In my opinion, The Town of Saugerties is, and
has been for a few years, illegally discriminating against certain
taxpayers. As we have for each of the last 7 years, we expect to take
this issue to court, and file suit against the town to try to correct
this.
The two issues are, first, discriminating
against new homeowners with the infamous "Welcome Stranger"
policy. This means raising the assessments selectively of homeowners who
newly purchase a home so the assessment becomes higher because they
purchased the home for considerably more than it's assessed value,
because that assessed value was set years ago when home prices were
lower. This is an issue that has gone all the way to the Supreme Court
and been declared unconstitutional.
The second issue is the town's setting the
equalization rate at 100% which is claiming (falsely, we have found)
that properties in the town are uniformly assessed at 100% of their
market value.
Of course, the town denies they do this,
claiming to do either a complete revaluation or a reassessment annually,
so they can claim the assessments in the town are at 100% of market
value. We did some research that shows this is far far from the truth.
We prepared a database of all homes sold through the Multiple Listing
Service in Saugerties during the year 2002. We tallied the selling
prices and the assessments for all those homes. The results showed that
the average assessment of a home sold in 2002 at the time it was sold
was 65% of the selling price.
Here's a typical example of what this means
for a property owner. I know a buyer who is purchasing a property for
$156,000. It is currently over assessed at $195,000. On the assumption
that the purchase price represents the market value, if the true
assessments and equalization rate were 100%, then one could argue the
assessment should be lowered to $156,000. The approximate annual
property taxes in Saugerties are 3.3% of the assessment, so the taxes
would be reduced from approximately $6,440. to $5,150. Here's the
problem: Since the true equalization rate is 65%, a fair assessment is
65% of market value, or $101,400. and a fair tax burden, $3,350.
Now New York State has a department called
the Office of Real Property Services (ORPS) that is supposed to oversee
the towns. Jim LaPlant from ORPS advised me that ORPS will challenge the
equalization rate in Saugerties, saying that "there is a large
discrepancy" between the 100% Saugerties claims and the truth. He
said that on April 24th 2003, a closely related metric, the
"residential assessment ratio," (RAR) was established by ORPS
to be 76.71%. This is in line with our research, the reason it is higher
than what we came up with is due to the fact that ORPS unfortunately
uses data from a period of time earlier than calendar 2002, so the data
is somewhat outdated, but it is still beneficial to the aggrieved
taxpayer compared to 100%, and according to Jim LaPlant, the RAR can be
used in the grievance process.
Unfortunately, ORPS
does not challenge and finalize the equalization rate until months from
now, sometime before the school tax bills go out in September, so that
number will not be available to taxpayers by grievance day, May
27th.
Andrew Peck May 3rd 2003
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