WPCNR Campaign 2007. By John F. Bailey. November 5, 2007: According to a New York State Office of Real Property Services spokesperson Monday, the ORPS used an estimated Total Market Value to compute the 2.69% Equalization Rate issued White Plains August 21 When computing the Equalization Rate, Joe Hesch told WPCNR the office uses the most recent sales and appraisals to estimate the Total Market Value of White Plains. It then divides the latest Total Assessed Value by the Total Market Value to compute the Equalization Rate. (This is a simplification.)
The confirmation from NYORPS indicates that White Plains Total Market Value of Real Estate is about $10.8 Billion, up 18% in one year. Though this means the Assessed Value in the City has been met, and Candidate Robert Stackpole’s dire prediction of last week thanks to a rising real estate market, and pending calculation of the 2008-2008 Tax Roll, two Assessment experts tell WPCNR the 2.69% Equalization Rate virtually assures a sharp increase in certiorari filings for property tax refunds. It means continued assessment roll woes in the next five years.
Hesch described the Equalization Rate as a means of describing the average percentage of property taxes compared to Real market value the city charges all properties in White Plains.
Last week, candidate Robert Stackpole, running for Common Council made the prediction that if White Plains Total Market Value continued to average 7% as it has the last four years, (reaching $9.7 Billion) White Plains would face a $7 Million budget gap and WPCNR estimated a $14 Million gap would face the school district.
WPCNR estimated that if White Plains Total Market Value went up faster than 7%, say 20% the Total Market Value would go to about $11 Billion and White Plains would not have an automatic assessment drop of $33 Million, but would be exactly even, on the assessment roll going into the next budget year, subject only to increases in city expenditures, not just assessment drops. WPCNR’s Math Lab appears correct.
For White Plains to have a 2.69% Equalization Rate, it roughly has to have a $10.8 Million Total Market Value (of city real estate) to wit:
$290 Million (Total Assessed Value) Divided by $10.8 Billion (Total Market Value)= 2.69% (Equalization Rate)
The 2.69 Equalization Rate, using the NYSORPS formula indicates White Plains Total Market Value rose about 18% in one year. This is more than double the 7% growth rate of the last four years that Stackpole used.
Certiorari Hemorrhage Predicted.
This is both good news and bad news according to an upstate City Assessor whom WPCNR interviewed today. The 2.69% Equalization Rate, fully .50 below this year’s assessment rate (3.24%) is an invitation to commercial properties to file for more certioraris on the present tax year, they said, and if an owner has had the same assessment for about five years, without applying for a cert, even more an incentive to file.
WPCNR looked at the history of the White Plains Equalization Rate:
In 2001-2002, the Equalization Rate (the average percentage of property tax White Plains charged all its properties) was 6.35%, now in 2007-2008 it is 2.69%. This means that you are paying 4.66% more in property taxes than you should be paying if you’re still under your 2002 assessment. It is an invitation to file for certioraris if you have not already. As a commercial property owner, unless you sell your property you cannot have it reassessed so as your expenses go up, you still pay the same property taxes. But as the Equalization Rate goes down, it means you are paying more taxes than you should have based on the same assessment. It is a no-brainer to file a certiorari.
The bonanza comes in selling a commercial property. Owner sells, property is reassessed, many times downward, buyer gets a lower assessment, former owner a profit, city loses big time assessment dollars.
Double Dipping.
The assessor also said that property owners who have been granted certiorari relief since 2002 will most certainly file for more relief when eligible (about two years, WPCNR believes, but we will check this). The assessor, I spoke too, noted this will be a disaster for White Plains in about five years time, when this year’s drop comes to roost especially if Total Market Value continues to rise, and the Equalization Rate drops even lower.
Hesch of the NYORPS said there was no way he could tell when the White Plains appeal of its Equalization Rate would be settled and the Equalization Rate finalized. At this point, there is nothing White Plains can do except make the case that the Total Market Value has been overestimated by the New York State Office of Real Property Services and the wrong statistical sample of properties has been selected.
Assessments Continue in Free Fall.
Monday night, a very quiet certiorari settlement was approved by the Common Council, illustrates exactly this kind of timing, we’re talking about here.
Two of the three settlements traced back to the 2001-2002 year. The third, 2002-2003 (the year there was a big jump in total market value in White Plains when total market value went off the page going up 35%)
They were not big amounts, but disturbingly they are smaller properties
The City granted dropped T & J Realty Company at 4 Quarropas Street assessment relief from $170,000 to $86,000, and agreed to a $44,395 refund over 5 years.
It dropped Reckson Properties at 140 Grand Street from $1,220,000 in assessed value to $1,050,000, granting a $166,023 refund over 7 years.
It lowered the assessment on Hillside Village Condominiums from $950,000 to $575,000, agreeing to a $219,298 refund.
White Plains, Like Robert Hall:As the Value Goes Up Up UP, the Taxes go Down Down Down.
The loss in assessment value to the city on these three settlements is $83,638 in property tax dollars each year. For the School District it is $279,186 each year. Think of this happening with each commercial property. It is not pleasant to comtemplate.
These are rather small settlements compared to the whoppers of past years. But our Assessor source predicts the 2.69% Equalization Rate is going to produce a lot more, and the more it drops over the next few years the more certioraris to come.
The erosion of the city tax base and more chillingly, the school district tax base – Mr. and Mrs. and Ms. White Plains the sole tax payer – sees no relief in sight.
White Plains is like a Robert Hall for Commercial Property Owners: as the value goes up up,up the taxes go down down down.
