Of Blenders, Toasters, And Property Tax Assessors

A Point-Counterpoint On The Nassau County Assessment

Here at The Community Alliance blog, we've gone back and forth, time and time again, about assessment, reassessment, the role of the Assessor, and what it all means to the homeowner/property taxpayer.

Views differ sharply on what's wrong with the assessment process, how to fix it (or scrap it), and the impact of assessment and reassessment upon the ever-escalating property tax, but one thing all Nassau County residents seem to agree on --that bottom line is way too high.

Of course, the average assessment can be calculated at a single dollar, and still, the tax bill -- based not only upon assessed value, but on the tax rate (as in, "the tax rate also rises") -- will continue to go up, up, and up some more.

The problem, of course, is spending, which drives up tax rates, and has commercial and residential property owners alike scrambling to challenge their assessments, year in and year out, in the hope against hope of lowering that tax bill -- upwards of 60% of which is comprised of school taxes.

Perhaps if we concerned ourselves less with the assessment, and more with containing costs in Long Island's 124 seperate and distinct school districts (which are exempt, by the way, from the new State law that gives we, the people, the opportunity to consolidate, or even eliminate, taxing districts), that property tax bill would, indeed, go down.

Then again, what would we -- or they -- have to talk, point fingers, and play political football about if a scapegoat couldn't be found, either in the dreaded assessment, or in the embodiment of all evil, the Assessor.

Fact is, while raging against the assessment system, and railing against the Assessor, makes good political fodder, this will not serve to lower the property tax.

In truth, the only way to lower that regressive tax -- short of replacing it with an income tax, or other form of progressive financing -- is to contain costs and curtail spending.

That said, we are pleased to bring you, live via satellite (but never on cable), two avid followers of this blog, and good friends of community, Donald X. Clavin, Jr., the Receiver of Taxes of the Town of Hempstead (its okay to boo ;-), a rising star in New York's GOP, and Henry Boitel, Director of the Rockville Centre Democratic Club, trying to keep his party from pulling the rug out from under itself, in a Point-Counterpoint on the assessment.

Their opinion pieces originally appeared in the Herald newspapers, and are republished here for your thoughts, comments, and insights.

Hey, its your money. You should be trying to keep more of it in your pockets.

Let us know what you think at thecommunityalliance@yahoo.com.

POSTSCRIPT: We've added a post-publication retort from the Assessor himself, offering a "mid-year market analysis." Clears the air or muddies the waters? We report. You decide!

On Blenders and Tax Assessments
Donald X. Clavin, Jr.

The Nassau County Department of Assessment could learn a lot from Macy’s if they handled tax grievances the way the retailer deals with broken blenders. After all, in both instances we’re dealing with unhappy customers (taxpayers) who are frustrated with a defective product and want satisfaction. Unfortunately, the assessment department has never really considered those who have overpaid taxes as a result of assessment errors as aggrieved customers. Indeed, a recent report by the county assessor claimed that the hemorrhaging assessment system was not broken even while a recent Newsday article [“Millions in Refunds in Nassau”] observed that Nassau has paid out half a billion dollars in refunds between 2003 and ’08.

Back to my blender experience. A few years ago, I purchased one of these countertop appliances at Macy’s only to find out it didn’t work when I got it home. Admittedly in a cranky mood, I returned to the department store ready to fight for a refund on my defective blender. In true testament to sound customer service, a store clerk greeted me upon my return with a smile. And, after I explained what had happened, she apologized and cheerfully refunded my money. What the Macy’s representative did was not some mysterious retail strategy. Rather, it was common courtesy and emblematic of the right way to treat customers or anyone who has been sold a defective product (i.e., an erroneous assessment).

Unlike the Macy’s model for dealing with people who want satisfaction in seeking refunds for defective products (assessments in error), Nassau County has a slightly different approach…“Stop appealing your property tax assessments. That’s the public service message courtesy of Thaddeus Jankowski, Nassau County’s first appointed assessor,” [see Newsday column – “Residents Just Want to Know Tax System Works,” July 14, 2009]. What the county assessor has done is to add insult to injury by claiming his product isn’t broken, telling taxpayers that they shouldn’t challenge their assessments and attacking officials (including the town receiver of taxes and county legislators) for informing residents of their right to challenge an assessment if they believe it is wrong.

At the core of the problem with the assessor’s logic in blaming those who challenge their assessments for the staggering payouts on tax challenges is the fact that Nassau only pays an award it the property owner is over-assessed. Therefore, the $90 million in annual tax grievance refunds that Nassau pays out is based on the county’s errors. Consider the audacity of telling taxpayers not to seek redress for county mistakes that result in an overpayment of taxes. You have to say this for Tax Assessor Jankowski – he has chutzpah!

Don’t you think if Macy’s was paying out $90 million per year in refunds for broken blenders they would have fixed the problem by now? Carrying forward reductions from one year to the next instead of immediately increasing assessments is something many in the tax grievance industry suggest as a possible remedy to the problem. Freezing assessments for a predetermined number of years (3-5 years) has also been recommended as a possible mechanism to allow challenges to level off an provide and opportunity for assessment challenge adjustments to catch up with assessment department updates/revaluations. Finally, training county employees on how to actually operate a computer system for which the county has paid $50 million would be a good first step.

While I appreciate the difficulty of the tax assessor’s job, I think most residents will agree with me when I say that half a billion dollars in errors is enough. What’s more, fixing a broken assessment system should rely on productive and well reasoned remedies, rather than blaming those who have been over assessed for challenging their assessment.

Given the county assessor’s peculiar approach to customer service, Nassau property owners have to ask themselves, “Would you buy a blender from this man?”

Mr. Clavin is the Receiver of Taxes for the Town of Hempstead. [As he often points out, he doesn't set the tax rates, he merely collects the payments.]
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Plain talk on a real problem: reducing the tax and fee burden on property owners
Henry J. Boitel

We need some plain talk on a real problem: The mounting property tax burden during what will surely be a long term state of economic difficulty.

Donald X. Clavin Jr.'s column "On blenders and tax assessments", criticizes Thaddreus Jankowski, the new Nassau County Assessor, for suggesting that property tax protests should be curtailed or discouraged. Mr. Clavin is somewhat unfair in his comments since he fails to accurately state the Assessor's position.

As I understand that position, it is: Tax assessment is not an exact science.

It is almost certain that good arguments can be made for moving an assessment one way or the other. In many jurisdictions, a tax protest will automatically fail unless the protesting property owner claims that the assessment is too high by at least 5 percent or so. Nassau has no such limitation. Many people lodge tax protests and are able to make a logical case that, as compared to some nearby homes, their home is over-assessed by several thousand dollars. The result is a small win for the homeowner, a large cost to the county in time and money for processing the protests, and, in the end, the homeowner only gets back half of the overcharge because they usually have hired a protest company that splits the savings with the homeowner.

There certainly is a logic to the Assessor's position. I suggest that the Assessor (be invited) to back up that logic with facts, i.e., what is the usual and average reduction in assessment and tax, in terms of dollars and percentage, following a successful tax protest?

Having said that, I agree with Clavin that the property tax system in Nassau County is not fairly administered. That is not our present Assessor's fault, since almost all of the assessments presently in place predated his appointment. The elephant in the room is that, even allowing for a reasonable margin of error, there can be substantial inequities because much of the appraisal process is superficial or grounded in long-term inequities. Property owners are also part of the problem. I have never heard any property owners complaining that the tax assessor has appraised their property too low.

There are several matters that our assessor and our policy makers ought to look into:

1. As I understand it, the "comparables" against which a home owner can compare his assessment are those that are in the same community as his or her home. Theoretically, an entire North Shore community, for example, may carry assessments that are way out of line with the valuation of homes in the Village of Hempstead. I wonder what, if any, actual effort is made to equalize valuations across the county or, at least, across each of the three Towns?

2. It's close to impossible for the entire county to be fairly assessed in a short period of time. It would probably take at least five years. I think a program of standardized assessments should divide the county into rational segments, and the sequence of when a segment will be re-appraised ought be determined by lot.

3. In the meanwhile, the "actual value" assessments we see in our tax bills are way off if measured by the prices homes are fetching if and when they can be sold. There ought to be a substantial effort on the part of the assessor to determine which areas of the county have been most devalued by the growing drop in real estate prices.

4. At the time of assessment, homeowners should be provided with a reasonably clear written explanation of the basis for their assessment, including comparables, improvements and what, if any, positives and negatives of their property were taken into account.

5. Clavin seems to be proposing the so-called assessment freeze. That is a phrase that politicians often use in place of suggesting any remedy. They use it as though it means a tax freeze. There is no such thing as a tax freeze. The only way taxes can be frozen is if governmental expenditures are frozen (or, actually, decreased). Assessment variations only move the deck chairs around. "Freezing" assessments freezes inequities. Homeowners should always be able to protest their assessment if they think it is materially unfair. A homeowner always should be able to initiate a reassessment, and should probably be charged a reasonable fee if the reassessment shows the home is fairly appraised. If the homeowner wins, however, he or she should be paid a reasonable administrative fee if it is shown that the home was unfairly appraised. There is merit to the proposal that the county should be limited from initiating reappraisal of a home to say, every five years.

On a related matter, we are headed for election of county legislators and county officers in November. I took the time two years ago to listen to all of the debates on News 12 amongst those who were running for that office. For the most part, when it came to real estate taxes, almost all of them spoke total nonsense. They recite the mantra of "relief for the property owner", but make no meaningful proposals. They advocate a "freeze," which, as I have already noted, is to tax policy the equivalent of moving around the deck chairs.

I hope that this year, we will put all of their feet to the fire to show that they understand the problem and that they are prepared to make hard choices to provide true tax relief while meeting the increasing county debt and infrastructure deterioration.

I suggest that, as we swing into the campaign season next fall, every responsible property owner should write to the candidates for county office who will be on their local ballot, and stress the need for real solutions that will cut the pork, while maintaining the fundamental social objectives of modern government. Part of such a solution must be a closer coordination among the primary taxing authorities: county, school, town and village. They have to start looking at it from the perspective of the total tax and fee burden on property owners. In the process, they should bear in mind that increases in governmental fees and sales taxes are not solutions - just additions of more deck chairs at a growing expense to the people.

Over this past week we received one, of the seemingly endless stream, of full color Town of Hempstead mailings in which Supervisor Kate Murray and Councilman Tony Santino, beneath their smiling photos, tell us: “Murray and Santino to present tax freeze budget ahead of schedule.” [their emphasis]. I hope they have accomplished that feat, but that remains to be seen and debated.

I also hope that one of the items in the budget will show the actual postage, materials and personnel costs that are incurred from mailings that arrive, sometimes several times a week, from those two Town of Hempstead officials. They might also include a clear statement concerning the total cost of political appointments, i.e., non civil service jobs.

Mr. Boitel is a former member and president of the Rockville Centre Board of Education, and has resided in Rockville Centre since 1972. He is a director of the Rockville Centre Democratic Club.
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Click HERE to read the official Nassau County Assessment Administration System Review: Analysis and Recommendations.

DEPARTMENT OF ASSESSMENT ISSUES FIRST-EVER MID-TERM REAL ESTATE MARKET ANALYSIS
Declining Real Estate Values Likely to be Reflected in Upcoming Assessments

(Mineola, NY) - The Nassau County real estate market is experiencing a severe downturn, according to the first-ever Mid-Year Real Estate Market Report released today by the Department of Assessment. Unless the market turns around, a corresponding drop in assessed property values is likely to be reflected in next January's Preliminary Assessment Roll.

Today's report is the first in a series of regular mid-year reports about the Nassau County real estate market by the Department of Assessment. Bleak sales figures and other key indicators examined for the report show that the downturn is affecting a broad swath of the residential and commercial real estate market in the County.

On the residential side, the mid-term review shows that residential sales volume has dropped by 57 percent between the second half of 2008 (July-December) and the first half of 2009 (January-June). All indicators analyzed showed that the sales prices of homes have fallen by at least 12 percent since July 2008.

On the commercial side, sales prices in the County have declined by 25 percent between 2008 and the first half of 2009. Vacancy rates have increased by 7.5 percent since the fourth quarter of 2008. Sales volume has dropped by 48% between the second half of 2008 (July-December) and the first half of 2009 (January-June).

The mid-year analysis offers property owners a useful illustration of what is happening in Nassau County, according to County Assessor Ted Jankowski. “This is a sophisticated mid-year snapshot of the real estate market in Nassau County, and our outlook for the rest of 2009 based on the most comprehensive data available,” Jankowski said. “Based on the data we anticipate that both residential and commercial assessments will be coming next January 2, 2010 - in comparison to January of 2009.“

Nassau County has over 418,000 properties, with a total market value of $309 billion as of January 2, 2009. But unusual aspects of the County's taxing structure have contributed to public confusion about assessments. Nassau County is the second largest assessing jurisdiction in the State of New York after New York City. But while New York City has only one taxing jurisdiction, Nassau County has 320 taxing jurisdictions, many of them overlapping. Depending on where a property is situated, a Nassau County property owner can be subject to combined levies of up to 22 different taxing entities.

Contrary to widespread belief in Nassau County, assessments are not a tax. Instead, they are used by various taxing entities to determine a property owner's proportionate “share of the tax pie” for each school, town, county, and special taxing entities. Despite the anticipated drop in assessed values, the unusual lag-time in Nassau County between January 2, when assessments are determined, and when they are actually used by taxing jurisdictions to calculate property taxes means they will not be reflected in property tax bills until October of 2011 for school bills and January of 2012 for the general tax bill.

Mid-Year Real Estate Report - FY09

Assessment Map