Morning Read: Are North Country property tax assessments too high?

The Watertown Daily Times is reporting that Jefferson County is being forced by court order to pay back roughly $50,000 in property tax revenue.

The reason?  They overvalued assessments for 39 property owners, occasionally by millions of dollars.

The biggest-ticket item is The Edgewood Resort, 22467 Edgewood Road, town of Alexandria. State Supreme Court in Jefferson County agreed to the property’s assessment drop from $8,237,825 to $5,400,000.

In some cases the court found that the assessor got the property value wrong by more than 40%.

I include this as a Morning Read, because soaring property values have been a big engine driving growth in local governments and school spending over the last decade.

So far, despite the collapse of the housing bubble, we haven’t seen those numbers drop much.

But at a time when the state is curtailing local government aid, and considering a property tax cap, we could also see a serious decline in property values, as lower sale prices continue to nudge assessments down.

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31 Comments on “Morning Read: Are North Country property tax assessments too high?”

  1. tootightmike says:

    An army of assessors has been trying to get it right for years, and while the process may be flawed, the idea of a fair re-assessment is a worthy goal.
    State and Federal mandates have forced the school districts into spending beyond local means, and spiraling health care costs only send our hard earned tax dollars to the insurance industry in another state. The schools around Hartford are probably very, very nice.
    We will have to pay taxes, that is certain, but we need to keep that money and control closer to home.

  2. tourpro says:

    If the taxing-assessing entities were obligated to purchase property at the assessed value, then these rates would become more realistic.

  3. Walker says:

    Tourpro, you want your tax dollars used for this?

    The stories that stand out in my memory relating to assessments are those where the owners of lake shore property successfully sued to have their assessments lowered, and then sold the property for more than the higher assessment.

  4. It's All Bush's Fault says:

    I am not one to defend the assessors, but assessments are not going to drop if the market continues to be stable or increasing. Property values in this area are still very affordable in comparison to other areas. You can always count on some outsider purchasing waterfront or rural property for 3X and 4X the real north country value.

  5. My tax assessment is less than I would ask if I were selling (no, I’m not about to complain). I know others who think theirs is too high. I see some homes listed for sale where the property taxes nearly equal what the monthly mortgage payment would be. Value is what someone is willing to pay and when a property isn’t for sale that is really just a guess, sometimes an educated guess but still a guess. I really wish they would find a better way to raise the funds for schools and other local services. Property taxes can unfairly hit retired people and those who inherit a home that they could not otherwise afford.

  6. phahn50 says:

    My tax assessment is about 20% above value (based on nearby property sales and bank assessments for refinancing). I grieved it once and got a 10% reduction. I am told that some people (friends?) are under-assessed and to make up for it they overassess everyone else and raise assessments yearly by an unrealistic percentage. But new owners pay actual market value which means they pay lower property taxes than their neighbors whot have been living in their houses for a long time. Its a weird system.

  7. phahn50 says:

    If everyone were assessed the same percentage too high or too low it wouldnt matter.

  8. Bret4207 says:

    Seems to me it’s a game where the assessors are given a target number and the are tasked with finding the money. That may be a bit simplistic, but not by much. When the assessors simply can’t come up with enough the rate goes up.

    Spending folks, mandated or not, is driving this.

  9. Pete Klein says:

    phahn50 is correct. The assessments don’t matter. Assessments are just a tool to divide the pie.
    It should be a criminal offense when someone fights and wins a lower assessment, then sells the property for a high price within 12 months of getting the assessment lowered.
    Maybe a fine twice the difference between the assessment and the selling price?

  10. BRFVolpe says:

    Taxes are based on assessments, not – as the headline states – appraisals.

  11. phahn50 says:

    BRFVolpe has a good point. “soaring property values” shouldnt make any difference to tax assessments, except to the extent that some properties soar more than others. If lake-front properties become much more valuable relative to other properties, their owners will end up paying a larger share of the taxes. Total tax payments received by the local government wont change.

  12. Brian says:

    The reality is that overall assessments of property in the North Country — particularly in the Adirondacks — rose by hundreds of millions of dollars over the last twenty years.

    This affected resort properties, and more mundane local residences.

    This occurred during a time when many local governments were expanding their payrolls and services, and their overall tax levies.

    If we discover that these assessments are out of sync with actual market values, then the impacts on governments and taxpayers will be significant.

    In the case cited by Watertown’s newspaper, exaggerated assessments will cost Jefferson County $50,000 in revenue.

    It’s also true that if certain property values decline sharply (say, watertfront or resort properties) then more of the total levy will have to be be shifted to other homeowners — or the levy will have to be reduced.

    –Brian, NCPR

  13. jeff says:

    Doesn’t matter what the assessment is, as long as it is comparable to similar properties. It is hard to compare oddball properties when assessment districts are small.

    A piece of farm field across the road from me was sold for a building lot. That farmland sold for 14 times its assessed value….. My half acre of vacant land bounded on two sides by roads and the third by a creek and traversed by two utility lines was assessed at the same rate as that lot. The assessor agreed with me that given the rights of way the land was not a building lot so I got the field rate.

    If values go up, tax rates should go down IF we are not asking for more government& school expenditures. The local school has gone gaga. Running track like Saranac Lake. New sports field cause the other had no field house. Necessary?

    We should not be doing spot assessments- re-assessing when a property changes hands or only reviewing part of a district at a time. Contract with an outfit to do a reassessment of the whole county periodically. It is done in Pennsylvania.

    Over here our values are in the Fort Drum bubble. Up on the river they are in the river bubble which is being deflated by the wind tower movement. I think the Adirondacks values still reflect the growth from the 90′s which was recovering from the recession of the 80′s.

  14. Concerned says:

    Assessed value does not drive up taxes. Local government budgets drive up taxes.

    Phahn and Pete are correct that the important point is that everyone should be assessed at the same percentage of value – what ever that is. (It’s not an easy thing to do).

    The troubles Brian M started out talking about are the effects of unequal or erroneous assessments. When those errors get corrected, others have to make up the difference. But to say that higher assessments mean higher over-all property taxes is just incorrect. If everyone’s assessment went up the same amount, the tax rate would go down and our taxes would remain the same, given the same government budget.

    The total amount of tax required is based on what our government spends, not on the total assessed value.

  15. Jim says:

    I think Tupper Lake has just completed a townwide reval, they hired a firm from western NY with no experience in the Adirondacks. It will be interesting to see how that pans out. I remember they had a big to-do with their last reval in 08, major discrepancies in values both high and low. The town board ended up lowering all assessments 30% which fixed nothing, and the Assessor at the time ended up retiring. By the way Tupper Lake paid the outside firm about $200,000. to do the recent reval therby causing an increases in taxes rather than letting the new assessor correct the inequities.

  16. Walker says:

    Just to be clear on this, if the assessment on every single property in the county is quadrupled at the same time, no one’s tax will change one iota. It is all a matter of the relative assessment between any two properties. So when Tupper lowered all its assessments by 30% it changed nothing UNTIL the next property sold, at which point the proud new owner was paying 30% more than everyone else in town.

  17. scratchy says:

    Property taxes are too high. Time to make local government smaller and more efficient.

  18. Paul says:

    Assessments are fine rates are too high.

  19. phahn50 says:

    assessments are not fine – they are not consistent. This is partially random error but partially something else.

  20. phahn50 says:

    In North Elba, everthing is overassessed so the proud new gets to pay 30% less than the previous owner.

  21. Pete Klein says:

    There wouldn’t be as of these complaints if we were to get rid of the antiquated method of funding education.
    Since both the state and federal government require education, it should be funded through the state and federal income tax, not a property tax.

  22. Mervel says:

    But the federal and state government can’t afford what they are giving the local school districts now. In NYS property taxes are important but state aid is the largest single component currently funding our schools.

    I mean we can sit around and wait for the revolution or we can figure out how to handle our school districts in a quality way without waiting on Albany. Albany is not coming to our rescue, they are not going to raise income taxes and EVEN if they do, those taxes will not go to education at the local level they will go to cover the current deficit.

    Property taxes are going to go up or we are going to figure out a more efficient way to provide education.

  23. Paul says:

    phahn50, Many assessments I see in and around Saranac Lake (especially on lakefront property) are far too low. There are problems yes, but the main issue is that rates are too high. Many people I know are constantly complaining about how their assessments are too high. Complaining about owning a valuable property?? I don’t get it? The rate is the problem.

  24. phahn50 says:

    paul – no disrespect but read the rest of the posts and you might “get it”.

  25. Paul says:

    phahn50, none taken. I do get it. There are some issues with over and under assessment. The same issue is everywhere, the NC has no monopoly on this problem.

  26. Pete Klein says:

    Many people complain their property taxes are too high. Hardly anyone complains they are too low.
    But if our property taxes were really too high when compared to other areas of the state, then why do people move here to retire?
    Maybe they just feel sorry for us and move here to help out?

  27. Paul says:

    Taxes are based on some sum of money that some entity needs, for example the school district. Changing assessments will NOT lead to more or less money in that sum. Assessments have NOTHING to do with taxes collected. IF one persons assessment goes up the amount of tax they pay may go up, if it does, other peoples tax will go down.

  28. Mervel says:

    It is a combination. Assessments and rates work together to determine the total property taxes collected. If all assessments go down then you would have a problem and would have to increase all rates. However individuals may look at if their assessment is fair given what other properties are assessed as.

  29. Paul says:

    “If all assessments go down then you would have a problem and would have to increase all rates.”

    Like I said it is rates that determine what you pay not the assessed value of the property.

    You could easily have your assessment go down and the amount of taxes you pay go up.

  30. Paul says:

    One solution for areas with heavy second home development might be to tie school and county taxes to income level rather than property value for residential properties.

  31. Down in Texas property taxes have gotten so burdensome the State has allowed loans to help homeowners pay off their property taxes. One thought to consider is to allow quick, perhaps online reassessments considering the declining home values these days. Just one an idea.

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