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Falling Values Send Tax Rates Soaring

Residents across Nassau County are being hit with sharp school tax rate increases, leaving politicians pointing fingers and school administrators blaming a broken property assessment system and specifically, valuation reductions on commercial properties.

The latest school tax bills, reflecting the higher rates, were mailed to Garden City residents last month.

District figures show the school tax rate for Garden City homeowners increasing by 7.52 percent. This on top of the 3.19 percent tax levy voted on earlier this year as part of the passing of the 2013-14 budget.

School administrators say the sharp increase is caused by lower property valuations, especially commercial properties. Many owners have challenged their assessments through the Assessment Review Commission (ARC), an independent agency which reviews the valuation set by Nassau County. If it finds a property excessively overvalued, the ARC reduces the assessment, which lowers the taxes—and sometimes includes huge rebates—for that individual property owner.

But the school budget calls for a specific amount of tax revenue; if the value of taxable land  falls then the tax rate must rise to bring in the same amount. Thus, those lower property values are forcing another year of dramatic rise in school tax rates with no financial aid coming from Albany to help offset these increases.

“Garden City Public Schools will receive no additional funds above the 3.19 percent tax levy Garden City voters approved last May – not one penny more,” explained Dr. Robert Feirsen, superintendent of the Garden City Union Free School District. “The increase is due to actions taken by Nassau County: granting tax grievances to 87 percent of those who filed this year, the freezing of assessments, and the 10-year trend of shifting more of the tax burden to homeowners from businesses.”  

Nassau County uses a tax class system, segregating different types of properties. Classes 1 and 2 include properties that are primarily residential. Class 3 consists of utility company equipment and special franchises. Class 4 contains all other property, including commercial, industrial and institutional buildings, and vacant land. Each class contributes a different percentage of the overall tax bill, called the “adjusted base proportion” or “ABP.” Those rates were changed last year, too, by the county, raising the portion of taxes paid by residential homeowners.  

Secondly, owners in every class are eligible to challenge their assessments. But the impact on revenue of revaluing a home—worth about $400,000 on average countywide—is negligible next to the impact of revaluing a commercial property—worth well into the millions in Nassau county. (And remember, when one taxpayer wins a reduction, the rest must make up the difference.) School officials are saying that hefty commercial property reductions are a major driver of the latest rate hike for residents.

When the Department of Assessment issued homeowners their 2012-13 tax roll disclosure notice last year, Nassau properties had been given the lowest possible assessed values, according to the department.

“The lowest possible value was chosen because of our commitment to keep the assessments at a reasonable level that is fair and equitable to all property owners,” said Gregory Hild, chairman of the Department of Assessment’s transition team at the time.

However, these lower property taxes have caused school tax rates to rise, making up for, and in some cases far surpassing, the money saved on property taxes.

“County officials encourage homeowners to challenge their assessment and then proudly announce that 87 percent of the assessment review claims are granted,” says Joseph Dragone, Roslyn School District’s assistant superintendent for business.

School taxes rise when the district seeks more money than the previous year, but typically budget increases are relatively small. The bigger impact, according to school administrators, comes from changes in assessed value—both of people’s homes and of commercial properties.

Dave Gil de Rubio contributed to this story