Local Government SnapshotSum - New York State Comptroller...April 2011. Local governments could save...

Realpropertytaxassessmentisanimportantfunctionoflocalgovernments.In2009,NewYork’scity,county,townandvillageassessingunitsspentnearly$132millionandemployedroughly1,350certifiedassessors,taxdirectorsandassessmentappraisers.1

AccordingtotheOfficeofRealPropertyTaxServices(ORPTS),NewYorkarguablyhasthemostcomplexpropertytaxsysteminthenation.2Moststateshavefewerthan100assessingunits;onlysevenhaveover500.NewYorkhasapproximately1,110.Localgovernmentsshouldexploresharingthisfunctiontoachievecost-savingsandimprovethequalityofassessments.

InarecentsurveyofelectedmunicipalofficialsinDutchess County, undertaken by Hudson ValleyPatternforProgress,thereappearedtobeastrongwillingnesstoconsidersharingoftheassessmentfunction. The majority of municipalities surveyed(18of30)wereeitheralreadyengagedinasharedassessingarrangementorwereplanningtodoso.3

Of the 1,110assessing units, 981are townsandcities,and2arecounties.Thereare127villagesthatalsoassesspropertywithintheirbordersforvillagetaxpurposes–creatingasecondassessmentoneach property within the village, because eachpropertyinthevillageisalsoassessedbythetown(or towns) or county in which the village lies forcounty,townandschooltaxpurposes.

Estimated Savings from Shared Assessing (Statewide Estimates, excluding New York City and Villages)More Conservative Estimate Less Conservative Estimate

Savings Costa Savings CostShareAssessors $2.7Million ShareAssessors $6.1MillionReduceCertiorari $5.1Million ReduceCertiorari $7.6MillionUpdateAssessments $4.3Million UpdateAssessments $4.3MillionEliminateDuplication $3.1Million EliminateDuplication $3.1MillionTotal $10.9 Million $4.3 Million Total $16.8 Million $4.3 Million Net Savings $6.6 Million Net Savings $12.5 Million aThecostfigureshownrepresentsthestatisticaldifferenceincostsformunicipalitiesthathavereassessedsince2005asappliedtothosewhohavenot.Itdoesnotrepresentthecostofreassessingproperty.

NEW YORK STATE OFFICE OF THE STATE COMPTROLLER

Di v i s i on o f L o ca l Gove rnmen t and S choo l A c coun tab i l i t y

Thomas P. DiNapoli • State Comptroller May 2011

Local Government Snapshot N Minimum Maximum SumStd.

DeviationAssessmentCosts_CY2009

57 0 25559000 53588418 #########

ValidN(listwise)

57

LGClassCode

AssCosts_09-

pluggedwith2008wherepossible

02 1426931203 6079762504 3122589Total 78189527

46% 60,797,625 Town41% 53,588,418 County11% 14,269,312 City2% 3,122,589 Village

131,777,945 Total

Descriptive Statistics

ReportSum

$61

$54

$14

$3

-

10

20

30

40

50

60

70

Town County City Village

Mill

ions

Town 46%

County41%

City 11%

Village2%

Assessment Costs by Class of Government (2009)

Note:ExcludesNewYorkCity

Reducing the Cost of Tax Assessment Through Shared Services

1Includesassessingpositionsforwhichcertificationisrequired.Doesnotincludevillageassessors,NewYorkCity,orsupportstaff.ORPTS,March2010.2 NewYorkStateOfficeofRealPropertyTaxServices,“ReformingNewYork’sPropertyTaxSystem”,www.orps.state.ny.us/reform/.3 ExaminingSharedServicesPotentialinDutchessCounty:ADiscussionBriefonMunicipalEfficiency.HudsonValleyPatternforProgress.April2011.

Localgovernmentscouldsaveasmuchas$12.5millionbyimprovingassessmentpracticesandsharingthisfunction,(totalsavingsof$16.8million,offsetbyinitialestimatedcostsof$4.3million).

MunicipalitiesonLongIslandandintheMid-HudsonRegionhadthegreatestoverallassessmentcosts,spendingmorethan$65.4million(nearly50percentofthestatewidetotal)ontheassessingfunction.

In 2009, New York’s cities, towns, villages andcountiesspentnearly$132millionassessingover4.6millionparcels.Onaverage,thistranslatesinto$28.53perparcel, rangingfrom$11.73perparcelinOneidaCountytoasmuchas$64.49perparcelinNassauCounty.Thevariabilityamongcountiesin the cost of assessment per parcel of propertyistheresultofmanyfactors,includingthenumberofassessingunitsandthequalityofassessments(seeAppendix1forassessmentcostsbycounty).

Ingeneral,assessmentcostsarehigherdownstate($34.70/parcel)thanupstate($25.59/parcel).Amongupstate regions, costs were highest in the NorthCountry($30.76/parcel)and lowest,onaverage, intheWesternNewYorkRegion($22.49/parcel).

Factors that Can Lower the Cost and Improve the Quality of AssessmentsIt is difficult to compare assessmentcosts across municipalities becauselocal conditionsand thequalityof localassessments differ. For example, atown with above average assessmentcosts may have just conducted areassessment or may be paying formore highly skilled assessment staff.To determine the net costs/savingsassociated with various assessmentpractices, we used a set of statisticalmodels to examine factors that affectassessment costs, while holdingconstant other quality factors thatalso affect costs. This methodologyseeks to determine the net effectsof different assessment practices onassessmentcosts.

New Yo r k S t a t e O f f i c e o f t he S t a t e Comp t ro l l e r

Local Government Snapshot

Note:Averageofcounties.Countyfiguresarebasedontotalassessmentexpendituresforthecountyplusthatofthetowns,cities,andvillageslocatedinthecounty.

$34.70

$25.59

$0.00$5.00

$10.00$15.00$20.00$25.00$30.00$35.00$40.00

Downstate Upstate

Overlapping Assessment Costs per Parcel for Upstate and Downstate Counties (2009)

Multi-Jurisdictional Assessingin New York State

Single Assessor

Multijurisdictional Assessor

Countywide Assessment

New York City

Shared Assessing

Based on data from ORPTS, roughly half of theState’s assessing units share an assessor with atleastoneotherassessingunit.Ouranalysisindicatesthat municipalities that share assessors saved onaverage7.2percent($2.05perparcel)inassessmentcosts.Thus, if municipalities were to move to a shared assessor model, savings could range from $2.7 to $6.1 million statewide.

Greater efficiency in operations is not the onlybenefittoberealizedbyutilizingasharedservicesmodel. By combining resources, smaller townsandvillagesmayhavethemeanstoutilizeamoreprofessionalized pool of assessors, resulting inimprovedqualityassessing.

Reassess Regularly

Manylocalgovernmentsdonotreassesspropertiesregularly.Localgovernmentswithoutdatedassessmentsaremore susceptible to lawsuits brought by property owners challenging their assessments (knownas taxcertiorari proceedings). If a taxpayer is successful in a tax certiorari proceeding, the taxing jurisdictionwillusuallyberequiredtoissuerefundsofexcesstaxescollectedduetotheerroneousassessment.Inmostcases,court-ordered assessment reductions and settlements of tax certioraris result in a shift of the property taxburdenontotheremainingtaxbase,leadingtohighertaxbillsforallothertaxpayers.

Nearly 70 percent of cities and townshave reassessed since 2000. However,12 percent have not reassessed sincethe 1970s or earlier. While reassessmentincreases costs in the short-term, thesecosts can be offset by reductions in thenumber of assessment challenges. Basedonacounty-levelanalysis,countieswhere90percentormoreofthecitiesandtownshad reassessed since 2005 had roughly4 tax certiorari proceedings per 10,000parcels. However, in counties where only50percentorfewerofthecitiesandtownshad reassessed since 2005, the numberofproceedings increased to18per10,000parcels—afour-foldincrease.4

4 ThemapabovewasobtainedfromtheORPTSwebsite:www.orps.state.ny.us/assessor/resources/reassessmentActivity.cfm

New Yo r k S t a t e O f f i c e o f t he S t a t e Comp t ro l l e r

Local Government Snapshot

12%5%

14%

69%

0%10%20%30%40%50%60%70%80%

1970s/Or Earlier

1980s 1990s 2000s

Cities and Towns by Last Reassessment

Statewide,therewereover15,000taxcertiorariproceedingsin2009—anincreaseof12percentfrom2008.Over85percentofthe2009totalareinthedownstatearea.TheLongIslandregionhasadisproportionatelyhighpercentageofcases—with58percentof theState’scertiorariproceedingsandonly22percentof theparcels.Withmorethan87casesper10,000parcels,assessmentchallengesintheLongIslandregionoccurmorethantwiceasfrequentlyasthestatewideaverage.

Basedonouranalysis,everytencertioraricasesper10,000parcelsaddanadditional4.1percenttothecostofassessment.If the counties with above average rates of certiorari cases could reduce their number of cases by a half or even a third, substantial savings could result—estimates range from $5.1 million to $7.6 million statewide.Thisisaconservativefiguresinceitmaynotincludealloftheadditionalcostssuchaslitigationfees,appraisalcostsandotherfeesassociatedwithdefendingtaxcertioraricases.

Reduce the Number of Assessing Units

Overthepast17years,manyvillageshaveterminatedtheirstatusasassessingunits,optinginsteadtousetownandcountyassessmentrolls.Only127ofthe555villagesinNewYorkStateretainedtheassessingfunction.Ifthesevillagesweretousethetownassessments,ratherthanconductasecondassessment,villagescouldsave$3million.LongIslandvillagesaccountfornearly$1.76million(56percent)ofthestatewidevillagetotal.

New Yo r k S t a t e O f f i c e o f t he S t a t e Comp t ro l l e r

Local Government SnapshotLocal Government Snapshot

Number of Tax Certiorari Cases by Region (2008 and 2009)

Region

Tax Certiorari Cases Certiorari Measures

2008 2009Percentage

Change in Cases 2008-09

Percentage of Cases in 2009

Percent of Parcels

in 2009

Cases Per 10,000

ParcelsCapital Region 486 650 33.7% 4.3% 10.5% 13.4Central NY 230 265 15.2% 1.7% 7.4% 7.8Finger Lakes 268 275 2.6% 1.8% 10.6% 5.6Mohawk Valley 114 131 14.9% 0.9% 5.3% 5.4North Country 150 146 -2.7% 1.0% 5.5% 5.7Southern Tier 205 258 25.9% 1.7% 8.0% 7.0Western NY 340 534 57.1% 3.5% 13.9% 8.3Long Island 8,304 8,790 5.9% 57.7% 21.8% 87.3Mid-Hudson 3,562 4,178 17.3% 27.4% 17.1% 52.9Total 13,659 15,227 11.5% 100.0% 100.0% 33.0Source:OfficeofRealPropertyTaxServices

New Yo r k S t a t e O f f i c e o f t he S t a t e Comp t ro l l e r

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Appendix 1: Overlapping Assessment Costs Per Parcel by Cost Category

CostRange County

TotalAssessment

Costs Parcels Cost Per Parcel

Nassau $27,264,619 422,748 $64.49Orange $5,296,657 138,177 $38.33Westchester $9,392,167 257,429 $36.48Schuyler $458,605 12,839 $35.72Ontario $1,727,142 48,830 $35.37Putnam $1,518,037 43,283 $35.07Seneca $623,983 17,887 $34.88Essex $1,371,773 39,442 $34.78Wayne $1,488,520 43,389 $34.31Clinton $1,279,234 38,249 $33.44Saratoga $3,179,843 95,271 $33.38Rockland $2,923,819 88,315 $33.11Hamilton $425,349 13,339 $31.89Cayuga $1,249,559 39,482 $31.65Jefferson $1,789,914 57,248 $31.27Schoharie $704,554 22,744 $30.98Cortland $684,545 22,376 $30.59Columbia $1,071,183 35,944 $29.80Ulster $2,578,546 87,069 $29.61Yates $466,428 15,812 $29.50Cattaraugus $1,497,944 50,974 $29.39St.Lawrence $1,929,175 66,012 $29.22Steuben $1,617,874 55,624 $29.09Dutchess $3,146,623 109,740 $28.67Franklin $894,103 31,213 $28.65Genesee $804,967 28,521 $28.22Herkimer $1,154,667 41,531 $27.80Lewis $649,729 23,886 $27.20Sullivan $1,758,776 65,891 $26.69Livingston $763,949 28,860 $26.47Rensselaer $1,591,951 64,880 $24.54Tompkins $845,975 34,513 $24.51Warren $1,086,528 45,729 $23.76Delaware $1,021,841 43,373 $23.56Wyoming $555,984 23,764 $23.40Greene $888,454 38,218 $23.25Monroe $6,025,473 262,890 $22.92Allegany $770,556 33,808 $22.79Niagara $2,134,567 93,897 $22.73Washington $790,896 34,792 $22.73Albany $2,511,463 110,984 $22.63Schenectady $1,300,765 58,281 $22.32Broome $1,861,136 86,156 $21.60Chautauqua $2,003,088 93,665 $21.39Onondaga $3,792,556 180,732 $20.98Oswego $1,247,423 59,717 $20.89Chemung $822,322 39,521 $20.81Orleans $413,040 20,466 $20.18

Overlapping Assessment Costs Per Parcel by Cost Category

Over$30/Parcel

Over$20/Parcel

Madison $752,993 37,451 $20.11Suffolk $11,563,944 583,685 $19.81Fulton $667,967 33,914 $19.70Chenango $623,465 31,909 $19.54Otsego $735,664 39,467 $18.64Montgomery $463,072 25,626 $18.07Erie $5,949,289 368,215 $16.16Tioga $401,775 25,698 $15.63Oneida $1,243,474 105,965 $11.73

Total $131,777,945 4,619,441 $28.53

Over$10/Parcel

Note:Overlappingassessmentcostswerecalculatedbysummingtogethertheassessmentcostsreportedbythecounty,andtheassessmentcostsreportedbytowns,citiesandvillageswithineachcounty.Thenumberofparcelsisacountywideparcelcount.Threecounties(Oneida,ErieandRockland)didnotreportassessmentcosts.

New Yo r k S t a t e O f f i c e o f t he S t a t e Comp t ro l l e r

Local Government Snapshot

New York State Office of the State ComptrollerDivision of Local Government and School Accountability110 State Street, 12th Floor • Albany, New York 12236

w w w . o s c . s t a t e . n y . u s May 2011