Assessment Strategy Could Help Families
While talking to voters the subject of property taxes has come up often. There also seems to be a growing trend of more people either keeping their jobs in NY and moving to nearby towns in Pennsylvania or Pennsylvania residents getting jobs in NY and staying in Pennsylvania. This is almost certainly a result of lower property and school taxes in Pennsylvania.
Many county officials are quick to put the blame on New York state and unfunded mandates. They are not wrong, yet I feel this tired excuse is used to justify inaction at the local and county levels.
What can we do?
Of course a hard look at the services local governments provide. Asking the tough questions of whether or not government should or needs to provide certain services. When the answer is “yes” how to provide the service as efficiently as possible. I trust this is what is happening during this year’s budget review at the Legislature and I hope to have a chance to participate on next year’s.
I have some ideas and I will outline one below dealing with assessments. There will be more to come in the following weeks and I welcome everyone’s input.
There is a wide range of real estate value in our county and I believe that is a good thing overall. People who can secure employment in our county have options in terms of housing and can invest in what they are able to afford. Many families that are young and often short on equity go after “fixer uppers” and finance these on 20 to 30 year mortgages because this is what they can afford. This is what me and my wife did when we bought our first home and if our children are fortunate enough to secure employment in this county this is a likely path for them.
Once you close and move in you get to work (as you can afford it) on the fixing up. This is often a combination of interior and exterior renovation and repair. What happens too often in the first 3-4 years is the property is reassessed. The renovation and repairs that your time and money went into results in the assessed value going up and in most cases your taxes.
I have talked to a number of people who want to build additions, out buildings, or other improvements to their property but aren’t for fear of higher taxes. Some of these people are considering selling and moving just over the boarder to Pennsylvania.
From what I understand the State has guidelines and recommendations for assessment but leave it up to the towns as to how often to reassess. There is a cyclical reassessment program in which the State will provide $5 per parcel in aid if towns participate. The kicker is that the towns must reassess every parcel every 4 years to be eligible. I believe this cycle is too short and it will keep many folks from improving their property to maximum of their assets and desires.
I proposed an assessment strategy in which properties are reassessed when they go on the market. When they are purchased on a mortgage or loan that assessment is locked for half of the loan term. After the midway point of the loan term, the property is reassessed at that point or during the next town wide reassessment. Maybe this could work in tandem with the cyclical state program. I’ve run this idea past a former assessor and they seemed to think it could work. I’m interested in hearing from some current assessors.
I’m certainly willing to make some adjustments. I think this could help people, especially young families, who invest in real estate make improvements without fear of higher taxes. Obviously the value of the property could increase dramatically after the midway point of the loan term but the owner will know it’s coming. Also if someone has been living and working for 10-15 years they are usually more financially stable and loan payments are going more towards principal than interest. There will also be a certain proportion of people who will sell their property before the midway point of their loan. Under this policy they are more likely to have improved the property in the time that they were there. When the property goes on the market the assessor will have a chance to reassess most likely in the positive direction. Over a few decades I believe this could lead to an overall increase in the average property value. If the cost of services do not increase at a higher rate than the properties do in value this could lead to a much better tax situation overall.
Gerrit Cain is a Kiantone resident who is endorsed by the Libertarian Party for the Chautauqua County Legislature seat in District 16, which includes Poland, Carroll and Kiantone.