Thursday, October 30, 2008

LI School District Property Taxes Take A Hike

Nassau County Homeowners Get An October Surprise

You knew it was coming. After all, we told you so!

Homeowners in many of Long Island’s school districts – at least in Nassau County, where school property tax bills recently went out – displayed both shock and dismay when they saw as much as a double-digit increase on the bottom line. Ouch!

Of course, this should come as no surprise to anyone, with rising costs for such staples as utilities and transportation (not to mention the staples themselves), coupled with a substantial reduction in the State’s STAR outlays to Long Island school districts.

Yes, the hand that put that STAR rebate check into one pocket, now deftly reaches into the other pocket to take what little may be left in your wallet.

Whose to blame here?

The school districts? Well, curb spending and cut costs to the bare bone, where you can, but someone’s got to meet those contractual obligations (from salaries to insurance), and ante up to pay for the mandates yet unfunded by either the State or the feds.

The State Legislature? With the Assembly failing to adopt legislation imposing a cap – with or without circuit breaker – the continued reliance on an antiquated system of aid formulae that few, even in the education arena, can comprehend, and Long Island getting back less that 25 cents for every single tax dollar it sends to Albany, why, the sky’s the limit for school property tax increases.

We know. Let’s blame it on the Assessor. Harvey, before you retire to Florida, tell us where we can send our property tax bills.

It’s the perfect storm, really. Inaction in Albany. Expenses for school districts, as they are for most of us, going through the roof. Disparity in State Aid, based on a confounding mix of formulae that both time and reason hath forgot, between the nearly full-funding received by upstate districts and the paltry sums that trickle down to Long Island.

The proverbial ship has hit the fan, folks. And with New York’s deficit deepening, and debt mounting, don’t look up the Hudson for anybody to bail us out.

Hey, we warned you about spending that STAR rebate check. Foolish homeowners. You thought you could use that money to put food on the table, make your next mortgage payment, or buy books next semester for your daughter in college. Let that be a lesson to us all!
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From Newsday:

School-tax hikes in Nassau anger residents

More than 75,000 homeowners in Nassau County are getting socked with double-digit -percentage hikes in school taxes - a shock for many in a year when school districts raised tax levies an average of about 4 percent.

While overall district levy increases are the lowest in a decade, 70 percent of individual Nassau homeowners are seeing tax hikes exceeding 4 percent in bills received earlier this month. And about one homeowner in every five is getting an increase of 10 percent or more, according to figures prepared by the County Assessor's Office at Newsday's request.

Tax levies are the total amount raised through local property taxes to pay for school expenses; levy increases may be higher or lower than tax hikes on individual homes.

In response to widespread complaints from Nassau taxpayers, school and county officials explain that much of the rise in taxes is beyond the control of schools themselves.

Contributing factors include a continued rise in taxable values of homes due to a lag in assessments, along with reductions in the state's STAR tax credits, which are paid to schools in lieu of property taxes.

Many homeowners find such explanations difficult to fathom, especially at a time when actual housing prices in their own neighborhoods are starting to sag.

"I went off my rocker!" said Tom Lavin, of Woodbury, a retiree who saw school taxes on his high-ranch home jump 10.7 percent.

A friend, Eleanor Hund, who lives in neighboring Syosset, said she was "shocked" by a 14.5 percent rise in her taxes.

In contrast, the Syosset-Woodbury school budget, approved by residents in May, carried a tax-levy increase of 5.98 percent.

At the time, local school officials said they couldn't estimate the effect of that levy on individuals' property taxes because factors needed to calculate those taxes, such as home assessments, had not been finalized.

State and county authorities note that much of the extra taxes are offset by another form of STAR payments - rebate checks mailed directly to homeowners. In Nassau County, most checks range from $170 to $860 per household, depending on income and other factors, with payments as high as $1,026 for older residents with limited incomes.

Some of those authorities acknowledge, however, that homeowners' burdens could increase substantially next year, if the state cuts back on rebates in response to a weakening economy.

On Tuesday, Gov. David A. Paterson projected next year's state budget deficit at $12.5 billion.

"If the state is short of money, they could cut anything," said Nassau County Assessor Harvey Levinson.

Figures prepared by the assessor's office show that about 233,000 residences out of a total 333,000 in the county got school tax hikes of more than 4 percent, while 76,000 got increases of 10 percent or more. The total excluded about 52,000 residences where tax hikes were affected by changes in exemptions and other special circumstances.

Levinson says he sympathizes with homeowners who wonder why assessed values continue to climb in the face of a weakening market. Assessments, he explains, are based not on current housing prices, but on prices paid in 2006 and the latter half of 2005.

The reason for this time lag: a state law requiring the county to set assessments early, in order to give property owners time to appeal before receiving their tax bills.

Homeowners also are confused, Levinson adds, by the state's practice of dividing STAR money between payments going directly to them and payments going to school districts. The assessor contends that all STAR money should go to schools, because this would make distribution cheaper and allow schools to curb taxes further.

State lawmakers defend the current system, on grounds that it ensures homeowners benefit directly.

STAR rebates do not go to owners of commercial property, however. Richard M. Bivone, whose East Meadow firm provides fire-safety services, saw the school tax bill on one of his offices recently rise 7.7 percent, even though the East Meadow school district raised its levy 4.7 percent.

"It's debilitating, because there's no end in sight," said Bivone, who is president of the Nassau Council of Chambers of Commerce.

The rate-setting system also creates headaches for school officials, who have only limited control.

"This is one of the most difficult things to explain to taxpayers," said Leon Campo, superintendent in the East Meadow district, "because we're explaining the work of someone else."

Suffolk's tax bills go out in December.

Copyright © 2008, Newsday Inc.
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The View From John Q. Public:

What were Long Island residents thinking last May when most approved low single digit school tax increases? Did they really think those numbers were going to hold up?

School administrators and boards have known for years how to hide surplus cash. Now they have mastered the art of playing with tax rates and property valuations. Schools put budgets up for vote in May. What people are actually voting on is the total spending amount but schools are always out their SELLING the tax increase amount. In 2008 this amounted to an average 4% increase.

So, how do schools determine the tax rate that they are SELLING to the public? It’s so simple, even a cave man could do it. They take the amount of money they want to take from us, subtract the amount of money they are to get from grants, federal and state sources and divide it by the prior years actual assessed property value which they adjust so they can back into the tax rate they feel they can SELL. Bottom line, they play games with the numbers and can sell whatever tax rate they need for budget approval. Then when the actual assessed values come out in October (like we see today), the real tax comes to light. Some schools like Wantagh and Patchogue have seen through this scam and reject even single digit tax increases.

Schools start working on their budgets in November so as we get into the 2009 school budget season, school boards and administrators will have some huge hurdles to overcome and find new ways to hoodwink the public. I think their time is up! As Newsday helps educate the public on how all this works, schools will also have to deal with huge cuts in grants and state funding. More importantly, the recent economic meltdown attributed to the housing crisis (fueled by inflated property values) will put a real focus on this newly discovered new math!

Robert J. Newman
Patchogue , NY
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  1. Its a joke. I work like a dog and school taxes rob my business and my home. Moved into Bellmore 5 years ago, taxes went up about $8000 per year. $8000 that would pay for my kids college. Too bad I cant stay her. My kids won't move here and knowbody cares. The only people having work done on their homes or taking vacations are the teachers. My kids teacher retires with full pension at 55. I own a business with 25 employees. I can never retire. I just support the teachers. What a joke.

  2. New York is too "top heavy" : Too much duplication of services in School districts, Fire districts, water districts, etc.

    We need to face reality and begin the process of
    consolidation of all these special taxing districts and put an end to duplication of services, start combing our resources and save the taxpayers from being taxed to death.