Tuesday, June 20, 2017

Property taxes: What’s fair?



A few weeks back I cut short a day of work to make the 5 hour round-trip to Bolivar in Allegany County to contest my camp’s assessed value during the town’s Grievance Day. Despite being on a remote seasonal road, a mile and a half from electricity, and having no structures on the land, my assessment doubled while the assessor estimated that my taxes will rise by more than half.

Last week, my travels and efforts proved all for naught: A care package came in the mail from Bolivar officials saying my grievance was denied and that they would stick with their initial findings. 

The frustration that I’ve had over this brings to the surface the vast unfairness that is inherent to New York’s property model. 

Spend some time mulling over these questions…

Why should senior citizens on fixed incomes who have been paying into the system their whole adult lives continue to pay high taxes for things they won’t use anymore, but once did and once paid for accordingly through taxation at that time?

In comparing properties of equal size, why should a childless couple pay as much as a family of four, when the family of four consumes far more in public services (especially public schooling)?

Why should someone who loves his home and wants to make it better with a swimming pool, patio or an addition have to suffer the consequences at reassessment and end up paying more in taxes than someone who left his land idle?

In rural locales like Niagara County, why should farmers carry the highest portion of the revenue burden just because they happen to own vast tracks of land? Are they receiving a proportionate amount of services?

Why should property owners pay so much for Medicaid (in most New York locales it’s 52 to 64 percent of the county tax) when it should be the obligation of the population as a whole to fund this forced benevolence deemed to be so necessary?

How is it just that municipalities and schools in Allegany County and the Adirondacks can reap revenues from who are basically absentee landowners living elsewhere (camp owners) who come to town just a few weekends and weeks a year and acquire almost no benefit from the taxes they’ve paid? Why should those non-resident property owners be excluded from having a vote in how their taxes are being used in the places where they are paying them?

Beyond those glaring displays of wrong, consider the very act of property taxation itself. You are led to believe – and even possess legal documents that show as much – that you own your property. You really don’t; ownership is only theoretical. It’s more accurately stated that you are renting the property from your local governments and school districts at a premium, because, if you didn’t pay your taxes it wouldn’t take long for that governing body to take that property from you --- even if the mortgage was fully paid-for. How is that fair? It would be no different than someone taxing your savings account – after all, it is property, isn’t it?

This travesty carries special meaning in New York State, where property taxes are 57% above the national average. Across America people think of their property taxes in terms of hundreds of dollars; here, we think of them in thousands of dollars.

Let’s look at one of the extremes. One of my clients from Tennessee pays a paltry $660 per year in property taxes for his 2,800-square-foot suburban new-build. In comparison, my coworker who lives in North Tonawanda has a similar home for which he pays $6,800 in taxes annually. We’re talking magnitudes of difference in taxes paid.

New York’s cure for this problem was not to cut property taxes, but rather to still allow them to grow, but only at a supposedly-stunted rate (the 2 percent tax cap). That’s still a princely sum: Crunch the numbers of what would become of your taxes after just 5 years of capped increases.

The extreme view would see property taxes abolished. We know that will never happen. But, a myriad of changes could be accomplished to mitigate the unfairness of property taxes in the Empire State. Just a few of those ideas discussed in this column over the past 12 years: replace the state’s Medicaid program with an HMO-driven voucher system; utilize clawbacks on businesses that break their promises to IDAs; utilize assessment caps and adjust assessments to true market value (how in the world did assessments go up during the Great Recession?); and add another 1 to 1.5 percent on sales taxes across the state to use a fairer consumption-driven tax to decrease property owners’ contributions to Medicaid.

Those are all common sense measures that could cut back on some of the unfairness and princely sums that are inherent to our property taxes. But, instead, it seems like the state legislature, Governor and local governments prefer to maintain that air of unfairness, taking advantages of citizens and businesses alike, further damning the once proud Empire State.


From the 26 June 2017 Greater Niagara Newspapers

No comments: