Hits: 0
WPCNR CAMPAIGN 2007. By John F. Bailey with Peter Katz. October 29, 2007: Thursday, October 24, 1929, is remembered as Black Thursday – the day the stock market crash began, which marked the beginning of the Great Depression. On Monday, October 29, 2007, there was a depressing financial moment here in White Plains for those who were listening carefully to Common Council candidate Robert Stackpole at the forum held by the Downtown Residents Association at Vintage Restaurant.

Robert Stackpole at Monday’s Downtown Residents Association Forum: A Bit of Bad News.
Stackpole, running for Common Council on the Independent Party line along with Robert Levine, spent about 35 years of his career as a Wall Street investment banker. During the candidates’ forum, he revealed that he had made some projections of the financial future for White Plains property taxpayers based on the revised New York State Equalization Rate which has to be used in figuring out how much taxpayers will have to pay. The city has challenged the proposed Equalization Rate for the coming tax year.
The whole issue of the Equalization Rate and calculating how much of the tax burden is borne by commercial property owners versus how much homeowners have to pay is rather complex. We’re not going to attempt to explain how it works in this article. You can find out about it at the web site of the New York State Office of Real Property Services — http://www.orps.state.ny.us/
$33 Million Gap
For openers, Stackpole calculates the city and school district face a $33-million drop in assessments. He calculates this translates into a 9% tax rate increase for the city and an 11% increase in the school tax rate.
Those increases just reflect what would be needed to make up the drop in assessments as calculated by Stackpole. They do not include any increases in year-to-year spending.
$1,000 Tax Increase
Applying this to a $700,000 single-family house in White Plains would result in approximately a $241 increase in city taxes in 2008-2009 (from roughly $2,600 to $2,840) and an $800 increase in school taxes in 2008-2009 (from $7,000 to $7,800). Again, that’s just to make up the drop in assessments, and does not make provision for any increases in spending or losses of income in other areas, such as direct state aid.
The 9% city tax increase and 11% school tax increase would be the minimum. Stackpole is hopeful he is wrong and that the full market value of property in the city will, when computed by the City Assessor in the spring, come in much higher than he estimates (7% higher – the average rate of increase in full value since 2003- 2004), which would mitigate assessment impact. The higher the full market value, Stackpole says, the better it will be for the city.
Only Your Assessor Knows for Sure.
The Full Market Value of all properties is calculated by the City Assessor annually, and this year will be presented on March 1, 2008. (This year’s market value is $9.1-billion, and Stackpole estimates it will go up 7%, the average for recent years, to $9.77-billion.)

Full Valuation Last 4 years (2003-2004 to 2007-2008) from the City 2007-2008 Budget.
Keep in mind that if spending increases at about the rate of inflation (about 3%), that would have to be added to the increase Stackpole expects would have to be made to make up for the decrease in assessments (i.e., 3% + 9% = 12% for the city; 3% + 11% = 14% for the school district).
Stackpole used the “working” 2.69% Equalization Rate figure released to the city by New York State last week (now being appealed). He calculated that the city will lose roughly $33-million off the March 1, 2008, Assessment Roll, resulting in a $7-million shortfall in city tax receipts – and a $14-million loss in School District receipts.

Assessed Valuation through 2006-2007 — from City Budget.
Sales Tax to the Rescue?
Should the city receive the one-half percent sales tax increase the administration proposed, but the request to Albany for which is being delayed by the Common Council, the increase in the city tax rate which Stackpole forsees might not be necessary.
However, as things stand now, the School District would receive no share of increased sales tax revenue and the school district’s tax increase to meet the assessment gap would have to be extracted from payers of property taxes or other revenue sources.
During an interview with WPCNR, Stackpole figured that if the city is unsuccessful in challenging the Equalization Rate, it faces a minimum $13 per thousand city tax increase, (to $155 per $1,000 of assessed value per home from the present $142/ $1,000 of assessed value).
School District Increase?
WPCNR took a look at the school district and figured that the $14-million gap would mean a $53 per thousand school tax increase (to $527 per thousand dollars of assessed value from the present $474/$1,000 of assessed value).
Strictly Based on Trend.
The assessed value of properties in the city is $296-million as of 2006-2007. Stackpole used this figure because he said this was a “hard” figure already documented. Stackpole says that when you subtract the $33-million, you wind up with an assessed value of $263-million.
$296 Million Minus $263 Million is $33 Million.
The present city tax rate of $142 per $1,000 of assessed value yields $37-million in receipts (263,000 x $142= $37Million). The present city budget for 2007-2008 calls for a property tax levy of $44-million. That leaves a $7-million gap for 2008-2009.
Stackpole estimated that to make that up the city would have to add $13 to the $142/$1,000 of assessed valuation to yield the property tax it requires. That brings the city tax rate to $155/$1,000 of assessed valuation.
Stackpole Says It’s “Grim.”
The sobering part of this projection is that it is applied to the present city budget and the present school budget with no increases in spending. Any increase in the city budget of $154.5-million and the school budget of $174-million would force an increase in the tax rates unless other sources of income can be found.
“I’m not sure that people realize how grim this really is,” Stackpole told WPCNR. He said that in his computations, he allowed for an average 7% growth in full valuation, multiplied by the proposed new Equalization Rate.
Stackpole applied the 2.69% Equalization Rate to last year’s $9.1-billion full market value plus $630-million, adding 7% for a total of $9.7-billion to reflect the average yearly growth of full market value over the last 7 years.
Poof! $33 Million in Assessments Vanishes.
He multiplied the $9.7-billion figure by the 2.69% Equalization Rate, which gives $263-million of Assessed Value. He subtracted the figure of $263-million from the 2006-2007 hard figure of $296-million in Assessed Value which computes assessments as $33-million lower.
The assessed value figured in the 2007-2008 budget is $289-million, but Stackpole decided to use the hard figure of $296-million from 2006-2007 for a more conservative figure. The School District budget uses a $292-million figure for assessed Value in their 2007-2008 Budget.
Sales Tax Cure?
The sales tax increase sought by the city will yield $10-million according to city hall. That kind of revenue boost would take care of a $7-million shortfall caused by the assessment dip, as well as pay for salary and benefits increases of $3-million.
In a “Letter to the Editor” of The Journal News, Mayor Delfino hinted about property tax relief, which some people may have interpreted as a suggestion that some or all of that $10-million from an increase in the sales tax rate could be used to provide property tax relief. But, if Stackpole’s calculations hold up, there might not be any money available for a tax cut.
Back to the School District.
Bear in mind, the School District needs to start paying off the first of their bondings for the Capital Improvement plan and come up with another teacher contract settlement in 2008-2009, so the possible major erosion of assessments Stackpole sees would add unforeseen pain to the district budget-making process this year.
WPCNR used the math to see what the city school district shortfall might be.
At $263-million of Assessed Value, WPCNR multiplied the $474 per $1,000 of assessed valuation school tax rate by that number ($474 x 263,000 = $124.6M) coming up with a $124.6-million tax levy yield.
The tax levy yield in the present 2007-2008 City School Budget now in progress is $138.5-million. Stackpole noted to WPCNR, “this is a $14-million gap.”

The Present 2007-2008 School Tax Levy ($474.62 per $1,000 Assessed Valuation)
To meet that $14-million gap, WPCNR estimates the school district would have to add $53 to the $474 per $1,000 of assessed value tax rate. ($53 x 263,000 = $14M; $474 plus $53/1,000 = $527/$1,000 /x 263,000 = $138.6 Million)
Stackpole said, “You have to be stupid not to see it (the budget effect on the taxpayers). You do not need a CPA degree or MBA degree to see that the budget is out of whack.”
Condos Killing the Assessments?
WPCNR asked Stackpole if he felt the equalization rate was affected by the number of condominiums which have been built in White Plains recently, many valued at more than $1-million. He said that condominiums had a great deal to do with it, since condominiums are taxed at half or less-than-half the rate of stand-alone homes, “and we’re not getting enough bang for the buck out of the condos, we’re falling behind.”
As part of a WPCNR analysis of the equalization rate on this website last May, we interviewed an assessor who stated, in part:
“As we are all aware, all property values have increased significantly over the last 10 years. However, some residential properties have increased at significantly higher rates than the other three categories: commercial property, vacant land and utility properties. This situation affects the weighting of the categories resulting in so much weighting to residential that it is lowering the equalization rate and that’s bad.
“The Equalization Rate works conversely. As market value increases, it is indicative that the Equalization Rate decreases, and vice-versa.
“Because a lot of Westchester municipalities have a significant amount more residential properties and the residential properties are increasing at a faster pace, the Equalization Rate is skewed, leaning more towards the residential constituent.”
What Can Be Done.
WPCNR asked Stackpole, regardless of who is elected, what he thought had to be done to reverse this trend.
He said, “The New York State Legislature has to have some interest in changing the rules on evaluating commercial property. The legislature should change the taxation laws on cooperatives and condominiums which are taxed at half the rate of residential properties.” Stackpole added that the legislature should “pass the ½% sales tax (for White Plains) to mitigate some of the problems.”
He called on the Common Council to change policy on the city response to certioraris filed against the city, providing for a way of recapturing from the filing property the revenue the reassessment costs the city, and to look at new revenue sources. Stackpole pointed out that mortgage tax income, which he said has helped for the last couple of years, would be lowering as home sales slowed.
PILOTS Take Toll on Assessment Roll
Stackpole singled out the granting of PILOTS as costing the city more in assessable value than they bring in Payments in Lieu of Taxes. He pointed out that had the city not granted the PILOTS covering long periods of time (10 to 15 years), all the full market value of finished projects now on PILOTS for the next decade or more would be on the city tax rolls, considerably adding to the city’s Full Market Value, lessening the impact on assessable value determined by the Equalization Rate.
He did not estimate what he thought the PILOT properties were worth, just pointing out that the longer any PILOT lasts, the more the tax rolls and the taxpayers are deprived of the full benefit of development.
WPCNR figured what the Full Market Value of properties in White Plains would have to be to stop the decline in assessed value.
Just for the sake of demonstration, WPCNR used the Equalization Rate of 2.69%.
If Full Market Value reaches $10-billion, the drop in assessment value is only $27-million ($10B x .0269 = $269-million subtracted from $296-million (06-07 assessed value) = $27-million)).
If the total market value of all properties increases to $11-billion, there would be no drop in assessment value in 2008-2009 ($11-billion x .0269 = $296-million).