Property revaluation: 1,000 standards = no standard at all

Some Guilderland residents will be jolted when they get their school tax bills this month. Those living in the Voorheesville School District, for example, will see a nearly 12-percent hike from last year. New Scotland residents in the same school district will see their taxes decrease by about 2 percent.

How is this possible?

It has nothing to do with school spending but, rather, with how taxes are levied when a state-set equalization rate is applied.

New Scotland has conducted a town-wide reassessment of properties more recently than Guilderland and the value of its properties are closer to full-market value.

Guilderland hasn’t done a town-wide revaluation since 2005.  The town’s assessor, Karen VanWagenen, told us she will decide by the end of the year if she will recommend to the town board a full revaluation. We urge her to do so and, further, we urge the town board to follow through with the recommendation.

We know it’s a tough choice because it is costly. With the 2-percent tax cap, town governments are under pressure not to spend more than that amount. And VanWagenen points out that the last time Guilderland did revaluation, the assessor’s office had a staff of eight and could re-evaluate the residential properties in-house. That staff has been cut in half, to four, making in-house revaluation impossible.

At the same time, VanWagenen notes, the state’s Office of Real Property Tax Services has been cut by two-thirds and so is of little help.

But the problem is much larger than Guilderland; it is statewide. Unlike most states, New York has no law requiring revaluation at certain intervals.

We commend VanWagenen and Guilderland for challenging the huge drop in its equalization rate through an appeals process.

VanWagenen pursued the appeal, she told us, not to prove she was right, but because she cared about not hurting the town’s residents. “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.

In short, the dramatic drop hurts the town’s most vulnerable residents.

VanWagenen 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.”

This sort of chaos and pain could be avoided by needed change at the state level.

We were struck as we watched the Aug. 23 hearing before the state’s Office of Real Property Tax Service Board how each of the three panel members conceded the state’s system was flawed.

In the end, all three had to vote the same way or no resolution could be passed. That’s because the board has just three members instead of the five it should have.

There have been four resignations in the past four years, a spokesman for the Office of Real Property Tax Services told us. The positions are hard to fill, he said, because “it’s not easy to find knowledgeable people who are willing to be on the board.”

This is a sign of a system in distress.

Guilderland was represented at the hearing by Laurence Farbstein, president of Industrial & Utility Valuation Consultants. He argued that assessments should be made countywide and that the current system of small, random sampling can lead to inaccuracies.

Guilderland’s commercial sample this year was based on just five properties: Stuyvesant Plaza, the Hampton Inn, and three apartment complexes.

“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.

In responding for the state, Paul 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.”

To ignore Guilderland’s major commercial center simply because the owners of Crossgates Mall won’t cooperate, clearly highlights the problem: New York needs a state law with enforcement teeth.

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

Beside the problem of no enforcement mechanism, the state needs a common requirement for full-value assessment. Miller said that having New York allow each individual municipality to set its own assessment level was a “nightmare scenario.”

“We have 1,000 jurisdictions,” said Miller. “We let them set their own assessments. Most states have a single standard of assessment.”

“You raised some good points,” said Matthew Rand, referring to Guilderland’s arguments. Rand chaired the board conducting the Aug. 23 hearing and concluded, “Everyone acknowledges it’s a flawed process but it’s the process we have right now in place … 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.”

If the board charged with hearing challenges from municipalities believes the current process is flawed, it is past time for a change.

For decades, we have written on this page, urging towns to move to full-value assessment and to update their rolls regularly. Hilltown residents once burned their tax bills in front of the Knox Town Hall. The Hilltowners were as hot as the flames in their burn barrel. Some were paying more than their fair share and they weren’t going to take it anymore.

The system of taxation in the Hilltowns was badly skewed and there was an uprising when an outside firm was hired to set property values. Farmers were particularly upset that their land was going to be appraised at building-lot prices.

Town hall meetings in Berne and Knox were packed for many months. When election time came, some board members lost their seats.

But some courageous and sensible officials stayed the course. Property revaluation was completed in Berne, Knox, and Rensselaerville. Westerlo, however, has not revalued properties for decades. And, while Guilderland is currently reeling from an equalization rate that dropped from 88 percent to 76 percent, the state-set equalization rate for Westerlo is less than 1 percent of full-market value; this leaves newcomers with an unbelievably unfair tax burden.

After listening to the arguments made by Guilderland at the Aug. 23 hearing — with the points conceded by the very people who run the evaluation system statewide — we can see the big picture. The same sort of common sense and courage that is needed by local officials to fairly value property in their towns is now needed by state leaders.

The state must do away with the “nightmare scenario” and must set a single standard of assessment that is enforced statewide. This will reduce the burden for the state workers who now deal with 1,000 different standards. It will save residents from skewed tax rolls and unequal burdens. It will take the heat off of local officials who, as in Westerlo, have not made the commitment to fairly assess property. In the end, it will guarantee that residents across the state are each paying their fair share of taxes.

— Melissa Hale-Spencer

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