Scarsdale Forum Recommends Village Wide Tax Revaluation

The Scarsdale Forum will discuss their recently released report on a town-wide tax revaluation at a meeting on Thursday night November 18 at the Scarsdale Library at 8 pm. Their Assessment Revaluation Committee as well as a panel of experts will be there to lead a discussion on revaluation.

The panel will include:
John Wolham, Director, Southern Region, NY Office of Real Property Tax Services
Mary Marvin, Mayor of Bronxville
Steve Altieri, Town Administrator of Mamaroneck
Alfred A. Gatta, Village Manager of Scarsdale

Robert Berg, who served as Chair of the Assessment Revaluation Committee for the Forum will lead the discussion.

The Forum studied tax revaluation in response to a request by Mayor Carolyn Stevens in 2009. Their 22-page report offers background and history on property tax and covers New York State law and Scarsdale’s history of revaluation.

The last revaluation in Scarsdale was done 41 years ago in 1969, when Sal Horowitz Jr. was the Mayor, and there are now substantial inequities in the tax assessments of comparable properties. According to the report, since “property taxes within Scarsdale are a zero sum game,” owners of underassesed properties are being subsidized by their neighbors, who are paying more than their full share of the tax burden.

Since Scarsdale property tax are among the highest in the country, the committee favors rectifying these inequities through a revaluation.

In their report they recommend that:

• The Village should conduct a full-scale reassessment as soon as possible
• The Village should reassess periodically, with no more than four years between assessments
• The Village should issue an RFP to seek out an appraisal firm to conduct the reassessment within 60 days.
• The process should be as transparent as possible
• Residents who face hardship due to a tax increase should be encouraged to apply for STAR exemptions
• Scarsdale should lobby the state to enact a statute that will allow for deferred tax increases until a property is sold
• Scarsdale should not phase in tax increases or allow transition assessment as these prolong inequalities.

The report offers a very thorough recap of the history of property taxes and a review of what neighboring towns have done. Since New York State does not mandate revaluations, only three municipalities in Westchester have conducted revaluations recently. They are the Town of Rye, the Town of Pelham and the Village of Bronxville. Some of our neighbors’ assessments are even more antiquated than Scarsdale’s; for instance the last time the City of Mt. Vernon was revalued was 1853.

The report also reviews several current real estate listings to demonstrate how older homes may be under-assessed. For example, the large home on the duck pond in Heathcote that sits on 3.73 acres is now on the market for $5.35 million and it’s current assessed value is $42,900, translating to a tax bill of $52,014. Using the current market value of the property, the assessment should be $94,160 with an annual tax bill of $118,000.

Owners of another Heathcote estate listed for $11.5 million now pay a tax bill of $89,170 and if the house is valued at $11.5 million the tax bill for the property should be $250,000. In contrast, a new home built across the street has been assessed for $144,135 which would translate to a tax bill of $175,000.

These inequities also exist for the tax assessments of more modest homes though examples were not provided in the report.

The report covers the history of tax grievances in Scarsdale and sites the rising number of grievances filed in recent years. During the 1990’s the number of grievances ran between 75 and 100, but by 2010, 756 grievances were filed due to inequities and falling market values. The report estimates that all the property owners who grieve their taxes in total may pay several hundred thousands dollars for appraisal, attorney and filing fees. And the cost to the Village is high as well. In 2010, the Village spent approximately $155,000 defending 551 challenges to the 2009 tax roll and in 2010 the tab for the Village rose to $212,000.

Furthermore, 90 percent of tax grievances result in reduced assessments, with some of these reductions ranging from 20% to 35%. These reductions will cause others to pay even higher real estate taxes.

Given the costs to homeowners and the Village and the basic inequities in the system, the Forum recommends that the Village conduct the revaluation for many reasons:

• Equitable distribution
• Transparency
• Reduction of tax grievances
• Correction of inequities between Scarsdale properties and those in the Mamaroneck Strip.
• Maintenance of favorable bond ratings
• Elimination of reliance on the state equalization rate
• Eligibility for a small state subsidy if village adopts plans for cyclical reassessments

Learn more at the meeting of the Scarsdale Forum on Thursday November 18 at 8 pm in the Scott Room of the Scarsdale Public Library.

Thanks to committee members: Robert J. Berg, Chair, Robert Harrison Boine Johnson L. William Kay, III Kenneth Keats Edward A. Morgan and Douglas Ulene.