Brian Gilbert paid $195,900 for his three-bedroom ranch in the town of Salina. In the neighboring town of Clay, a couple bought a similar-sized house for nearly the same price.
Both houses are in the Liverpool school district. Both pay taxes to Onondaga County. And on the open market, the two houses have similar value.
But Gilbert pays $2,000 a year more in school and county taxes than the couple in Clay.
That disparity points to a nasty quirk in the property tax system that is raising concerns as home prices soar.
Gilbert’s property assessment went up sharply after he bought his house – and his tax bill followed – because Salina raises assessments to match market prices. Clay does not.
In some cases, that can force Salina homeowners to pay more than their fair portion for services they share with neighbors in Clay.
Property taxes should be based solely on the value of your house compared with others, not influenced by the conflicting assessment strategies of neighboring towns.
It’s another example of the chaotic and confusing mix of strategies that New York allows local authorities to use to assess property for taxation. Towns can choose their own approach. It’s all legal.
Fearing that their residents are paying more than their fair share, Salina officials this year asked state legislators to change the law to require all towns to follow the same playbook and assess properties at full value.
“Our residents now shoulder a greater burden because the town of Clay is not increasing their assessment,’’ Supervisor Nick Paro said.
Towns like Salina and Lysander this year inflicted double-digit assessment hikes on their residents, spurring plenty of complaints from homeowners. Next door, Clay’s strategy of leaving nearly all assessments unchanged year after year was a source of anxiety for both residents and assessors.
With just over 60,000 residents, Clay is the largest town in Onondaga County and the 17th largest in New York.
“For every property that’s undervalued in Clay, everybody in the same school district pays more than their share because of that,’’ said Theresa Golden, assessor for the towns of Lysander and Van Buren. “And everyone in … Onondaga County pays more than their fair share, because they’re undervalued (in Clay).’’
But it’s unclear exactly how the clash of assessment systems affects the overall tax balance between Clay and its neighbors. Clay’s tactics don’t always mean that its residents pay less.
The comparison with other towns is complicated because the state jumps in to try to balance things whenever two or more towns have mismatched assessments.
In the Liverpool school district, for example, the state must estimate how much Clay assessments would be worth at full market value so the school district can charge Clay and Salina residents equivalent tax rates. State officials crunch real estate sales and other data to calculate a multiplier that translates Clay assessments into full market values.
They call it the “equalization rate.”
Even though most Clay assessments don’t change from year to year, annual revisions to the equalization rate change what each assessment means at full value. Over the past decade, for example, all Clay properties have gained 30% in equalized value without any change in the assessments.
One-by-one assessments are considered more accurate than a computer-generated equalization formula. But which one will raise your taxes more depends on specific circumstances. In Salina, some assessments jumped more than 30% this year alone. Others have not increased that much in more than 10 years.
Rob Bick, the Clay assessor, said inconsistent assessment practices between towns are not a major source of inequity. But he readily concedes that the property tax system is rife with unfairness, in every town. Assessors generally don’t have enough staff to keep up with changing home values, he said.
“The system is full of inequities in ALL towns,’’ Bick wrote in an email. New York’s property tax system, he said, “needs to go out the window.’’
‘Trying to do the right thing’
Gilbert’s example shows what Salina officials are concerned about.
The town raised Gilbert’s assessment 88% last year — from $104,000 to $195,000 – after he bought his house on Juneway Drive. Before that, the assessment had not been hiked since at least 2012.
Prior to the assessment increase, the school and county taxes on Gilbert’s house were about $400 a year less than the house on Swallow Path in Clay that sold for the same price. Now Gilbert pays $2,000 more.
The Clay house has not had an assessment change in at least a decade. In 2012, its equalized value was $108,295. That has gradually risen to $140,719 this year — still more than $50,000 less than the new owners paid.
Unlike most states, New York won’t tell local assessors how to do their job. But state tax officials strongly suggest that the fairest, most accurate and transparent method is to maintain assessments at 100% of market value. In other words, your assessment should be what someone would pay to buy your house.
Only six of Onondaga County’s 19 towns follow that advice. The other towns and the city of Syracuse have let their assessments slip below market prices – in some cases, far below. Clay, which hasn’t conducted a townwide revaluation in six decades or so, assesses property at 3.3% of full value. A $200,000 house would be assessed for $6,680.
To level out the tax rates for the Liverpool school district, which serves residents of Salina and Clay, the state each year produces an equalization rate’ that evens out the two different assessment scales.
But the equalization rate doesn’t make up for every inconsistent assessment.
Clay’s equalization rate this year yields the equivalent of a 10% increase in home values. But residential assessments in full-value towns like Lysander, Manlius and Salina jumped by 13% to 14%, on average.
“That’s an indication the state isn’t doing their job correctly,’’ said Denise Trudell, the Salina assessor. “We’re trying to do the right thing, especially within our town, to try to keep all the neighborhoods equitable. But the problem is, when you cross town lines you’re no longer equitable. And that shouldn’t be.”
The minority of assessors who follow the state’s guidance and maintain full-value assessments are punished for doing the right thing, said Patrick Duffy, the assessor in Manlius.
“Basically, there’s a penalty for maintaining your properties at 100%,’’ Duffy said. “Because you do wind up taking on a bit more of an unequal burden between municipalities.’’
A blunt instrument
Here’s the problem with equalization: It’s a single rate that applies equally to every type of property in a municipality – commercial buildings, vacant lots, factories and farmland, in addition to single-family homes. The equalization formula assumes that every property in town gained value at the same rate.
It’s a blunt instrument that does not account for differences in neighborhoods or types of property. In contrast to the one-size-fits-all of equalization, most residential assessment increases in Salina this year ranged from 2% to more than 40%.
When assessments are left unchanged and subject to equalization, properties that gain the most value year after year get a tax break. Properties that appreciate at a slower rate – often owned by the poorest residents – tend to pay more than their fair share.
In the town of Spafford, the equalization rate this year changed a whopping 20%. That means aging farmhouses in the rural town will be taxed as though they gained value just as fast as millionaire mansions on the Skaneateles Lake waterfront.
Clay’s 10% equalization increase this year fell short of residential assessment increases in most other towns because it was held down by slower-rising commercial assessments, said Golden, the Lysander assessor. Commercial properties have not gained value in recent years the way single-family homes have, she said.
“Residential properties have gone up more than anything else in the last five years,’’ Golden said.
The state could resolve uneven assessment practices if it amended the law to require every town to revalue properties at a specified interval, said Warren Wheeler, executive director of the state assessor’s association. But the association would support such a measure only if the state helped pay for the extra cost, Wheeler said.
‘What can I do?’
Sue LeFever, 76, said she is stunned by the high prices of homes in Lysander, where she has lived for years in a house overlooking the Oswego River.
“I can’t believe people are paying these prices,’’ she said.
The assessment on LeFever’s house has gone up three years in a row — 14% this year and 33% over three years. Yet across the river, on Gaskin Road in Clay, 96% of the houses saw no increase this year. LeFever said she complained to Golden, the assessor, about the disparity.
“I said, ‘What can I do? Who can I complain to about this?’ Because this has been this way for years,’’ LeFever said.
In New York, the onus is on property owners to correct mistakes by challenging their assessment if it is too high. But there is no provision for complaining that someone else’s is too low.
Gilbert, the Salina resident, said the system should be reformed. But he wonders whether there is enough public outrage to push for change.
“I don’t know if there will be enough people to complain about it to make them do anything to change it,” he said.
A ‘barely’ funded necessity
Few towns have the resources to accurately assess at 100% every year, said Bick, the Clay assessor.
“It is inherently impossible for one or two people to appraise thousands of properties, some of them complex commercial properties, accurately,’’ he said. “No rational person would think otherwise.”
In towns that do not revalue property annually, assessors should limit their changes to properties that get physical enhancements, in Bick’s opinion.
“If there are no physical improvements, then an assessor in a non-reval town should not raise a value based on sales price alone. The process is different,’’ he said. The two methodologies are “apples and oranges.’’
Clay’s method produces acceptable results according to metrics the state uses to test the uniformity and fairness within a town. The state does not measure uniformity between towns.
Having disparate assessment systems among neighboring municipalities can create inconsistency and unfairness that no equalization rate can solve, said Jay Franklin, the director of assessment for Tompkins County.
He said the state could mandate uniformity but would face opposition from towns unless it also provided more funding. Property assessment is often the last thing on which elected officials want to spend money.
“I think a lot of towns look at the assessment function as a necessary evil and fund it barely to the level of being able to do the minimum they need to do,’’ he said.
More than five decades ago, Tompkins County consolidated assessing at the county level and remains the only Upstate county to do so. Franklin directs a staff of 12 that conducts annual reassessments throughout the county. All properties are assessed at 100% of market value.
“We treat everybody here in the county equally,’’ Franklin said. “And, you know, everybody got pretty much hammered this year.”
‘We need to start the conversation’
Assemblymember Pamela Hunter, D-Syracuse, whose district includes Salina, said she has been contacted by town officials and shares their concerns about unfair assessments. She said she is reviewing what can be done legislatively but acknowledged it’s a complicated subject.
“It really needs to be comprehensively reviewed, about how we are setting property taxes,’’ she said.
For most of its history, New York had a legal requirement to assess property at full value. But in practice the mandate was ignored. Then, in 1975, the state’s highest court threw the system into turmoil by ruling that fractional assessments were illegal.
The Court of Appeals decision set off several years of debate. In 1981 the legislature passed a law that did away with the full-value mandate, giving local assessors the leeway to assess property at a “percentage of value’' as long as each property was assessed at the same, uniform percentage. Gov. Hugh Carey vetoed the bill, but the legislature came back for a special session to override.
Since then, the state tax department has urged municipalities to pursue full-value assessments, but local officials get the final say. Clay’s longstanding reluctance to reassess at full value has not gone unnoticed.
In 2008, as the neighboring town of Cicero moved toward undertaking a full reassessment, state officials talked about whether to “lean on’' Bick to get Clay to follow suit, according to an email provided by Bick.
“I know how the Clay officials feel about reassessment,’’ wrote an official from the state tax department. “But we need to start the conversation. You mentioned that you’d like to ‘lean on Rob.’ We were going to have you lean later. But maybe sooner is better than later? What do you think?”
Whether they leaned on Bick sooner or later, it had no effect on Clay.
“My town board got a real kick out of it at the time,’’ Bick said.
Related Stories:
Spotty assessments in Syracuse mean property tax hikes for the unlucky few (map)
Syracuse’s unfair property tax system hurts poor the most; here’s what can be done
New York state has the ‘craziest’ assessments; Syracuse is average
Syracuse hikes hundreds of property tax assessments; it’s the most in 2 decades
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