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Measurable economic indicator needed for taxes, says Colton resident

Posted 8/18/16

To the Editor: In response to “Taxing Times in Colton Due to Brookfield Revaluation,” (Aug. 10-16) I couldn’t agree more. While the author effectively addressed the issue of fiscal …

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Measurable economic indicator needed for taxes, says Colton resident

Posted

To the Editor:

In response to “Taxing Times in Colton Due to Brookfield Revaluation,” (Aug. 10-16) I couldn’t agree more. While the author effectively addressed the issue of fiscal irresponsibility within the town of Colton, I would like to add to that a discussion of the inequitable implementation of property taxes that overburdens residents as well.

Taxes, and the programs that they fund, should be directly tied to a quantifiable indicator of economic prosperity to ensure fair and equitable administration. For this reason, property is taxed.

When property values increase, it is indicative of an improved economic situation, and more funds are available for town and school programs. When property values are stagnant, or decrease, it is indicative of economic hardship, and therefore the programs funded by the taxes should adjust their budgets accordingly.

In fact, this is exactly how the pamphlet “Fair Assessments – A Guide for Property Owners”, published by the New York State Department of Taxation and Finance (found here https://www.tax.ny.gov/pdf/publications/orpts/pub1112.pdf) recommends property taxes be administered. The tax rate levied by towns and schools should stay the same each year, except in the case of exceptional circumstances, while the assessment of property values should be adjusted annually to reflect any shifts in the economic situation of the area. This ensures the tax rate is constant, and total dollar amount raised through property taxes is a reflection of economic vitality of the region. When times are good (rising house prices), the government has more money to work with, but when times are tight for residents (stagnant or decreasing house prices), the government must adjust their spending habits accordingly.

Instead, St. Lawrence County (Colton included) games the system by keeping assessments constant, and raising the tax rate each year in an effort to offset rising costs. While not technically illegal, this practice is not in accordance with New York State recommendations, and proves advantageous for the government, and consequently burdensome to the residents, for two reasons.

First, by increasing the tax rate, as opposed to the property assessment, tax rate increases are effectively divorced from any quantifiable indicators of economic growth in the area. This benefits the government and burdens the residents. If the tax rate is maintained constant but the assessment is raised, as recommended by New York State, residents have recourse by which they can argue home prices in the area have not changed, so why is my assessment changing? By keeping assessments the same, but raising the tax rate, residents are left with no recourse.

Second, by keeping assessments constant and raising tax rates, the local governments allow themselves to double-dip. This occurs as towns argue each year that inflation and rising costs in the area necessitate a tax rate increase, while keeping assessment unchanged. Then, every 5-10 years the town cries foul because home prices have not been adjusted to reflect rising home prices, and therefore, are severely under-assessed. Consequently, a new assessment is performed to adjust home prices to reflect rising prices. But, the effect of inflation was already accounted for with the yearly increase in the tax rate! Consequently, the government effectively doubles their revenue stream, and the residents’ tax bill is doubled.

As the writer previously mentioned, the main reason for this problem is the inability of administrators and elected officials to provide services within reasonable budgetary constraints. It is time to for residents to demand change and insist that local elected officials follow New York State property tax recommendations and cease to place burdensome tax liabilities on their residents.

This can be accomplished each year by: voting against any school tax rate increase; send the message that property taxes should be tied to measurable indicators of economic growth (i.e. home sales) and not the capriciousness of the administrators, and second; voting for elected officials that demonstrate a commitment to not simply maintaining, but decreasing tax rates to a reasonable level.

What is a reasonable level? Consider that according to US census data the average property value in the U.S. is approximately $190,000, and the average household property tax bill is $2,127 for an effective tax rate of 1.1 percent. How much are you paying?

Byron Erath

Colton