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The Times
  • Five things to know about reassessments

  • The Little Falls Common Council Wednesday night conducted a public hearing on a possible reassessment of the city.

    “Personally, this is something I think should happen. I’ve been saying that since 2008 and now the city is closer to making it a reality,” Mayor Robert Peters has said.

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  • The Little Falls Common Council Wednesday night conducted a public hearing on a possible reassessment of the city.
    “Personally, this is something I think should happen. I’ve been saying that since 2008 and now the city is closer to making it a reality,” Mayor Robert Peters has said.
    While there is no timetable for when the reassessment would occur, Peters said the reassessment would be performed by the state and could potentially cost the city as much as $100,000. City Treasurer David Petkovsek has said the cost for the reassessment could be split over two years to prevent the city from “feeling the effect all in one year.”
    With the city in the process of determining whether a reassessment would be worthwhile or if it would hurt too many residents, here are five things to know about reassessments from the state Department of Taxation and Finance.
    What happens during a reassessment?
    The purpose of the reassessment is to ensure all properties are assessed fairly at a uniform level of assessment. To analyze the real estate market, the assessor will review recent property sales and other indicators. All assessments in the municipality will be reviewed to determine where assessments should be increased, decreased or remain the same. This may or may not include visual reinspection of some or all of the parcels. Mailers may be sent to homeowners asking them to correct or update the information on their property. Those whose assessments are adjusted will receive notification in the mail.
    Does New York state require reassessments?
    New York state’s Real Property Tax Law addresses the issue of assessment equality. While it doesn’t require assessments to be at 100 percent of market value, it does establish a standard that assessments be fair at a uniform percentage of market value.
    However, there is no statutory mechanism for enforcement or adherence to that standard. Employees of the state Office of Real Property Tax Services do consult with municipal officials and recommend steps to provide fair assessments, and the agency does administer state aid programs to provide incentives for reassessments. Beyond those steps, the role of the Office of Real Property Tax Services is largely an advisory one.
    Does my municipality collect more taxes if it does a reassessment?
    It is not uncommon to hear property owners complain that their city or town is updating their assessments just so it can collect more taxes. Actually, a cursory understanding of the municipal budget process would dispel this misconception.
    The assessor determines assessments. The assessor’s job is to make sure that all property owners are assessed fairly based on the market values of their properties.
    Months after assessments are finalized, school districts, cities, towns and counties determine how much they need to collect in taxes.
    Page 2 of 3 - You can think of the total amount of taxes collected by the city, school district or county as a pie. The assessor does not determine the size of the pie — that is the job of city and town councils, school boards and county legislatures. The assessor’s job is to ensure that the pie is cut up fairly — that taxes are fairly distributed based on current market values.
    When a reassessment results in increased assessments due to rising property values, tax rates should go down proportionally. This is because the tax levy is now being distributed over a broader tax base. If tax rates go up or stay the same, it simply means that municipal and/or school budgets are going up.
    If my municipality does a reassessment, will my taxes increase?
    A reassessment does not necessarily mean that your assessment or your taxes will increase. Furthermore if your assessment does increase, it does not necessarily mean your taxes will increase.
    A property’s assessment is supposed to reflect its market value. As market values increase or decrease and the assessments do not reflect these changes, some property taxpayers could pay more than their fair share of taxes, while others may pay less than their fair share. Reassessments are intended to restore fairness within the community.
    Sometimes the taxes will be shifted among types of property. What if all of the market values in a community increased since the last reassessment, but the value of brick houses had increased much faster than wooden houses? Then the owners of brick houses should pay a greater portion of taxes, while the owners of wooden houses should pay a smaller portion. This is one of the reasons that it is important for municipalities to conduct reassessments on a frequent basis. The longer between reassessments, the more likely taxpayers will experience dramatic tax shifts.
    In some cases during a reassessment, a municipality will go from a fractional level of assessment to 100 percent. If the original level of assessment was 10 percent, your assessed value could go from $9,000 to $90,000, and you might not see any increase in taxes. Of course, market values of properties also go down, which means that such properties should see a decrease in assessed values.
    Will my school district receive less state aid after the reassessment?
    No. The state aid to public education formula developed by the state Legislature uses a variety of factors to determine the amount of state aid a school district will receive each year. One of those factors is real property wealth, or the total market value of real property in the school district. The measure of real property wealth is not based on local assessments, but rather is determined by the state for each school district.
    Page 3 of 3 - In fact, in order to ensure the state aid formula is equitable for all school districts, it cannot be based on assessments. Since some municipalities have assessments that are up to date, while others may be as much as 100 years old, state aid based on those assessments would not be equitable. Instead, the state’s measure of real property wealth is used in the formula to calculate the state aid for each district.
    A similar myth exists around the misconception that the higher the equalization rate, the lower a school district’s aid. This is also incorrect, and no such correlation exists. Again, it is the state’s estimate of a district’s property wealth that is used in the state aid formula.

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