Tuesday, February 13, 2007

Reval Blog

With all the talk about the ongoing town-wide property revaluation it is probably a good time to discuss the issue. I do want everybody to know that this is not a money-making proposition for the Town – the cost of running the Town is the same, reval or no reval (and, as I was thinking the other day while walking my dog – the only way to keep town taxes reasonable is by watching spending and creating a broad commercial and industrial tax base). So, if you look at your tax bill and see that your property is assessed at $100,000 – and the per-thousand tax charge is, say, $16. If, after the reval, the property values go up to 400,000 – the per-thousand tax charge will drop proportionately, in this case to $4.

Now let’s talk assessment stuff – I have learned a lot about property assessment in the last few months. The Town of East Fishkill has not had a town-wide property revaluation since 1972. Wow, that is almost thirty-five years! So, a couple of years ago the Town of East Fishkill joined with other towns and cities in Southern Dutchess to form a consortium of eight municipalities to do this together.

Residential properties are assessed based upon comparable property sales – at market value. There are a few problems with not having town properties assessed at current values. First, it is unfair to some people with newer houses because they are paying more than their fair share of property taxes compared to someone who has not had a recent assessment. So, it is a matter of fairness. But, there is a much larger issue. If your town has not had a current property valuation, the great State of New York through its Office of Real Properties will examine sales in your town and through some formula assign you what is known as an “equalization rate.” In the Town of East Fishkill the Office of Real Properties (or “ORPs”) has assigned us something like a 9.7% equalization rate, which I believe is the lowest in the county. Now this has to do with housing sales records – and there have been many expensive houses sold in our town. This means that ORPs considers every house in our town to be currently valued at 9.7% of true market value. This is not necessarily a bad thing – my house has not been re-assessed since it was built in 1979 so the state has actually made some adjustments to keep my assessment somewhat up-to-date. Still, you cannot say that the assigned equalization rate is accurate for every parcel. But, there is a much larger implication for the low equalization rate that has to do with that 800 pound gorilla of property taxes – the school tax. If you are paying taxes in a district that cuts across town or city lines, such as Arlington or Wappingers Central School Districts, a town with a lower equalization rate will pay a larger portion of taxes than a neighboring town with a higher equalization rate. That is why when, say, Wappingers Central School District announces a 6% tax increase, Fishkill may pay 4%, but we get hit with 8%! This will all go away when we, and the other towns, are valued equally.

Another plus is that senior, disabled, and veteran exemptions that had been pro-rated due to the equalization rate will now be fully valued as well as the STAR and Enhanced STAR programs. Still, until the numbers are in, no one knows what the new assessments will be - and that is the $69,000 question.

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