The Mamaroneck Town Council has now moved a step closer to community wide property tax revaluation and will be requesting proposals from firms doing this work, Mamaroneck Town Manager Stephen Altieri told a well attended public meeting at the high school library on Tuesday, November 17th. (See: Town Board to Start Hearings on Property Revaluation and Revaluation Still on the Radar.
Mr. Altieri reported the Council believes a full revaluation program is necessary because the present property assessing system is broken. He said that increasing applications for property tax reduction coupled with high legal defense costs deprived the government of badly needed income to pay for residential services and made it all but impossible to plan for future services.
Mr. Altieri’s comments followed a presentation by Lee Kyriacou, executive director of the New York State Office of Real Property Services, the agency that oversees local property tax administration. Mr. Kyriacou characterized the Mamaroneck tax process, based often on 35-year-old assessment figures, as unfair, impossible for many taxpayers to understand, expensive and inefficient.
He gave an example of local tax unfairness. A house on Barnard Road sold for $1,520,000, with an estimated tax of $28,430. A house on Briarcliff Road sold at a slightly higher price of $1,590,000. Its tax was much lower at $19,311.
807 Tax Grievances In 2009
The meeting, hosted jointly by the Larchmont-Mamaroneck League of Women Voters (LWV) and the Local Summit, was held to provide an examination of why there is growing local tax opposition. Nina Recio-Cuddy, co-president of the LWV, was the meeting chairman.
Mr. Altieri said that in 2003 some 232 residents filed for property tax reduction and 46 went on to small claims court in White Plains. The number of grievances has grown since then to 807 in 2009 with 343 going to adjudication in court.
“Some 60 –65% of our budget is funded by property taxes,” Mr. Altieri said. “We are losing revenues through grievance setbacks, and our tax appeal defense costs are going up. This past year we spent $409,000 in tax refunds and defense costs and believe this will go up to $465,000 next year.”
He continued, “The current Town budget provides no increases for services. But there will be a 2.4% increase in total taxes to be raised because of a loss of revenues and reduction in assessments.”
Schools Lost $1,800,000 From Tax Grievances
Meryl Rubinstein, Mamaroneck Schools assistant superintendent for business operations, said that the schools lost $800,000 from tax grievances in 2007, $1.2 million in 2008 and $1.8 million this past year. She added that these shortfalls had to be funded out of operational budgets, which shortchanged educational programs.
Mr. Kyriacou said his agency wants to ensure that each property owner pays only his or her fair share of property taxes through regular updates of all property values in the community. He said Mamaroneck and some other communities in southern Westchester have failed on this test by relying on obsolete property valuations as the underpinning of their assessing system. As a result many over-assessed property owners subsidize under-assessed owners. This situation continues because it is impossible to build a process of regular, systematic re-testing of market values without reformulating the rest of the process.
Mr. Kyriacou’s remedy is community-wide reassessment or revaluation. This is a comprehensive review and updating of all property values in the community. Some 65% of localities in the state already have this. Most of these communities also reexamine properties each year to see they remain in parity.
Both Mr. Kyriacou and Mr. Altieri believe an extensive education program will have to be conducted prior to and during revaluation. Residents have to be made aware that taxes raised do not go up as a result of revaluation. The tax burden is just reapportioned—some will go up, some will go down and some will remain the same. But the total property tax raised will remain the same unless the Town decides to raise or lower its request for public tax funds, called the levy.
Revaluation Would Take 2.5 Years
Mr. Altieri said that a revaluation of the Town of Mamaroneck, the Village of Mamaroneck and the Village of Larchmont would cost about $1.5 to $2 million, or about $175 per property. Including public hearings and other educational efforts, it would take about 30 months for the revaluation to be completed.
Mr. Kyriacou said that the annual cost of property tax refunds in Westchester was $44 million annually against a one-time cost of county-wide revaluation of $20 – $30 million.
Penny Oberg, a retired school college counselor asked, “What is the political fallout for a politician who recommends revaluation?” Mr. Kyriacou said he was a councilman in the city of Beacon when revaluation was proposed. Council members of both parties decided they would stick together and contribute to the program to educate the public. “The revaluation passed and none of us were voted out of office,” he said.
Margaret Shultz wanted to know the basis for valuing property. For residences, the prime measure is comparable recent selling prices, Mr. Kyriacou said. For commercial properties, it is income generated. Until recently, residential values and assessments were rising faster than commercial ones. That pattern is now reversed.
One audience member commented that municipal levies (moneys requested to run the government) were not going down while home market values had declined 10%.
A local real estate agent said she had just sold a house in Rye Neck for $625,000. It had an annual property tax bill of $23,000.
Ann McAndrews, Larchmont Village trustee, noted another burden on municipal finance was the New York State Retirement Fund’s recent demand for Larchmont to contribute $268,000 in additional funds in the next fiscal year for local employees’ pensions. Standing alone, this increase will require approximately a 2.3% tax rise.
One audience member asked what he and others could do to help revaluation occur. At this, the audience clapped in approval.