ELIZABETHTOWN - Officials from the New York State Office of Real Property Services (ORPS) drew marked skepticism from Essex County supervisors as they tried to explain how they determine equalization rates.
Dozens of local town assessors and concerned taxpayers attended the Essex County Ways and Means committee meeting June 29 to hear ORPS deputy executive director Vic Mallison and northern regional director Robert Aiken discuss the cumbersome methods by which the full market value of a municipality is calculated; methods which have raised suspicion from local government officials and taxpayers.
At the heart of the debate were equalization rates, a percentage determined by ORPS to represent how assessments within a township compare to the aggregate market value within that township. The latter is required by law to be estimated by ORPS.
"We take a look at the town overall and try to give you a value of what the town is worth," explained Mallison, who admitted that there was some margin for error in the process.
"It's not a guessing game, but it's not precise," he said.
Mallison said the need for equalization rates stems from the fact that New York is one of five states that has no clear statewide valuation standard, nor does it require its 1,128 taxing municipalities to perform periodic reassessments.
As a result, he explained, there are many towns that don't keep their assessments up to date with changing market values.
Equalization rates provide a ratio by which property tax fairness can be compared from town to town.
However, many questioned the process, which is seemingly shrouded in complicated mathematical formulas that often use data from neighboring towns.
Several supervisors complained that the data used in the analysis weren't being shared with local assessors, leading to confusion and disagreement regarding equalization. Aiken held that such information was available to assessors if requested.
"We will answer any questions on any data that we supply them," said Aiken.
Moriah Supervisor Thomas Scozzafava still said the lack of communication made it difficult for towns, most of which have part-time assessors.
"Why don't you put the information in the packet as to how they arrived at the [market value] instead of having the assessors go hunting for it?" he asked.
Chesterfield Supervisor Gerald Morrow described the precarious situation in his town, where the most houses being sold are Port Kent properties being purchased by second homeowners for significantly more than the assessed value. He expressed concern that such extraordinary sales could skew market value data in his town and lead to inflated assessments on other properties.
Mallison agreed that assessments for waterfront property posed a problem, but that to change the way they are assessed would require new legislation at the state level.
Ron Jackson, Essex supervisor and chairman of the committee, was among many who questioned how increases in assessments could be justified during a time when many houses are being sold for less than their assessed value.
"It puts the assessors in a horrible spot," he said.
According to Aiken, ORPS can often verify the level of assessment stated by local assessors if reassessments are done regularly. If not, they try to use a sales ratio study that compares current assessment to the sale prices of recently sold homes in the town.
"If we don't have enough sales there to give us a statistic town-wide, we try to expand the market area," Aiken explained.
In those cases, the agency uses CAMA, a computerized statistical analysis that uses certain formulas comparing sales in the target town with those in neighboring towns in an effort to produce a more reliable valuation of properties.
"One of the problems with the [sales ratio] study going back three years is that the data could be out of date," said North Elba Supervisor Roby Politi, arguing that it wouldn't be representative of recent steep declines in market value.
Politi also questioned the CAMA method, which often uses home sales in Lake Placid and other nearby towns to estimate market values in Keene, a town where very few homes sell each year.
Mallison assured the committee analysis through CAMA made reliable adjustments when comparing sales from outside towns.
"The CAMA models that they build actually take into practice that there are differences between Lake Placid and Elizabethtown," he said.
Scozzafava questioned the number of sales needed to make a reliable analysis, arguing that the use of CAMA led to an unnecessarily low equalization rate in Moriah.
According to Mallison, a sales ratio study requires less than 100 sales as samples while CAMA analysis usually requires about 300. CAMA was required in the case of Moriah, he said, because raised assessments were skewed toward recently sold homes.
"Our model, from a statistical basis, doesn't work with a limited number of sales," said Mallison, "and that's difficult in a rural area. Our job is to be statistically accurate."
Mallison said his agency continues to work on ways to make the property tax system more fair statewide and that they would at least reevaluate the methods used to determine equalization in areas with very few sales.
"I will go back to the office and have a serious discussion about what our statistical analysis are," said Mallison. "We want to be able to reflect what the local officials see as fair in the rural areas."