Reassessment 101:  Poison or prescription

By law, all real property in a town is to be assessed at a uniform percent of value.  In 1980, the Town of Riverhead performed a reassessment and put all assessments at 100% of market value.  Because the town has not performed subsequent updates, our uniform percent of value this year is down to 7.73% of market value.  What a difference 46 years makes.  However, not all properties appreciate and depreciate at the same rates.  The assessor’s job is to attempt to have assessments be uniform and equitable, in spite of legal limitations in trying to do so.  That’s where a reassessment comes in to play.

NYS Real Property Tax Law is based on an ad valorem system, which means, based on value.  It does not consider one’s ability to pay the taxes associated with that value.  That is where exemptions come in to play.  Different groups of taxpayers are offered tax breaks for various reasons, the most obvious being our senior population living on fixed incomes.  At its basic level, a reassessment will attempt to take information on what is known, and apply it town-wide against all properties using multiple regression models and other methods. Items taken into consideration include, but are not limited to, location, size and type of property, topography, proximity to roads, road frontage, size of structure(s), inventory (i.e., number of beds/baths/room count, quality of construction, age of the improvements, sales prices, income and expense statements, and a physical inspection of each property, inside and out.

The following information is from New York State’s website:

Reassessment and its effect on property taxes

Conducting a reassessment does not mean that your assessment or your taxes will automatically increase. Your taxes may increase, decrease or stay the same.

Over time, the market value of properties changes. The value of some properties may increase, while the value of some properties may decrease. Frequent reassessments ensure that your property is assessed based on current market values, rather than on market values from 20 years ago.

If your assessment increases, it doesn’t mean that your taxes will automatically increase. If the increase in your assessment is less than the average increase, your taxes will actually decrease. For example:

• if your assessment increased by 12%, and
• the average assessment increase was 15%, then
• your taxes will decrease (assuming your school and municipal budgets remain stable and the tax levies do not increase).

Reassessments don’t increase the amount of taxes that need to be collected by local governments

The assessor is not responsible for taxes – only for assessments.

Months after assessments are finalized by the assessor, taxing units (school districts, cities, towns and counties) determine the amount of taxes that a taxing unit needs to collect from property owners, this is known as the tax levy.

The property tax levy is determined separately from the assessments. The tax levy is then distributed over all taxable assessments.

If assessments increase, tax rates should go down proportionally. This is because the tax levy is now being distributed over a broader tax base. If tax rates go up or stay the same, it simply means that the municipality or school district is collecting more in taxes.

Put another way, if the total amount of taxes collected is a pie, the size of the pie is determined by city councils, town boards, school boards, and county legislatures.

The reassessment doesn’t impact the size of the pie; it just helps to ensure the pie is cut up fairly and that taxes are fairly distributed based on current market values.

To his credit, former Supervisor Phil Cardinale was the only Supervisor in my 39-year tenure to openly support a reassessment, but he had to quickly walk that back after receiving public criticism.  

If the Town Board decides to implement a town-wide reassessment, it must support and defend it 100%, regardless of the criticisms.  There will be cheerleaders and opponents.  Some people see it as poison.  If the town does not reassess all properties, then the repercussions of not doing so results in much of the tax refunds we are seeing today.  We cannot have it both ways.  We must choose our path… reassess or refund.  While a reassessment is not a guarantee of never having refunds, the distribution of the tax pie would be more equitable.

There is a general rule of thumb that, after a reassessment, one third of the property assessments go up, one third go down, and one third stay the same. In that scenario, two thirds of property owners should support such an action, having a neutral or positive outcome for them.  The question is… how are you affected, and are we, as a town, willing to take the prescription?

Laverne Tennenberg is chairman of the Riverhead Town Board of Assessors. She lives in Riverhead.