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SCHENECTADY
Valuation problems put city in hole
Assessment challenges result in overspending
BY KATHLEEN MOORE Gazette Reporter

    The City Council is poised to overspend its budget line for tax challenges Monday, as more and more residents prove that their properties are over-assessed.
    Mayor Gary McCarthy said the problem may force the city to make “internal cuts” to pay back the taxes of over-assessed owners.
    On Monday, the council plans to give more than $80,000 back to the owners of a medical building at 650 McClellan St. The city had budgeted to spend only $75,000 on all tax refunds this year.
    If the owners of the medical complex had paid every cent of their tax bills, they would be owed a $97,022 refund. They challenged the assessment of the property from 2007 through 2011.
    A city negotiator agreed to drop the assessment from more than $4.5 million to $950,500.
    The council will also vote Monday on eight other owners’ tax refunds, totalling $3,250, mostly for private residences that were overassessed. In each case, the owners fi led court documents to prove they could not sell their property for the amount the city said was fair market value. City attorneys recommended settling each case.
NO DEFENSE
    McCarthy said the city simply can’t defend its assessments, which were set in 2009 after a three-year study.
    “The problem is, the reality of it is the reassessment coincided with the peak of the [housing] market,” he said. “The market has declined.”
    That means the city is basing each owner’s tax bill on assessments that might not be accurate. It doesn’t mean owners are paying an unfair share of the taxes, McCarthy said. He explained that the assessments are equally wrong for everyone.
    “If your house is overassessed at the same rate mine is overassessed, we’re both paying our fair share of taxes,” he said.
    But as some owners challenge their assessments, he said, that fair-share theory falls apart. Once some owners move to the accurate value, everyone must — or those who remain overassessed will pay more than their fair share.
    “We’re now at the point where it’s out of whack,” McCarthy said. “The question is, how do we get back?”
    A reassessment would cost about $1 million and take at least three years, he said. By that time, the housing market could have changed again — leaving the new numbers just as inaccurate as the current ones.
    “The ideal thing is the assessor can update it on an ongoing basis so you can maintain something that’s fair and accurate,” he said. But since the roll is already skewed by some tax challenges, that job is getting harder.
“It’s a problem that we’re just going to deal with on an ongoing basis,” McCarthy said.
One of the city’s most vocal critics of the reassessment said the city doesn’t need to redo all of its work.
“If there’s been a 10 percent reduction, that affects everyone. Why go screwing around with valuation?” said Robin White, who owns apartment buildings in the Stockade. “The whole city’s gone down. Really, what needs to be done is have a fair assessment.”
    White said the problem is that the reassessment was done poorly, creating a situation in which some owners of similar houses had wildly differing assessments.
    “What happened in the last reassessment was buildings that had recently sold were [reassessed] based on the sales price, and buildings that hadn’t recently sold were reassessed on a different method. So there was tremendous inequity,” White said.
    White produced charts showing the problems when the reassessment figures were announced. He later won reductions in assessments for all of his buildings.
    McCarthy has also questioned the reassessment. On Friday, he offered a stinging appraisal of the entire process, which was handled by an assessor who has since left the city. ......................>>>>.....................>>>>.........................http://www.dailygazette.net/De.....r01101&AppName=1

sale price doesn't mean value.....we have lost the ability to value what is in front of us because the government keeps paying into the 'future pot' of itself...

dirty shame.....the future is coming

we cant afford ourselves.....just ask Moodys

The city/town officials don't care if the residents homes are over-assessed but sure hate it if they have to reduce assessments to make things fair.

Quoted from Shadow

The city/town officials don't care if the residents homes are over-assessed but sure hate it if they have to reduce assessments to make things fair.

agree......but who decides what's over assessed? all they have to do is change 1 number in their formula and we wouldn't know the valued result...

we must'attack' enmass and reassess

then get to the LEVY AND ALL THE CONTRACTS ATTACHED TO IT

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How property is assessed
The first step in assessing is to determine a property's market value. To estimate market values, the assessor must be familiar with the local real estate market.

A property's value can be estimated in three different ways:

Market approach
assessor compares property to similar properties that have recently sold
typically used to value residential, vacant, and farm properties
Cost approach
assessor calculates the cost to replace a structure with a similar one using today's labor and material prices
subtract depreciation
add the market value of the land
used to value industrial, special purpose and utility properties
Income approach
assessor analyzes how much income a property (such as an apartment building) will produce if rented
takes into account:
operating expenses
insurance
maintenance costs
financing terms
amount expected to be earned
Assessors also use Computer Assisted Mass Appraisal techniques to analyze property sales and estimate values for multiple properties simultaneously.

From market value to assessment

Once the assessor estimates the market value of a property, its assessment is calculated.

In a city or town assessing at 100% of market value, the market value becomes the assessment.

If assessments in your municipality are at a fraction of market value, the assessment is calculated by multiplying the market value of the property by the level of assessment for the municipality. For example:

Market value of property = $100,000
Level of assessment = 27% (City assesses property at 27% of market value)
Assessment = $27,000

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ow property taxes are calculated
You can calculate the amount you pay in property taxes by multiplying

your property's taxable assessment (your assessment minus any exemptions)

                                              X

the tax rates for school districts, municipalities, counties and special districts.


Tax Owed = taxable assessment x tax rate
Tax rates are calculated by local jurisidictions

There are several steps involved in determining tax rates:

Taxing jurisdiction (school district, municipality, county, special district) develops and adopts a budget.
Taxing jurisidiction determines revenue from all sources other than the property tax (state aid, sales tax revenue, user fees, etc.).
Revenues are subtracted from the budget and the remainder becomes the tax levy. The tax levy is the amount of the tax levy that is raised through the property tax.

Tax levy = budget - revenues
To determine the tax rate, the taxing jurisdiction divides the tax levy by the total taxable assessed value of all property in the jurisdiction.
Because tax rates are generally expressed as "per $1,000 of taxable assessed value," the product is multiplied by 1,000.

Tax rate per thousand (tax levy ÷ total of all taxable assessments in jurisdiction) x 1,000
For example:

Town A's tax levy = $2,000,000
Town's total taxable assessed value = $40,000,000
Tax rate = $50 per $1,000 of taxable assessed value
Tax bill for property with a taxable assessment of $150,000 = $7,500
To calculate tax rates for counties and school districts that cross over municipal boundaries equalization rates are necessary.

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Your tax bill can change each year due to changes in school district or local government:

budgets
revenue
total taxable assessed value
tax levy distribution among multiple municipalities
Changes in your assessment or exemptions can also impact your tax bill.

If you believe your property taxes are too high but your assessment is accurate, you should:

examine the scope of your taxing jurisdictions' budgets and expenditures
address your concerns to the appropriate forum, such as meetings of the school board, city council, town board, or county legislature.

grieving assessments is a 'quick' fix....but the LEVY AND THE COST OF SERVING OURSELVES IS WHERE THE MEAT IS.....

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Last time, they claimed how great it was, and some of the data was just inaccurate,” McCarthy said. “We were left with a roll that’s on the high side.”

Look at McC, a dem like the rest, trying to blame assessments that were "on the high side."    Stating a LIE rather than the TRUTH that MOST of the problem lies in the property values having plummeted because the dems have hiked taxes to almost the highest in the country in order to exempt the millionaires and politically connected from paying taxes, and because of he and his fellow dems REFUSING to cut spending on the wasteful things--like Proctor's, taxpayers funded bakeries, taxpayer funded gin mills, taxpayer funded gyms, taxpayer funded hotels, etc.  

At the SAME time, the dems decided to invent a new fee (trash) which they themselves only a FEW YEARS earlier and UNANIMOUSLY stated that a trash fee in the city would NEVER HAPPEN (that's when a republican mayor proposed it), then after they forcibly shoved the fee on the financially struggling homeowners--forcing the homeowners to PAY TWICE for trash collection-- and then increasing the fee twice in just a FEW YEARS!

At the same time, they were reducing VITAL AND NECESSARY services to the taxpayers yet they were giving MILLIONS in taxpayer paid "benefits" to the millionaires and politically connected downtown while the NEIGHBORHOODS--the places where the residents and taxpayers LIVE--were ignored, left to go down the drain.  

Now McC is putting on this show as you might call it, glaring headlines in the paper about code enforcement stuff.  The city needed code enforcement all along but the dems wouldn't spend the money on it -- instead they were giving that money out in tax exemptions to the millionaires downtown.   So now, while yes, code enforcement is needed, it's rather obvious that the poor financially struggling homeowners will be "charged" in the much the same way as the big time slumlords should have been charged.   The big time slumlords will be cited but since they don't fix their places up, the city will do some fixing up and/or financially penalize them--the cost will be added to the tax bill, but then, the money will never come in because the big time slumlords are tax delinquents and then they declare bankruptcy before their properties can be seized thanks to them (the slumlords) having the financial wherewithal to pay the finest lawyers.   Meanwhile, the average homeowners who have been saddled with the financial burden of paying not only their taxes but also the taxes of the downtown properties, these homeowners are people who ordinarily would keep their homes in tip top shape, but because the dems have been stealing money from them, they have no money to fix up their homes.  And now, they will be ordered to do so and financially penalized on top of that, especially if they can't get a loan to do the repairs the city orders them to do.

Then, on top of that, there is always the possibility that, because of the city's financial problems, that the city will cut back on code enforcement which will be a blessing for the financially struggling homeowner, but will leave the real problem properties owned by the big time slumlords still decrepit and the city will be back to square one--decrepit neighboring properties hurting the values of the good, but financially struggling over taxed homeowners.


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Quoted from senders

grieving assessments is a 'quick' fix....but the LEVY AND THE COST OF SERVING OURSELVES IS WHERE THE MEAT IS.....

Grieving assessments, yes, is a quick fix but only for the time until the city reassesses everything.   If 100 people grieve their assessment out of 20,000 property owners, and those 100 people are granted a reduction, then the other 19,900 will see their taxes in the following year go up more than would have otherwise increased.   If my taxes are $5,000 (which is calculated based on my assessment) and I grieve and win and my taxes in the next year wind up being $4,000 (based on the reduced assessment from my grievance), the city still needs to collect that $1,000.  It will do that via the tax rate and perhaps my taxes will then be $4,025 and every other owner's taxes will go up more as well -- and that would happen even with no change in the tax LEVY.

The tax LEVY is the amount that must be collected in property taxes in order to meet the revenue needs in the budget after all other revenue sources.   The city looks at what it wants in the next year's budget.   It knows it will get $X amount of money from the state, some other amount from federal sources, something from sales taxes, etc.   The city may factor into the budget $X amount of money from, say, building permits based on past years numbers.   And $X amount of money from marriage licenses.   And $X amount of money from copies of birth certificates.   If it's assumed that the amount of revenue needed from property taxes (i.e., the tax LEVY) is the last amount to be determined, then the city uses that dollar amount (the LEVY) and divides that amount by the Total TAXABLE Assessment Value of the properties in the city and that "division calculation" determines the tax RATE.    

Notice, I said LEVY divided by total TAXABLE Assessment Value.   That TAXABLE assessment value EXCLUDES the value of the tax exemptions on all the downtown properties (an exemption is the amount excluded).  In other words, we'll say that the money spent on downtown has resulted in the Total Assessment Value of the city increasing from 130 to 180   But since the exemptions are given to the downtown, the total TAXABLE Assessment Value becomes 135.   Try to follow this.   Let's say the tax LEVY is 10.   Remember the mathematical equation:   LEVY divided by Total TAXABLE Assessment Value equals tax RATE.   If downtown was NOT exempt from paying taxes, then the Total TAXABLE Asssessment value would be 180.   Thus 10 / 180 = .055.     But when because the dems exempt downtown from paying taxes, then this simple example says the Total TAXABLE Assessment Value is 135.   Thus 10 / 135 = .074.   In other words, the tax RATE is higher   Because the tax RATE is higher, the tax BILLS are going up too.   So SOME homeowners successfully grieve their assessments.   And then we'll say that in the following year the Total TAXABLE Assssment value has dropped to 120.   And for the sake of simple explanation, we'll say in making up the following year's budget, the city saw a big increase in fees from copies of birth certificates (because the 1940 census was made public and everyone wanted copies of their ancestor's birth certificates) and an increase in revenue from marriage license fees (because a bunch of gay couples got married) we'll say the tax LEVY in the following year is able to remain at a value of 10.   Now we have 10 / 120 = .083.   See now the tax RATE is going even higher even though the tax LEVY remains the same!

But let's suppose there was a big drop in fees for building permits (because home values have dropped, which means the homeowner's equity is lower which means the banks won't give as much of a home equity loan), using the simple example, we'll say that the city does NOT increase the budget by even one penny.  But because of the drop in feels from building permits, the tax LEVY amount will increase (to make up for the lost $ from fewer building permits).   Now we'll say the LEVY has a value of 12.   Thus 12 / 120 - .100.   See how the tax RATE is going even higher.

But let's say the tax LEVY is reduced to 9.   The tax RATE calculation is then    9 / 120 = .075.    Notice how the LEVY goes DOWN but the tax RATE goes up.   Now when the the city spends the taxpayers money on yet another hotel at ALCO location and exempts them from taxes, the property values plummet more, let's say to 115, then that reduction in the tax LEVY to 9 then produces and even higher tax RATE, and the math shows it:  9 / 115 = .0782    And THIS is what is happening with the school budget this year.   The news already reported a drop in the tax LEVY.  But the tax RATE will still go up.   And if you have not grieved your assessment value, then your tax BILL will go up.   If you do grieve your assessment and win, then the total TAXABLE Assessed Value might be reduced, say, to 114.   Now the tax RATE will be 9 / 114 = .0789   Notice I had to carry it to another decimal but it's still higher.  

And so, the school district will put it's budget to the voters proudly proclaiming that it's budget is well within the "tax cap"    The district will come out and tell voters that "tax increase is capped at 2% per state law" and that "we, the Schdy school district not only stayed UNDER the cap, but we REDUCED the tax"  And the city dems will be smiling thinking that Schenectady will be getting better because of the school budget being "so good" thanks to their dem buddy (governor) Andy.   But what will actually happen is that the tax BILLS will INCREASE!!!!    And the homeowners who vote on the budget believing there will be a savings, a reduction, will be so very surprised when they get the school tax BILL and see the big increase.   This very similar scenario happened in Albany (I think) schools last year, the news spoke of some increase, something like "2% increase" but the homeowners actually saw a much bigger "increase" in the tax BILLS.

So just remember when voting on school budgets that what they say, and what is printed in the news is very deceiving.   Each and every person who votes on the budgets should ask the district to state what the percentage increase in the tax BILLS will be.  

Using the above simple numbers, it is EASY to understand that the absolute MOST IMPORTANT thing that the dems  in the city MUST do NOW, is to remove all tax exemptions from downtown (and any other exemptions they gave out elsewhere in the city to their well heeled and/or politically favored people/businesses.   Just look above and see what the tax RATE was in the math above when the downtown properties do not have exemptions -- where the taxable value was 180.

And the other thing is that the LEVY is rather determined by the budget, i.e., by how much the city spends.   If the city reduced spending it will reduce the LEVY.   The city can reduce the spending by eliminating spending money on expensive cars for the higher level staff and the cops and fire fighters to take their daily pleasure drives far far far outside of the city.  Of course there are many other means to reduce spending, but that can be left for another thread.

It's OK if you need to read this over a second time   (of course, a cheerleader for increasing taxes wouldn't be able to comprehend this even after reading it 100 times)



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“If your house is overassessed at the same rate mine is overassessed, we’re both paying our fair share of taxes,” he said.

NNOOOOOOOOO.......it means you are both being unfairly OVER TAXED!!!!!


Is McCarthy playing with a full deck??? OMG!

Instead of reassessing every house why dosen't the city just drop all of the fees added to our tax bill ?

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“If your house is overassessed at the same rate mine is overassessed, we’re both paying our fair share of taxes,” he said.

Quoted from bumblethru

NNOOOOOOOOO.......it means you are both being unfairly OVER TAXED!!!!!


Is McCarthy playing with a full deck??? OMG!

Actually McC would be correct in that comment, sort of.

If you and I are the only two properties in the city, and you and I have exactly the same house and we are each assessed for 100,000, you and I would pay the exact same taxes.  If the value of our houses drops by 25%, and neither of us grieves our assessment, then you and I are each over assessed by the same amount, so we would still pay the exact same amount in taxes.

However, if I grieve my assessment and it is reduced to it's real value of $75,000 and you have not bothered to grieve your assessment, then you would pay higher taxes than me merely because the tax BILL is determined by "assessment value x tax RATE = tax BILL"    Remember, the tax RATE is not different from homeowner to homeowner.   It is the effect of my choice to grieve and the luck for me to win a reduction that reduces my tax BILL.  And in this example, you are paying more than your fair share of taxes, and I would be paying less than my fair share (as compared to you).

The next year, the city does a total reassessment (ok, McC says it would take three years to which I say BS).   And values have gone down even more (from when I grieved).   The outcome of the reassessment is that you and I each are assessed at $70,000.  You and I would have the same tax BILL.   However, in the first tax year after that reassessment, you would see a reduction in your tax BILL and I would see an increase in my tax BILL   (conditioned upon not much of an increase in the LEVY resulting from the city's spending choices in the budget).   But, the key point here is that you and I would once again pay the exact same tax BILL.

You see you I started with you and I were the only two properties in this city.   When there are 20,000 some odd properties and some people grieve and win, some people grieve and win something, and some grieve and lose, and some don't grieve at all, well that throws everything out of whack.   It would be more out of whack if, say, 9,000 homeowners grieved and won, and the other 11,000 didn't grieve at all.

If a reassessment did produce good results to begin with, AND IF property values dropped AND NO ONE grieved their assessment, then the city could possibly "reassess" the whole city by the same percentage amount -- IF all all areas of the city dropped in value by the same percent.   But that does not happen.   MP might see a 40% drop in value, the hill might see 50% drop in value, and upper Union St might see a 15% drop in value.

The bottom line is the city MUST remove the tax exemptions for downtown, AND it must cut spending while restoring previously eliminated VITAL services!


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the levy and the rate determine what a community wants to pay for this is where the meat is....being over/under assessed is a podium puck, albeit important to the equation

Quoted from bumblethru

NNOOOOOOOOO.......it means you are both being unfairly OVER TAXED!!!!!
Is McCarthy playing with a full deck??? OMG!

What else is new? The entire City is overassessed but the DEMS can't afford to do a reassessment. They gave the money to Proctor's and other nonprofits who refuse to pay a fair share PILOT. CUT SPENDING-CUT THE TAX RATE. Then everyone can pay less. Naah, not the right time, McCarthy has a new fee idea, they can make it up with Code enforcement fines-lol. The City is being driven into the dirt by DEM fiscal incompetents that keep borrowing to make ends meet. Maybe the Red Chinese will buy City bonds? lol

The METROPLEX/GILLEN seems to be the only game in town making lots and lots and lots of $$$$$$$$$$$!!!

Of course, it is extended to the select few who get their pockets lined with every new project that goes up!! The of course, theseproject are exempt from paying taxes.

The METROPLEX/GILLEN gets a 'you know what' every time a business is 'erected'. MORE SALES TAX MONEY FOR THEIR GREEDY EMPIRE!! While the residents are fleeing their homes in record numbers because their taxes are TOOOOOO HIGH!!! Although they were promised by the EMPIRE a decade ago that their taxes would be lowered!!! A MANIPULATED POLITICAL GREEDY LIE!