In New York State, most municipalities
collect taxes – for schools, towns, counties, and fire departments – based on
the assessed value of “real property” – i.e., real estate. The total budget
amounts are divided by the total non-exempt property assessments to determine
the tax rate. That rate is then applied to individual property values to
determine the total tax. (If a town
assessment roll is not at 100%, the applicable equalization rate is applied to
the taxable assessments as a part of the tax rate calculation.)
So what is the basis of assessed values? First, as you may
have read recently in a series of articles in the Democrat & Chronicle,
many properties are tax-exempt: parks and vacant land, properties related to
religious organizations (places of worship and houses for the “parsons”),
schools, and other non-profit organizations. In Brighton, roughly 20% of the
property base is wholly tax-exempt; these organizations pay zero taxes, unless
they negotiate something called Payment In Lieu of Taxes (which the University
of Rochester does).
There are currently approximately 9,000 single-family
residences on the Brighton tax rolls (other categories include multi-resident
complexes, commercial, and industrial). The Town Assessor, Elaine Ainsworth, is
charged with maintaining fair valuations on all of these properties – a
daunting task. Sales prices can certainly be an indication of value, but even
then, there can be extenuating circumstances that could cause that price to be
under or over the property’s realistic value. As new properties are built, and
properties are bought and sold, the Assessor attempts to keep the values in
line with the market, so that all taxpayers are treated fairly.
However, over time, assessed values can diverge from market
(although luckily, this is a pretty stable area), so the Assessor periodically
performs an Assessment Roll-Revaluation also known as Town-Wide Assessment Roll
Update or Assessment Equity Project (there is a balance of cost-effectiveness
and equity of the assessed roll, since a revaluation isn’t cost-free). For
several years, the assessed values equaled 100% of the market value estimate,
but over the past 3 years, they have diminished to 94% on the latest filed
roll--2016. This equalization rate is
set based on statistics the assessor receives from the state, and applies to
all classes of taxable properties (except condominiums, which fall under a
special tax law). You can see the effect of this on your tax bill, where your
assessed value is divided by the “uniform percentage of value used to establish
assessments,” to arrive at an estimated full market value. The goal, then, of
revaluation, is to reestablish parity of assessed and full market values. The
assessor cannot simply use the market value implied by the equalization rate,
since different classes of property (e.g., residential vs. commercial), as well
as different sizes/types of homes, or homes in different neighborhoods, might
not have changed proportionately.
Assessed values can sometimes change in between
revaluations, for example, when the Assessor is invited into a property, or
when a property is sold or has a change in use or has an addition of livable
square feet (usually detected through a building permit). The last time such a
revaluation was performed was for the 2008 Assessment Roll filed on July 1,
2008. The Assessor is now in the process
of conducting a new revaluation, which will affect the 2018 tax roll.
How does the Assessor perform the Roll-Revaluation? The
Assessor has hired a consultant to assist in updating and running the computer
models that will generate the new proposed values. She and assessment office
staff will review this information by neighborhood and in some cases by
property, pulling comparable sales values, when necessary, to finalize the
assessments. Commercial property owners will receive letters with their new
assessments around the end of June, and residential owners will receive theirs
around the end of November. The goal is to establish assessments that reflect
what could reasonably be expected to be received in a market sale. The Assessor
doesn’t know about condition issues on many of the properties, so homeowners
have room to contest their assessments.
And just because many property assessments may increase,
that does not mean that our taxes will have a corresponding increase. The
various taxing authorities’ budgets are determined independently of the
assessed values. So at least initially after the revaluation, the tax rate
should decline.
There is a lot of great information on the Assessor’s
portion of the Brighton Town website about the property tax cycle. And all residents
should get familiar with the Monroe County Real Property Portal (http://www.monroecounty.gov/etc/rp/)
by reviewing not just their own properties, but sales of similar properties, to
start thinking about what your property is worth. Many thanks to our Assessor,
Elaine Ainsworth, not only for the time she spent with me to help me understand
her department, but the effort she takes to oversee such a diversity of
properties and to ensure equity of our assessments.