percent, a marked change from last year’s 88 percent. The rate is meant to equalize taxes among municipalities so that, for example, with county taxes, if someone owns a house worth $100,000 in the city of Albany, that person will pay the same amount of Albany County taxes as a person who owns a $100,000 house in Guilderland.

Albany just completed a city-wide revaluation so $100,000 is both the assessed and full-market value for that house in the city. In Guilderland, that house with a full-market value of $100,000 had an assessed value of $88,000 in 2016 and, in 2017, will have an assessed value of $75,580.

While Guilderland hasn’t reassessed for 12 years, the town of Westerlo, for example, hasn’t reassessed in decades. The state-set equalization rate for Westerlo is less than 1 percent of full-market value.

The shift in equalization rates affects not only county taxes but any taxes where different municipalities are involved. The Voorheesville Central School District, for instance, covers property primarily in the town of New Scotland but also in Guilderland and a bit in Berne. About three-quarters of the district’s tax levy comes from New Scotland and about one-quarter from Guilderland while only about 1 percent of the levy comes from Berne properties.

Because of the shift in Guilderland’s equalization rates, Guilderland residents in the Voorheesville School District will see their school taxes for 2017-18 increase nearly 12 percent. At the same time, taxes for New Scotland residents will decrease about 2 percent; Berne rates will decrease about 4 percent.

VanWagenen said that, when Guilderland last did a town-wide revaluation, the assessor’s office had a staff of eight and could do the residential properties in-house.

“Now there are only four of us,” she said, naming herself, a clerk and two keyboard specialists. “We can’t do an entire reval on our own. And the state’s not providing much help….Their staff’s been cut by two-thirds.”

Since VanWagenen became Guilderland’s assessor in 2013, she said, the number of grievances heard each year has been steady at about 100. About 10 percent of those result in an adjustment. Typically, about 30 cases are taken to small-claims court each year, she said.


VanWagenen explained how events unfolded this year, leading to the change in Guilderland’s equalization rate.

“Every four years, the state does a sample selection of our commercial properties to come up with a commercial rate,” she said.

Altogether, Guilderland has 12,790 parcels, she said; of those, 10,787 are residential, 415 are commercial, and 105 are agricultural parcels. In addition to the “top three” categories, there are also four industrial parcels, utilities, parklands, water sources, and a number of exempt properties such as for churches and schools, she said.

“The first time through,” VanWagenen went on, “they came up with a very low number … around 53 percent….I found quite a few mistakes.”

She went on, “About the same time, they gave us the residential assessment ratio.” She explained that the ratio is computed from all of the sales for the year compared to what the properties are assessed for.

“I came up with my level of assessment — 85 percent,” she said.

The state’s residential ratio was 84.26 percent. In a normal year, said VanWagenen, if the residential ratio, the uniform percentage, and the equalization rate are within 5 percent of each other, the state goes with the municipality’s figure.

“However, this year,” she said, “when the state did sampling, they came up with a different number because of the commercial sampling, putting it at 75.39 for the equalization rate.”

“I don’t agree with what they set for our commercial rate at all,” she said.

So the town hired statisticians from Industrial & Utility Valuation Consultants of Albany to make its case.

“They had to use the same methods as the state used for the initial sample. They came up with 78.31. It’s still a considerable drop,” she said, comparing it to the 2016 percentage of 88.

“We couldn’t ask for what we believe it should have been because we had to use the exact same method as the state,” said VanWagenen. “They have some circular reasoning that should be taken out.”

At a hearing in July, she said, the overall equalization rate was changed from 75.40 to 75.58.

“They never told us the commercial rate … . We continued on,” she said.

The reason VanWagenen pursued the appeal, she said, was not to prove she was right. “When equalization drops like that, what it does for the next year is it reduces the value of people’s exemptions … I know what it would do to each person,” she said, naming those who get veterans, age, agriculture, and business exemptions.

She went on, “The people that live in Guilderland in other school districts, they’ll pick up a larger percentage. And Guilderland residents will be responsible for a larger percentage of Albany County taxes.”

Becauses Guilderland’s equalization rate wasn’t set until the Aug. 23 hearing, the Guilderland school and library tax bills will be a few days later than usual. Residents will still have a 30-day period, from Sept. 6 to Oct. 5, to pay their bills without the 2-percent late-payment penalty.


At the Aug. 23 hearing , just three members of the state’s Office of Real Property Tax Services Board were present: Chairman Matthew Rand with Scott Becker and Samuel Casella.

The board is supposed to have five members but currently has just three, with two vacancies. Since a majority vote — that is, three of five members — is required for action, all three members of the current board must vote the same way for a resolution to pass.

Asked about the vacancies, Gazzale responded in an email, “There have been four resignations over the last four years, and while two members were recently confirmed, there are still two vacancies left to fill. We are always looking for qualified applicants for these positions, which is at times difficult because it’s not easy to find knowledgeable people who are willing to be on the board.”

Gazzale told The Enterprise the board is “separate and independent” from those who come up with the numbers for equalization rates; the board members are from the state’s Department of Taxation and Finance, he said.

The three-member panel heard arguments from Paul Miller, director of Regional Service for the Office of Real Property Tax Services, and, on behalf of Guilderland, from Laurence Farbstein, president of  Industrial & Utility Valuation Consultants.

Miller told the board that, out of the 985 places surveyed by the state, equalization rates were set at the same level the locality had named in 97 percent of the cases.

Like VanWagenen, he said, if the state’s number is within 5 percent of the locality’s number, the state goes with the local number. He described Guilderland as “a highly desirable suburban community,” and said, with more than 12,000 parcels, Guilderland is much higher than the state average for towns, of about 4,000 parcels.

The state’s sample was made up of five commercial properties: Stuyvesant Plaza, the Hampton Inn, and three large apartment complexes.

Miller conceded only to “a relatively minor change in the value of the property” for the hotel.

Farbstein argued that assessments should be made countywide and that the current system of small, random sampling can lead to inaccuracies.

“There is a disconnect,” Farbstein said.

When regional trends show a 1-percent adjustment factor, he said, it makes no sense that Guilderland’s commercial properties were valued at $935 million in 2015 and $1.26 billion in 2017 — an increase of 35 percent.

“Either the trend bears no relationship to what’s happening in a community or … the selection process..and the way the properties are chosen have skewed the numbers,” Farbstein said.

He told the panel further, “Inequities are built into your rules.”

Farbstein said, “Everyone should be treated on the same basis. That has not happened with cyclical appraisals.”

He concluded by urging “frequent appraisal cycles” be done countywide to “eliminate the overwhelming majority of these types of disruptions.”

During the question period that followed, Casella asked if the process itself were flawed and not fairly executed.

In responding, Miller noted that the town of Guilderland includes Crossgates Mall. He said that, at one time, “20 percent of retail in the Capital District was going through that mall.” Miller said further that, since the owner of that property won’t provide data, “We have to select other property.”

Steve Beals, director of the Valuation Service Data Bureau,  said, “We don’t have the resources to do appraisals every single year. That’s why we do trending. Again, it can cause issues.”

“It seems to me the town made good points about procedural issues,” Becker said. He said those should be looked at next year.

“As far as this year,” he said there was “not enough evidence to rebut staff numbers.”

Casella, picking up on Farbstein’s point, asked of department staff, “How do they explain the difference of 35 percent?” Referring to the two-year increase in Guilderland’s commercial value, he asked, “Where is that disconnect?”

“The state of New York allows individual towns to set their assessment levels,” Miller said. He called this a “nightmare scenario.”

“We have 1,000 jurisdictions. We let them set their own assessments. Most states have a single standard of assessment,” he said, and many fewer separate localities.

“You raised some good points,” Rand said. “Everyone acknowledges it’s a flawed process, but it’s the process we have right now in place and as we look at these particular parcels in question...the numbers arrived at are based on estimates, so it’s hard to judge.

“No one’s got the exact value of any of these properties, so it’s a little bit of a cat-and-mouse game as far as what should the value of those properties be.”

In the end, all three panel members voted for 75.58 as Guilderland’s rate in 2017.

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