Setting The Record Straight On Reassessment

The Town Of Hempstead Admits It Doesn't Set The Assessment, But They Sure Spend Alot Of Time Talking About It And Pointing Fingers

The Chairman of the Nassau County Board of Assessors, Harvey Levinson, speaks out on misinformation, misunderstanding, and the blatant misrepresentations concerning reassessment and the assesment process

We've all read the Murraygrams, scanned the myriad press releases, heard the sound bytes out of Town Hall, and seen the TV spots and campaign ads -- all placing blame on the County Assessor for every imaginable ill, from the Assessment to the genocide in Darfur.

Now, the Assessor hits back -- about the Assessment, at least -- with a little piece we like to call, "The Truth."

Mineola, NY -- The New York State Office of Real Property Services (ORPS) calls it “common myths and misunderstandings” regarding the real impact of reassessment on property taxes.

The Town of Hempstead supervisor (Kate Murray) would have you believe that a majority of homeowners in her township saw higher school property taxes above what was expected because of court-ordered reassessment and Department of Assessment “policies.” The facts prove otherwise: When comparing the changes in school and library tax bills from 2005-06 to 2006-07 after deducting the STAR Rebates, 122,051 homeowners (or 70 percent) in Hempstead saw decreases in their tax bills that were less than the change in the school levy; only 6 percent (or 10,138) of homeowners saw their actual school tax obligation increase by $500 or more.

When one steps back from the politics being played with the issue, whether it is for purposes of deflecting taxpayer outrage for soaring budgets or simply using the lack of understanding to shamelessly promote a perennial candidate through half-truths, you cannot hide the facts. Even if reassessment did not take place, the property tax burdens imposed on homeowners by the Town of Hempstead, school districts and the other nearly 400 taxing jurisdictions throughout Nassau County would have increased each year. One only needs to look at towns in Suffolk County (that did not conduct residential reassessments for decades) to see that homeowners are facing the same property tax crisis as their neighbors in Nassau County.

For some elected officials in Hempstead town government, the repeated attacks aimed at the Department of Assessment and me is less about reality and more about politics. It is regrettable that taxpayers have to pay for the town’s repeated taxpayer-funded politically veiled mailings and TV ads that cost hundreds of thousands of dollars to prepare, print and mail each year to deflect criticism and distort the truth. Fortunately for taxpayers, there are elected leaders who set politics aside in both counties and are willing to work honestly and cooperatively studying controversial topics: Such is the case of Suffolk County Presiding Officer William Lindsay (D-Holbrook) and Legislator Lynne Nowick (R-Smithtown) or in Nassau, Comptroller Howard Weitzman (D), Oyster Bay Supervisor John Venditto (R), and Assemblyman Joseph Saladino (R-12th AD) to name a few.

What is particularly disingenuous is that, in her 2007 budget message, the supervisor stated that the “18 percent average increase in assessed valuation” in the Town of Hempstead is a “result of ongoing assessment policies” that resulted in property tax increases. This is not so.

Unlike New York City, the increased assessed values on the tax roll in Nassau County are used to lower property tax rates. For example, a home within the Franklin Square school and library districts valued at $400,000 paid school and library taxes of $4,647 (with Basic STAR) in 2005-2006; in 2006-2007, the same valued home paid $3,848. After adding this year’s STAR rebate check of $227, the actual property tax bill was reduced to $3,621 for a total decrease in the school and library property tax obligation of $1,026 – a 22% decrease.

When the Town of Oyster Bay released its budget for 2007, town officials acknowledged the fact that increased taxable value resulted in a lower tax rate. While Oyster Bay’s adopted budget increased by 7 percent, the effective tax rate per hundred dollars of assessed value for the town’s general fund decreased 7.7 percent because of reassessment.

As Chairman of the Nassau County Board of Assessors, I am obligated to perform annual updates to ensure that the market value estimates upon which assessments are based will change each year in accordance with trends in the real estate market based on a specific point in time. The annual updates also permit the Department of Assessment to adjust assessments on future rolls to reflect any decreases in the real estate market.

The Department of Assessment does not set operating budgets or tax rates, mail out tax bills, or collect taxes. Its statutory function is to determine the assessed values of properties under a four-class system that is mandated under Article 18 of the New York State Real Property Tax Law. Under the class system, written in 1981 by Senator Kemp Hannon (R-Garden City), residential property owners have benefited from a lower tax burden as compared to the other classes of property.

The supervisor does not understand that the Department of Assessment does not set the formula used to determine the percentage of the overall levy that will be paid by each tax class. The class share is mandated by the formula specified in §1803-a of the Real Property Tax Law and is not discretionary with theDepartment of Assessment. In addition, state lawmakers passed legislation throughout the court-ordered reassessment limiting the class shift (base proportion) for Class 1 (Residential) property owners to 2 percent in 2004-05 and 2005-06, and 1 percent in 2006-07. Shifts in the class share of property taxes have occurred prior to and throughout reassessment.

If the supervisor is calling for state law to be changed with regard to class system, the likely result is that property taxes paid by Hempstead homeowners will increase – not decrease.

When calculating the increase in school taxes paid, the supervisor conveniently ignored the fact that improvements and renovations (as reflected in building permits that are provided by the town to the Department of Assessment) and loss of exemptions, as required by law, will result in higher taxes. By including these properties in her analysis, she is deliberately distorting the truth. In addition, the supervisor also ignores the fact that as property tax exemptions are granted to some properties within a school district, the property tax rate is increased and other homeowners must makeup the shortfall.

Furthermore, not only did the STAR Rebate checks authorized by the state legislature for the 2006-07 school tax year not appear on the school tax bill, the amounts of the rebates were ignored or purposely omitted in the supervisor’s analysis of a homeowner’s actual school property tax obligation. A fair and objective analysis of the increases in school taxes paid requires that the amount of the STAR Rebate checks be deducted from the 2006-2007 school tax bill.

The byproduct of annual reassessment is to add taxable value to the rolls each year. The additional assessed value effectively lowers the school tax rates for every school district in the county. Actual tax rates for the 2005-2006 school tax year were based on a Level of Assessment of one-half of one percent of full market value. Since the Level of Assessment was lowered to one-quarter of one percent of full market value for 2006-2007, to determine the true percentage of increase or decrease in the tax rates, the 2005-2006 rates were doubled for factual comparison purposes to properly measure tax rates based on equal levels of assessment.

For example, the school property tax rate per hundred dollars of assessed value in East Meadow, when adjusted to equalize the level of assessment from 2005-2006 to 2006-2007, decreased from $654.426 to $581.232; Franklin Square decreased from $554.984 to $475.874; Wantagh decreased from $647.474 to $575.441; and so on. A complete list of effective school district tax rates are posted on the Department of Assessment Website at www.mynassauproperty.com and follow the link to “News and Other Assessment Information.”

It should also be noted that, with the exception of a handful of school districts, homeowners are only presented with the percentage of increase in spending when budgets are submitted to voters in May. Homeowners only discover what the actual tax rate is several months after the budget is approved. School districts had all the information they needed to present a clearer picture of what the approved tax rates would be prior to the budget vote – but most chose not to.

Are there any examples of homeowners who received school and general tax bills with property tax increases far above the percentage increase in spending? The answer is – yes. In the first years of reassessment, some homes were undervalued compared to similar homes within the same neighborhood. The undervaluation was “corrected” on these homes in the 2006-2007 tax year to insure fairness and equity in the assessment process.

Instead of blaming school districts or municipal budgets for annual increases in spending, I have spent my time, since assuming office in January 2004, trying to offer real solutions to find ways to reduce the property tax burden.

Some of my suggestions have included: establishing a non-partisan statewide committee to study my proposal to abolish the school property tax and replace it with a modest income tax to be paid by renters and homeowners alike, while subsidizing poorer districts with state aid; sharing the commercial property tax base throughout each town; a complete overhaul of the STAR program and funding formulas; and, the dissolution of commissioner-operated special taxing districts and town-operated special districts such as garbage/sanitary and water districts.

Fire districts, while retaining their local identity, would no longer operate or be treated as separate taxing jurisdictions and would be required to submit their budgets to the town for review and approval.

As voters in Nassau County will recall, I was elected because of a property tax backlash that resulted after the first reassessment was conducted under the supervision and direction of New York State Supreme Court Justice F. Dana Winslow and administered by the former Republican Chairman of the Board of Assessors. The “tax shock” that was experienced by homeowners in their October 2003 school tax bill resulted when Nassau’s unfair and archaic 1938 construction-based assessment system was replaced with a valuation system that relied on establishing the fair market value of a home (the price a willing purchaser would pay for a property) at a specific point in time. Unfortunately for homeowners, when the previous administration agreed to reassess residential properties at a percentage of full market value in March 2000, little was done to petition the court for a gradual phase-in of values.

In 2004, I lobbied the state Senate and Assembly to enact legislation that would have moderated school tax increases in 2004-2005, 2005-2006 and 2006-2007 through a multi-year phase in. While my legislative initiative was supported by both parties and passed unanimously in the Assembly, it was left to die in a Senate Committee.

What is ignored by the Town of Hempstead supervisor is the fact that the residential reassessment has been under the jurisdiction of the New York State Supreme Court since the settlement of the class action suit in 2000. The 2007-2008 assessment roll will be the first roll under my total control and outside of the jurisdiction of the court. With residential real estate prices skyrocketing throughout the first three-years of reassessment, the Level of Assessment (the percentage of full market value at which properties are assessed) was reduced proportionately to capture the increases in values based on the new market-based assessment system. The change of the Level of Assessment was a court required component of the reassessment project that, in effect, set aside the law limiting assessment increases to six percent each year or 20 percent over five years.

In June 2005, I asked the Board of Assessors (and they unanimously agreed) to freeze the Level of Assessment for the 2007-2008 roll, so that the six percent cap was restored. Did the supervisor not think it was worthy to inform homeowners that the six percent cap was reinstated at my first opportunity to do so legally?

While the Hempstead town supervisor would have you believe that experts in the field of assessment in the private sector, government or the media are wrong to disagree with her self-serving analysis, she has clearly misrepresented the facts surrounding property assessments in Nassau County.

Mark Twain said it best when he stated that there are three types of lies: “Lies, damn lies, and statistics.” It appears that this motto that holds special significance with the Town of Hempstead’s chief executive.

This is unfortunate.

Hempstead 05-06 to 06-07 with Basic and Enhanced Rebates and Budgets

Town of Hempstead School District Class One Tax Rates
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And what say you, Madam Supervisor? The pulpit is yours. Blog away -- if you dare -- and you will be heard.