Written by Jaclyn Gallucci Friday, 18 October 2013 00:00
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 be mailed to Mineola residents last week.
District figures show the school tax rate for Mineola homeowners increasing by 6.1 percent.
While not as big a jump as last year—Mineola residents saw a 9.9 percent increase in their school tax rate—the latest figures from both districts show tax rates far exceeding what was expected when voters passed school budgets in spring.
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.
“Everybody points a finger at somebody else and [residents] can’t get a straight answer, which ticks people off even more,” District Superintendent Michael Nagler said. “[Mineola] has been steady at [a 2.5 percent tax levy] for six years.
[The county] determines how the money is collected.”
Mineola schools will receive 2.18 percent in tax dollars from homeowners. This is in line with the budgets passed in the spring. But two factors are conspiring to drive homeowner tax rates higher than that.
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.
Mineola’s ABP increased by 3.34 percent, which is in the middle of the pack of reported school districts. The Roosevelt School District (0.32 percent) was the lowest, while the Valley Stream School District 24 (5.29 percent) was the highest.
Neighboring school districts, namely Garden City, Roslyn, Herricks and East Williston, were hit with a 3.04, 3.37, 3.04 and 2.97 percent increases, respectively.
“They increased private homes in Mineola over 3 percent [according to the ABP],” said Nagler. “If you look at all the numbers, that’s pretty high. What did they use to determine that number.”
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.
“They have system supposedly on what a fair value for your home is and what your portion is to pay this bill,” Nagler said.
On top of that huge imbalance, there’s a difference in how much of the burden each class of taxpayer carries.
“It’s the different in the [designated] classes,” Nagler said. “I know they raised single-family homes because that is who I am hearing from.”
When the Department of Assessment issued homeowners their 2012-2013 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 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.