Gloversville’s equalization rate dropping from 100% to 89% for the 2022 tax rolls has resulted in a combined loss of $108,534 in property tax revenues for the city, county and the Gloversville Enlarged School District from the “special franchise” taxes paid by utility companies.
Mayor Vince DeSantis told the Common Council at its June 28 meeting that he will likely support a citywide property revaluation within the next several years in order to stop the steep losses in special franchise tax revenues and to restore greater fairness and accuracy for the property tax rolls.
“Because of the drop in the equalization rate to 89%, we can only tax those franchises at 89% of what they normally would be taxed, and that makes the difference,” DeSantis said. “The reason for the drop in the rate is that so many properties in Gloversville have been sold for so much more than what they were assessed for.”
Gloversville’s equalization rate has been dropping for the first time since 2008 due to the high volume of property sales, with prices often greatly exceeding the city’s property tax assessment for the property.
The tax assessment on a property does not change when it is sold, even if a home assessed for $80,000 sells for $200,000. New York state’s equalization rate formula is meant to measure the gap between the assessed value of properties and their sale price, in order to distribute the property tax levy burden as fairly as possible between all of the properties in a municipality, but the formula is imperfect.
All of the properties in Gloversville for the 2022 tax rolls will be assumed to be assessed at 89% of their true value, which means some property owners will pay more than they would if the equalization rate was 100% and some will pay less than they would if all of the properties were assessed correctly.
The mayor said he’ll likely hold off on proposing a property revaluation until either next year or 2024, because he wants to see if the real estate market cools off, or if the “new normal” will be for property in Gloversville to routinely sell for much greater prices than their assessed values. He said a property revaluation would most likely result in a significant property tax rate reduction for the city as a whole, with so many properties being assessed at much higher values.
“A revaluation makes it so it’s fair and equal,” DeSantis said. “We probably have to do one … or else our equalization rate will continue to drop.”
DeSantis said he knows many property owners who’ve owned their homes for a long time are often weary of property revaluations because they tend to significantly increase the assessed value of property, but he said most property tax bills should not change much because the tax rate would be reduced. He said some new property buyers are likely benefiting from a relatively-low property tax assessment, compared to the purchase price they paid, while older property owners may be paying a little bit more than their fair share compared to comparable properties recently purchased.
Gloversville Assessor Joni Dennie said she received the “Certificate of Final Special Franchise Full Value” report from New York state’s Department of Taxation and Finance Office of Real Property Tax Services on June 14 updating what’s called the “Final Full Value” for the property associated with each of the utility companies that run power lines, telephone lines, cable lines and fiber optic internet lines through Gloversville.
Dennie said that because the state updates the property values for the special franchise properties on an annual basis, the city can only tax those special franchise properties at the percentage of the city’s equalization rate.
These are the full value and taxable values for the four special franchise utilities in Gloversville:
• Niagara Mohawk (doing business as National Grid) — Full value $17.9 million, taxable value $16 million.
• Citizens Telecom Co. of New York — Full value $1.6 million, taxable value $1.4 million.
• First Light Fiber — Full value $62,772, taxable value $55,867.
• Time Warner of Albany — Full value $304,507, taxable value $271,011.
Dennie said the total value of the special franchise taxable property has dropped by a combined $2.2 million due to the drop in the equalization rate. She calculates the loss of tax revenue from the special franchises for the city for the 2022 tax rolls will be $42,392, for Fulton County it will be $17,153 and for the city school district — plus the public library — it will be $48,989.
“This isn’t just Gloversville, it’s everybody in Fulton County [that has declining equalization rates] except the Town of Bleecker, which managed to eke-out another 100%,” she said.
Dennie said the last time Gloversville did a revaluation it was done by herself and another city assessor, and the in-house citywide assessment took about three years. She said she’s going to retire in January 2023.
DeSantis said he’s been working with the Fulton County personnel department to find a qualified replacement for Dennie, which he hopes the city can hire a few months before the end of the year so Dennie can help train her replacement. He said it is his inclination that the city hire a private company to do the citywide revaluation, which he estimates could cost between $200,000 and $300,000, but would be completed in a much more efficient time frame than trying to do it in-house.