Viewpoint: Sure property taxes are high, but should you grieve?

Karen Rubin
Karen Rubin, Columnist

“You have nothing to lose!” the email solicitation goes. The TV commercial goes like this: “Everybody on Long Island should grieve their property tax and do it every year.” The phone call to one of the many tax reduction services begins this way, “Every Nassau County resident should grieve and do it every year.”

Why are people so anxious to grieve? Is it because there’s no reason not to? By endless ads, mailings by “property tax specialists” who only get paid (a percentage) if they win reduction?

By county legislators who use their advocacy (of tax grievance) to put themselves on their constituents’ side? By the county which sets up school districts (which account for two-thirds of property tax levy) as the bad guy, encouraging resentment? The county makes it extremely easy to file, it doesn’t cost anything (the services take up to 50 percent on what is won) and you can’t be reassessed higher, so why not?

I think it is because promoting tax grievance foments distrust and resentment for government and for neighbors who grieve every year and win their reduction which those who don’t grieve wind up paying for. Because paying taxes is paying to ourselves for the services that make living here possible, even wonderful – the schools, parks, libraries, roads, water, sewage, sanitation, police. And if you follow how the budgets are prepared, how dollars are spent and how revenue is raised, you should have confidence that every tax dollar is worth it. We know what property taxes are when we purchase our homes, and we still do.

But we want to pay a fair share. And that’s where confidence in the assessment and collection system comes in.

The New York Times recently ran a column that was quite an indictment of how property taxes foment the inequality between rich and poor, suggesting that rich people’s homes are undervalued for the purpose of assessing tax and poor people’s homes are overvalued. What it failed to take into account is that there is also a difference between how much commercial property tax a community might have which mitigates the amount of tax an individual homeowner would pay – rich neighborhoods like Great Neck and Manhasset have more commercial property than Roosevelt.

Also, that almost two-thirds of property tax bill goes to schools, budgets which are local to that community – Great Neck must raise 95 percent of its school budget from property tax while Roosevelt gets 50 percent of its school budget paid for by state aid, which is how the state equalizes the disparity in commercial tax.

If people honestly believe they are unfairly valued, they have every right to grieve (the deadline for Nassau County was extended to April 30).

Sometimes it is valid to grieve the tax assessment – after all, it is based only on a cursory look outside, not inside, so is really difficult to accurately say what the “fair market value” of that specific house would be.

What is more, the property value is very individual to circumstance, so the “fair market value” depends on a host of factors – comparable sales in the neighborhood, for example.

So yes, nothing to lose by grieving. Nor does the government lose, because that total amount of the tax pie – its budget – simply is made up by a higher share being paid by those homeowners who didn’t.

This little cycle was in force, especially during the Mangano decade, when there was a free-for-all where property values were frozen despite rising home values, yet almost anyone and everyone who grieved their assessed value won a reduction.

In the last year of the Mangano administration, 218,000 filed grievances (out of 386,571, two-thirds of property owners), with 203,000 getting offers to settle – so more than 90 percent.

The result: those who grieved shifted the tax burden to those who didn’t, who wound up paying more than their fair share.

Meanwhile, commercial properties that won reductions chalked up $300 million in tax certiorari liability for Nassau County– one of only two in New York State which is responsible for assessment and therefore paying out refunds – which, ironically, pushes up all of our property taxes.

That’s changed now.

The Curran administration did a fair-market value reassessment and last year, out of 236,000 grievances filed, instead of a virtually automatic reduction, only 61,000 won reduction and the average reductions were relatively low.

An average homeowner who grieved their assessment might win a $1000 reduction in property tax, but if one of the tax reduction services was used, that amount would be shaved to about $500.

That, says Robert Miles, deputy assessor and counsel, is evidence by an objective third-party that the assessment was fair. “An independent commission said it was accurate.”

“That’s a good thing. Homeowners should be happy that first round of reassessment gave us an accurate assessment. In the future, the administration’s goal will be to continue to improve the assessment system, continue to provide accurate assessments to bring equity to the county.”

There has to be confidence in the “fair market value” assessment.

First some understanding of what property tax assessments represent: unlike income taxes where you pay a percentage to the government, property tax assessment represents your piece of the tax pie to pay the amount that the taxing authorities – schools, parks, libraries, roads, sewage treatment, water – say they need to operate.

It doesn’t matter if your home is assessed at $800,000 if the rest of “comparable” homes also are assessed at $800,000 and the valuation goes up to $1 million if those other comparable properties also go up that amount. In fact, if the total property valuation for a district goes up, that expands the total tax pie to share the burden of paying for schools, parks, libraries and roads so your bill may actually go down as the community’s valuation goes up.

So even in an affluent district like Great Neck, with outstanding schools that have kept our home values high, our tax rates are 57th out of 62 school districts, at 1718.22 (per assessed value), compared to 3688.069 for Hewlett-Woodmere.

Also, taxable value can be different from the “fair market value” because of various exemptions – such as veterans, seniors, Enhanced Star, disability, first responders.

The “fair market value” also doesn’t necessarily reflect the actual purchase price of your house because there are any number of factors that go into a sale, even an arm’s length sale, so a new owner will not be assessed based on what they paid.

And there are caps on how much the assessment can be raised in a given year, 6 percent, or 20 percent over five years.

To preserve confidence in the assessment of “fair market value,” the county has decided to freeze the assessed value of homes to last year’s level because of the extraordinary bump in prices due to the coronavirus pandemic (fleeing New York City apartment dwellers to the suburbs) creating a high value but low supply of properties available. At the same time the value of commercial properties – so important to keeping residential taxes down – sank.

“We don’t want to value properties in such a chaotic year,” Miles says, “We are seeing life come back and the market stabilize a bit, hopefully on commercial end. We want more stability.”

Reassessments should take place regularly – every year or every three years – so that taxpayers see “fair market value” assessments as standard practice, that the assessments are accurate and everyone is paying their fair share. “That will discourage grievances.”

Share this Article