Supervisor Bill McGintee said this week that he will ask the Town Board to look into the possibility of a town-wide property reassessment in the immediate future, possibly as early as later this year, to bring property tax rolls up to date with actual market values.
The supervisor said that with the town looking as if it will have to endure some economic hardships, including tax increases in the coming year to dig out of a fiscal hole, the tax burden needs to be distributed as fairly as possible.
“The time has come,” Mr. McGintee said on Monday. “If we’re moving in the direction of making financial corrections, I think it is only fair that we spread it out evenly.”
The supervisor said that assessments in the town are so out of date that a reassessment could mean millions in new revenue for the town if property tax rates are kept the same—potentially lessening or eliminating the need for tax rate hikes to address the town’s fiscal woes.
Longtime town tax assessor Jeanne Nielsen, who has been calling for a town-wide reassessment for years, agreed that a reassessment could create new taxable value for the town, though she said there would be no way to know how much additional revenue it could generate at current tax rates until the new assessments were put on the books.
After years of relatively small tax increases and a growing fiscal deficit in the town’s general fund, Mr. McGintee has said that spending cuts and tax increases are going to be needed to balance the books by 2010, the end of his term in office.
Upon hearing of the supervisor’s plans, some board members said they were leery of tackling such a controversial, all-encompassing and expensive project as a town-wide reassessment while the board is trying to get a handle on its finances. Most were doubtful of whether the additional revenues would cover the costs of the reassessment work and what the potential downside of new assessments could be.
“I think we’ve got a lot of work to do to get our budget fixed and I don’t know that we want to take that on now,” Councilman Pete Hammerle said. “I’m not against it, I guess it could be an opportune time to get something done that is a real tooth puller, but I don’t see it happening. That’s not the way to fix this problem.”
Councilwoman Pat Mansir echoed Mr. Hammerle’s aversion to a reassessment and said she’d prefer that the board focus on fixing the financial problems in the town through cost cutting and more careful management. She also worried that rising tax bills for some residents on fixed incomes could have disastrous results, if only for a few people.
“What happens if it turns around and we have devastating impact on people that cannot afford to have their taxes go up?” she said. “You don’t know what the end result is going to be. I’m not just gong to close my eyes and say go ahead with it. We’ve got enough problems right here.”
But the supervisor said that “someone has to take the bull by the horns” and push a reassessment through or inequities will continue to hit the pocketbooks of residents, particularly with tough economic times on the horizon. “It’s going to happen eventually, one of two ways,” Mr. McGintee said. “Either we do it or someone is going to file a lawsuit like they did in Southampton.”
A lawsuit by a group of residents in Southampton forced that town to conduct a reassessment in 1992. They argued that out-of-date assessments meant the tax burden wasn’t being spread equally across the town, according to actual market values. Southampton’s Town Board undertook additional reassessments in 2004 and 2006 using contracting firms and is now on schedule to do town-wide assessment updates every two years using its own staff.
The Town of Shelter Island conducted a reassessment early in this decade and has established a system for revising assessments to keep pace with changing market values every year.
East Hampton Town has not had a town-wide reassessment done in more than 70 years. Reassessments are often seen as a political hot potato because they bring higher valuations for properties with old assessments and, for some, higher tax bills. A backlash from the much criticized reassessment in Southampton Town in 2006 has been blamed for political turnover there last fall, though much of the controversy was actually over the way values were estimated and the way the town handled grievances, not the overall impact of the effort.
But tax assessors say that in towns like East Hampton—with widely disparate property values from waterfront to dense residential zones— aging assessment rolls can be particularly unfair to some of the low- and middle-income residents of Springs, where many homes were constructed in the 1980s and houses were actually overvalued.
The state encourages towns to reassess regularly but has no law to require it. State officials say a reassessment does not necessarily mean a municipality will receive more revenue; that would happen only if tax rates are not reduced proportionately after the town’s overall assessed value has been raised. They also say that, in most reassessments, if tax rates stay level, about a third of property owners see their tax bills drop, a third see no change and a third take a hit with a higher bill. A higher assessed valuation, they note, does not necessarily mean the tax bill for any one particular property will go up because almost all assessed values will be rising. If the town does not increase the amount it is seeking to raise by taxation, tax rates actually fall after a reassessment because of the overall rise in assessed value.
Conducting a comprehensive reassessment would be expensive. The process usually requires contracting a large real estate assessment firm that visits and photographs each and every property in the town, cataloging development and issuing a market value estimate based on recent sales of similarly developed and situated properties in the surrounding neighborhoods. The town would likely have to purchase a computer system, known as a geographic information system, that tracks property development.
Mr. McGintee said he will ask the board to have a detailed cost estimate for the project done but estimated that it would cost in the neighborhood of $2 million to complete.
“You’d have to prove it to me first,” Ms. Mansir said. “In other words, do all the work and show it to me. I know that’s not possible but I don’t trust that it’s only going to hit the people that have been sliding by for years underassessed.”