GLOVERSVILLE — Gloversville Assessor Joni Dennie told the Common Council on Tuesday night that the city’s recovery rate has fallen to 89%, marking the first time since 2008 that the recovery rate has fallen below 100%.
Dennie provided the council with a list of estimated property values compared to their last sale price to illustrate the impossibility of preventing the city’s settlement rate from falling. Dennie’s figures in January showed that a home priced at $93,100 sold for $255,000 and a single family home priced at $86,100 for $225,000. In February, a municipal home estimated at $67,200 sold for $205,000. While she didn’t include addresses in her numbers, she said the numbers explain why the drop in the compensatory rate is inevitable.
“You can see the discrepancy, and that causes the rate to go down because these sales are up here and the estimates are down here, and I can’t change the estimated value based on a sale,” she said. “You have to change the whole city if you want to change something.”
A lower compensatory rate generally means an increase in the county property tax rate payable by city property owners. The New York State compensatory rate formula attempts to measure the gap between a property’s most recent property tax assessment and the actual selling price of comparable properties in the same area. The equalization rate formula is the system New York State uses to try to create a fair system for evenly distributing the property tax burden across all properties in a given community.
Dennie said that she typically files an Early Level of Assessment (LOA) with New York State in mid-February, and that “Early LOA” only considers residential property sales, not considering commercial property sales or vacant property sales . She said state officials with the New York State Office of Real Property Tax Services (ORPTS) recommended including commercial sales this year to keep Gloversville’s settlement rate slightly higher.
“I didn’t know if my commercials would help or hurt me this year so I waited for my commercials because my rep at ORPTS told me she thought the commercials would help me, just a little, and they did. just a little,” Dennie said. “The commercials helped the rate go from 83.12% to 84.83%.”
Dennie said that New York State’s compensation rate formula allows for a margin of about “5%,” which helped the city get to 89%.
When ORPTS released the “estimated overall” recovery rate for communities across New York State in February, it showed that Gloversville would still have the highest recovery rate of any community in Fulton County, about 1 percentage point higher than the city of Johnstown. Since then, Dennie said, the city of Bleecker has declared that it now has a 100% settlement rate.
“It depends on what they give Bleecker, Bleecker claims 100%, if they give them 100% then I don’t know,” Dennie said of where Gloversville’s compensation rate will fit compared to the other communities.
One effect of the decreasing compensation rate will be the level of the basic and expanded STAR tax exemptions for schools. For Gloversville property owners for the 2021-22 school year, the basic STAR exemption is $651 and the extended STAR exemption is $1,386. Dennie said as the compensatory rate goes down, those exceptions get smaller too.
Dennie said property owners in the city of Johnstown that are in the Gloversville Extended School District are eligible for a lower base STAR, $433, and a lower extended STAR exemption, $964, in the 2021-22 school tax year than property owners in Gloversville The City of Johnstown’s equalization rate for this tax period was lower than that of Gloversville. She said the new compensatory rates will likely not receive final approval from New York State until sometime this summer and will not apply to school taxes until the 2022-23 school year accounting cycle.
During the Common Council meeting, 6th Circuit Councilor Wrandy Siarkowski asked Dennie when the city last conducted a full revaluation of properties. She said it was 2008.
“An external company has to do that?” asked Siarkowski.
“We did it internally in 2008 when Dorothy Parker was an assessor here,” Dennie said. “I was their employee and it took us both three years to do it internally. We never got help from the state, but we didn’t ask for it; we did it while we were working.”
“Is there any state aid to do a reassessment?” asked Siarkowski.
“Yes, but as far as I know the chances of getting it are slim to none,” Dennie said.
Dennie recommended the Council not to support a reassessment at this time.
“We don’t know if the market is going to peak and then fall or level out here,” Dennie said. “They don’t want to bounce and then the market will peak and then fall.”
Dennie said another factor to consider in the reevaluation is New York State’s cap on STAR exemptions.
“As the compensatory rate goes down, so does the cap on the STAR exemptions… but it can never go back up,” Dennie said, explaining that if the city’s compensatory rate went back up to 100%, the STAR exemptions would not increase again. through a re-evaluation.
“That makes absolutely no sense to me, in my opinion,” Dennie said of the state’s STAR waivers. “You should start at square 1 when making a reval. I myself only heard about this rule a year ago from the Office of Real Property Tax Services in Albany. They are the ones making all the rules.”