GLOVERSVILLE — Gloversville Assessor Joni Dennie told the Common Council Tuesday night the city’s equalization rate is dropping to 89%, making it the first time the equalization rate has dropped below 100% since 2008.
Dennie provided the council with a list of assessed property values compared to their recent sale price to illustrate the impossibility of preventing the drop in the city’s equalization rate. Dennie’s numbers showed in January that one apartment building assessed for $93,100 sold for $255,000 and a one-family home assessed for $86,100 sold for $225,000. In February, one city property assessed for $67,200 sold for $205,000. While she did not include addresses with her figures, she said the numbers explain why the drop in the equalization rate is unavoidable.
“You can see the disparity, and that’s what’s causing the rate to go down, because these sales are up here, and the assessments are down here, and I can’t change the assessed value based on a sale,” she said. “You have to change the entire city, if you’re going to change anything.”
A lower equalization rate will generally mean an increase in the county property tax rate paid by city property owners. New York state’s equalization rate formula attempts to measure the gap between the most recent property tax assessment of a parcel of land and the actual sale price of comparable pieces of land in the same area. The equalization rate formula is the system New York state uses to try to create a fair system for distributing the property tax levy burden equally across all of the properties in a given municipality.
Dennie said she normally files what’s called an “Early Level of Assessment (LOA)” with New York state in mid-February, and that “Early LOA” only factors in residential home sales, without considering commercial property sales or the sale of vacant properties. She said state officials at the New York state Office of Real Property Tax Services (ORPTS) recommended she include commercial sales this year to help keep Gloversville’s equalization rate a little higher.
“I didn’t know if my commercials were going to help me or hurt me this year, so I waited to get my commercials because my rep at ORPTS told me she thought the commercials would help me, just a tad, and they did, just a tad,” Dennie said. “The commercials helped the rate come up from 83.12% to 84.83%.”
Dennie said New York state’s equalization rate formula allows for an approximately “5% leeway,” which is what helped the city get to 89%.
When ORPTS released the “estimated overall” equalization rates to municipalities throughout New York state in February, it showed Gloversville would still have the highest equalization rate of any municipality in Fulton County, about 1% point higher than the city of Johnstown’s. Since then, Dennie said the Town of Bleecker is declaring it now has a 100% equalization rate.
“It depends on what they give Bleecker, Bleecker’s claiming 100%, if they give them 100% then I don’t know,” Dennie said as to where Gloversville’s equalization rate will fit in compared to the other municipalities.
One impact from the declining equalization rate will be the size of the basic and enhanced STAR school tax exemptions. For Gloversville property owners for the 2021-22 school year, the basic STAR exemption is $651 and the enhanced STAR exemption is $1,386. Dennie said as the equalization rate comes down, those exemptions will also get smaller.
Dennie said property owners in the city of Johnstown that are within the Gloversville Enlarged School District are eligible in the 2021-22 school tax year for a smaller basic STAR, $433, and a smaller enhanced STAR exemption, $964, than Gloversville property owners because the city of Johnstown’s equalization rate was lower than Gloversville’s for that tax period. She said the new equalization rates won’t be finally approved by New York state until likely sometime in the summer and won’t apply to school taxes until the 2022-23 school year billing cycle.
During the Common Council meeting, 6th Ward Councilman Wrandy Siarkowski asked Dennie when the last time the city had a complete revaluation of properties was. She said it was in 2008.
“That has to be done by an outside firm?” Siarkowski asked.
“We did it in-house in 2008 when Dorothy Parker was the assessor here,” Dennie said. “I was her clerk, and for the two of us it took us three years to do it in-house. We never got any aid from the state, but we didn’t charge anything for doing it; we did it while we were working.”
“Is there state aid available to get a re-assessment done?” Siarkowski asked.
“Yeah, but the chances of getting it are slim to none, from what I understand,” Dennie said.
Dennie recommended the council not support a revaluation at this time.
“We don’t know if the market is going to peak, and then come back down, or stabilize here,” Dennie said. “You don’t want to do a reval and then the market’s going to peak and then drop.”
Dennie said another factor to consider with revaluation is the New York state cap on STAR exemptions.
“As equalization rate comes down the cap on the STAR exemptions also comes down … but it can never come back up,” Dennie said, explaining that the STAR exemptions will not rise back up if the city’s equalization rate were to be raised back to 100% by a revaluation.
“That makes no sense at all, in my opinion,” Dennie said of the state’s STAR exemption rules. “You should start at square 1, if you do a reval. I just heard about that rule a year ago myself, from the Office of Real Property Tax Services in Albany. They’re the ones that make all of the rules.”