Trustees Ponder a Village Wide Reassessment

The number of real estate tax grievances filed in Scarsdale has reached a new high. According to the Scarsdale Village Assessor, 756 grievances were received this year, up from 551 last year. The challenges will need to be ruled on in the coming year and no one has provided the cost of dealing with all of these cases. However, the Village Assessors’ office, with a staff of 1.5 people has a Herculean task on their hands.

Why has the number of cases risen so dramatically? Since Scarsdale has not done a Village wide reassessment since 1969, there are many inequities among property assessments. In addition, the dip in housing values has highlighted these inequities and steep increases in real estate taxes have caused many to question their tax bills.

What can be done? John Wolham of the NYS Office of Real Property Services came before the Scarsdale Board of Trustees on Tuesday evening June 22 to educate and encourage the Scarsdale Board of Trustees to do a village wide revaluation of all properties. Since 2005 two thirds of communities in New York State have reassessed and Wolham presented the benefits of doing a reassessment which is a “comprehensive review of all properties in a community in which all assessments are set back to market value.” Furthermore, “the longer it has been since a reassessment, the more likely it is that some taxpayers are paying more than their fair share of taxes while others are paying too little.”

A reassessment has many benefits, including:

• Fairness: Every owner pays no more than their fair share of taxes
• Transparency: Taxpayers can understand the system
• Tax Neutral: The total taxes raised remains the same
• Reduced Litigation: Fewer law suits and challenges
• Economic; Helps bond rating
• Local Control: Eliminates impact of state equalization
• State Aid: Village would receive up to $5 per parcel each year the tax roll is at 100%

Wolham then showed what could occur without regular reassessments by giving an example of two homes:

He showed two houses built 40 years ago both assessed at $10,000. The first home now has a current market value of $1,000,000 and the second has a market value of $500,000. However, since there had not been a reassessment, both still had the same assessed value of $100,000 and therefore both were paying the same taxes, despite the fact that one home was worth twice as much as the other one.

Next he provided an actual example of two Scarsdale homes that sold within months of each other. They had comparable market values, but widely varying real estate taxes:

Location:              Stratton Road                           Penn Road
Sale Price:           $1,275,000                               $1,285,000
Assessed Value        $18,300                                    $26,000
Estimated R.E. Tax   $20,889                                    $29,679
Real Tax Rate              1.64%                                      2.31%

Though there are many misconceptions about its affect, a reassessment does not raise taxes, it simply redistributes payments more equitably so that homeowners pay taxes based on the current market value of their homes.

The trustees posed questions to Wolham. Trustee Jonathan Mark questioned how residents would perceive a reassessment. Given that the assessment will cost $1,700,000, which is about $275 per household, what benefits would taxpayers realize? After a reassessment, the experience has been that one third of taxpayers see no change, one third sees an increase in their tax and the last third gets a decrease. If this is the case, two thirds of the population sees no benefit and Mark questioned the economic rationale for the expense.

Trustee Richard Toder spoke eloquently on the fairness issue, saying that the revaluation is “the right thing to do.” He believed that after the reassessment lawyers would have reduced incentives to file tax grievances, as assessed values would be aligned with market values.

Trustee Miriam Flisser asked whether village surreptitiously raise taxes during a revaluation and was assured that this was not the case. She was told that the total tax bill is simply reallocated amongst taxpayers.

Trustee David Irwin asked if data was available from towns that have already undergone a reassessment. He wanted information on the number of challenges in the year after the revaluation and in subsequent years. This data would allow Scarsdale to do an economic analysis of the costs vs. expected savings.

Robert Berg, Chairman of the TVCC Revaluation Committee asked Village Assessor Nanette Albanese how many of the 551 grievances filed last year resulted in reductions to assessments. The answer was a surprising 90%, which leads one to wonder what will happen in the future if results are similar this coming year. As more grievances will result in even further reductions for some, those who do not challenge their tax bill will pay an increased share of the tax to fund the budget.

It appears that the Village may have no choice but to move forward to stem the tide of challengers. The Board will continue to examine the issue and would like feedback from the public. Please share your comments in the section below.