Assessments and taxes are not the same thing

By DAVID HULSE

MONTICELLO, NY — Don’t confuse a revaluation of your property assessment with increases in your tax bill, because they don’t really have much to do with one another, according to Sullivan County Real Property Services Director Paul Burckard.

A recent case in point has been the revaluation being done by Highland and Lumberland assessors as part of an effort to create a certified taxing district for the Eldred Central School District.

The certified district is being created to stop the decades-old problem of shifting burdens in the school tax levy between the two towns.

Several property owners, mostly in Lumberland, have complained about higher assessments that resulted from the revaluation.

Equalization

The tax burden has shifted wildly between the two towns in past, because while they are very close in size, population and other ways, the state has often found their assessment rolls to be of varying accuracy. To equalize the variances in two towns’ rolls, for taxing in a joint district like the school, the state assigns an equalization rate formula, which the school district must use to levy taxes.

In recent years New York State and the Town of Lumberland have disagreed over the assessment of the former O&R power facilities on the Mongaup River, which has led the state to find the town over-valued. Thus the state’s equalization rate has dropped that value for school taxes and Highland has picked up the difference.

Within a certified district, both the school district and the state certify that both towns are assessing at 100 percent of full value, so no equalization rate is used.

Assessment

Burckard says the only legitimate issue about assessment is fairness. What is your property worth? State law requires that all properties be taxed equally. Most residential property and unimproved property in the towns are assessed on what is called a market value approach.

Essentially, that means that a value of your property can be appraised from the results of the sales of five other nearby similar properties. With a more active real estate market locally, values have generally increased.

Revaluation

A revaluation views all properties, so theoretically all properties either increased equally or to equal levels. In other words, if any house that should sell for $100,000 was assessed earlier for something less, $40,000 or $60,000 for example, it should now be assessed the same as any other house that might sell for $100,000.

This also means that some assessments went up more than others, because as Burckard said, sometimes things were overlooked in past. These properties will have higher tax bills.

The tough part here is for long-time property owners. It doesn’t matter if your grandfather purchased the property for $2,500; if it will sell in today’s market for $100,000, then you will be taxed at that value.

But for most people, the increases were relative. Most assessments increased equally with their neighbors, which comparatively means that there was no change in the individual’s obligation toward a local town or school budget.

Maintenance

Burckard says the important thing is maintaining the accuracy of the tax rolls after a revaluation. While there may be some wide variations in value changes in the first year, if rolls are updated regularly, all will share equally in any subsequent market value changes.

In the case of a certified district like the Eldred Central School District, this is vital. If the rolls are not maintained, the state will de-certify the district and reinstitute its equalization formula.

Of immediate concern, Burckard said the school district must reaffirm the certified district as the new school year begins, so that the new formula is used in generating September tax bills.

After local and state certification, the only shifts in the tax levy will be supported by bricks and mortar development in either of the towns, Burckard said.