SYRACUSE UNIVERSITY
The Maxwell School of Citizenship and Public Affairs
PAI735/ECN635
State and Local Government Finance
Professor Yinger
Syracuse, New York
Memorandum
To: Common Council
From: John C. Gamage
Date: September 6, 1995
Re: Reassessment & Homestead Option
The Homestead Tax Option is a provision of the New York State Real Property Tax Law which authorizes municipalities completing reassessments to establish two separate tax rates: a lower tax rate for residential properties and a higher tax rate for all other properties. The effect of the 2 rates is to prevent a shift of some of the tax burden from the non-residential class of property to the residential class.
We anticipate that we will have detailed information available for Common Council review in a few weeks, which will compare the tax shifts which will result from reassessment in both dollars and percentages on a Homestead and Non-Homestead basis.
There are several important aspects of the Homestead Tax Option which you should be aware of:
- It does not apply to County taxes, which account for 42% of taxes paid by City property owners this year. This means that a shift of taxes will occur from the non-residential class to the residential class even if the Homestead Tax Option is used for City tax purposes.
- The City may alter the Homestead Tax Option to allow a specific portion of the shift to occur. The increments authorized by Section 1903 are 10%, 20%, 25%, 30%, 40%, 50%, 60%, 70%, 80%, 90%, and 100%.
- The Homestead Tax Option can be rescinded in the future by passage of a local law.
City School District and the Homestead Tax Option
The Homestead Tax Option may be used for School taxes if the City uses it for City tax purposes. If it is used for City taxes, it will also apply to School taxes unless the Board of Education passes a resolution to use a uniform tax rate, and holds a public hearing prior to the levy of taxes.
Important Dates
- If the City desires to use the Homestead Tax Option a local law must be enacted not later than December 1. This would require introduction of the legislation at an earlier date.
- If the City passes a local law to enact this option, and the Board of Education wishes to opt out, the Board must pass its resolution not later than June 14, 1996.
- The first Assessment disclosure notice will be mailed to property owners early in October. A sample notice and cover letter used in another municipality are attached for your reference.
There are 3 possible ways to handle the disclosure notices:
- They can be calculated on a Non-Homestead basis
- They can be calculated on a Homestead basis
- It may be possible to send notices calculated both ways to each property owner.
Use of the Homestead Tax Option in other Municipalities
The Homestead Tax Option is currently being used by 14 cities, 16 towns, and 74 school districts.
For your information I have listed below the Homestead and Non-homestead tax rates in Binghamton, Buffalo, Niagara Falls, and Rochester.
| Homestead and Non-homestead Tax Rates |
|||
| Homestead Class Tax Rates | Non-Homestead Class Tax Rates | ||
| Binghamton | City | 11.073 | 16.725 |
| School | 15.378 | 24.284 | |
| County | 6.386 | 6.386 | |
| Total | 32.837 | 47.395 | |
| Buffalo | City | 10.620 | 21.160 |
| School | 6.840 | 14.090 | |
| County | 7.430 | 7.430 | |
| Total | 24.890 | 42.680 | |
| Niagara Falls | City | 10.330 | 26.100 |
| School | 12.780 | 32.640 | |
| County | 7.830 | 7.830 | |
| Total | 30.940 | 66.550 | |
| Rochester | City | 5.545 | 14.162 |
| School | 10.634 | 27.946 | |
| County | 11.580 | 11.580 | |
| Total | 27.759 | 53.688 | |
/amk
cc: Mayor Bernardi
Superintendent DiFlorio, Board of Education
_______________________________
DEPARTMENT OF ASSESSMENT
Memorandum
To: Common Council
From: John C. Gamage
Date: October 18, 1995
Re: Homestead Tax Option
Attached for your information and review are several tables which illustrate various aspects of the preliminary full value assessment roll relative to the Homestead Tax Option:
TABLE 1 Comparison of residential and commercial percent of the tax base
TABLE 2 Preliminary tax rate comparison
TABLE 3 Change in City/School taxes
TABLE 4 Change in County taxes
TABLE 5 Change in City/School/County taxes
TABLE 6 As requested at the committee meeting on September 7, this is a summary of Homestead and Non-Homestead tax rates in several cities.
Also attached to help illustrate how the Homestead Tax Option works, are 2 sets of Assessment Disclosure notices:
Set 1 is a homestead basis notice and a non-homestead basis notice for a house assessed at $70,000
Set 2 is a homestead basis notice and a non-homestead basis notice for a commercial property assessed at $329,500.
| Table 1. Percent Tax Rate Comparison | ||
| Current Roll | Revaluation Roll | |
| Residential | 46.41% | 54.50% |
| Commercial | 39.80% | 35.11% |
| All Others | 13.79% | 10.39% |
Table 2. Preliminary Tax Rate Comparison
| Current Tax Rate | Reassessment Tax Rate Without Homestead | Reassessment Tax Rate with Full HomesteadHomestead Non-Homestead Class Class | ||
| City | $51.46 | $4.65 | $3.98 | $5.49 |
| School | $139.94 | $12.65 | $10.91 | $14.92 |
| County | $137.72 | $12.44 | $12.44 | $12.44 |
| Total | $329.12 | $29.74 | $27.33 | $32.85 |
|
Table 3. Change in City/School Taxes |
||||||
| Residential Property | Commercial Property | |||||
| With Homestead | Without Homestead | With Homestead |
Without Homestead | |||
| > – $999 | 90 | 32 | 809 | 1,302 | ||
| -$500 to – $999 | 953 | 290 | 580 | 775 | ||
| -$200 to + $500 | 4,573 | 1,828 | 652 | 702 | ||
| -$200 to + $200 | 21,105 | 16,628 | 954 | 834 | ||
| +$200 to + $500 | 6,446 | 12,231 | 488 | 249 | ||
| +$500 to + $999 | 393 | 2,477 | 310 | 156 | ||
| > + $999 | 16 | 90 | 495 | 270 | ||
| Total | 33,576 | 33,576 | 4,288 | 4,288 | ||
| Table 4. Change in County Taxes | |||
| Residential Property | Commercial Property | ||
| > – $999 | 9 | 949 | |
| -$500 to – $999 | 105 | 782 | |
| -$200 to – $500 | 1,134 | 868 | |
| -$200 to +$200 | 21,798 | 1,119 | |
| +$200 to $500 | 10,034 | 225 | |
| +$500 to $999 | 479 | 132 | |
| > + $999 | 17 | 213 | |
| Total | 33,576 | 4,288 | |
| Table 5. Change in City/School/County Taxes | |||||
| Residential Property | Commercial Property | ||||
| With Homestead | Without Homestead | With Homestead | Without Homestead | ||
| > – $999 | 390 | 202 | 1,535 | 1,932 | |
| -$500 to – $999 | 1,781 | 965 | 622 | 632 | |
| -$200 to – $500 | 4,040 | 2,531 | 427 | 411 | |
| -$200 to +$200 | 12,763 | 10,196 | 547 | 501 | |
| +$200 to $500 | 8,775 | 9,691 | 301 | 258 | |
| +$500 to $999 | 5,402 | 8,747 | 298 | 169 | |
| > + $999 | 425 | 1,244 | 558 | 385 | |
| Total | 33,576 | 33,576 | 4,288 | 4,288 | |
| Table 6. Comparison of Homestead Tax Rates in Selected Cities | ||||||
| Buffalo | Rochester | Niagara Falls | ||||
| Year | Homestead | Non-Homestead | Homestead | Non-Homestead | Homestead | Non-Homestead |
| 85-86 | 29.22 | 46.59 | 35.07 | 55.96 | ||
| 86-87 | 21.04 | 38.74 | 37.82 | 60.05 | ||
| 87-88 | 20.66 | 39.22 | 37.45 | 64.68 | ||
| 88-89 | 28.35 | 34.46 | 22.03 | 41.97 | 39.42 | 70.94 |
| 89-90 | 29.66 | 36.49 | 23.44 | 43.27 | 40.84 | 74.99 |
| 90-91 | 31.49 | 40.19 | 22.93 | 45.27 | 42.05 | 78.50 |
| 91-92 | 33.72 | 44.43 | 24.91 | 48.91 | 43.41 | 84.32 |
| 92-93 | 39.08 | 52.95 | 25.92 | 50.99 | 43.47 | 83.66 |
| 93-94 | 26.87 | 48.05 | 26.09 | 52.92 | 30.35 | 69.59 |
| 94-95 | 23.40 | 43.04 | 26.87 | 53.07 | 30.94 | 66.56 |
| 95-96 | 24.89 | 42.67 | ||||
| Table 7. Comparison of Homestead Tax Rates in Selected Cities | ||||||
| Buffalo | Rochester | Niagara Falls | ||||
| Year | Homestead | Non-Homestead | Homestead | Non-Homestead | Homestead | Non-Homestead |
| 85-86 | 29.22 | 46.59 | 35.07 | 55.96 | ||
| 86-87 | 21.04 | 38.74 | 37.82 | 60.05 | ||
| 87-88 | 20.66 | 39.22 | 37.45 | 64.68 | ||
| 88-89 | 28.35 | 34.46 | 22.03 | 41.97 | 39.42 | 70.94 |
| 89-90 | 29.66 | 36.49 | 23.44 | 43.27 | 40.84 | 74.99 |
| 90-91 | 31.49 | 40.19 | 22.93 | 45.27 | 42.05 | 78.50 |
| 91-92 | 33.72 | 44.43 | 24.91 | 48.91 | 43.41 | 84.32 |
| 92-93 | 39.08 | 52.95 | 25.92 | 50.99 | 43.47 | 83.66 |
| 93-94 | 26.87 | 48.05 | 26.09 | 52.92 | 30.35 | 69.59 |
| 94-95 | 23.40 | 43.04 | 26.87 | 53.07 | 30.94 | 66.56 |
| 95-96 | 24.89 | 42.67 | ||||
Homestead tax option used – dual tax rates
City of Syracuse ** refer to the cover letter for general information
Onondaga county ** and informal meeting procedures
Assessment disclosure notice
For information only – this is not a tax bill
Owner Information: 311500210
Parcel Information: Single Family Residence
Front Feet: 50
Depth: 128
Your parcel has been designated as homestead our property will have a preliminary assessment of $70,000
As of January 1, 1996 which is 100 percent of full value.
****your last year’s assessment was $5,300
The tax amounts shown are estimates based on last year’s budget and indicate how your taxes would be affected if your preliminary assessed value were in effect. It does not reflect future tax liability. Actual tax dollars to be paid in the future will depend upon changes in the budgets adopted by each jurisdiction, other property assessment changes, exemptions, state aid changes and reapportionments of county and school tax levies.
| Your Prior Year’s Taxable | Your Current Year’s Preliminary | Approximate Tax Dollar Liability |
|||
| Tax Jurisdiction | Assessment | Taxable Assessment |
Prior Year | Current Year | |
| County | HMSTD | $5,300 | $70,000 | 730 | 871 |
| City | HMSTD | $5,300 | $70,000 | 273 | 278 |
| School | HMSTD | $5,300 | $70,000 | 742 | 764 |
| Approximate Total Taxes: | 1,745 | 1,913 | |||
| (Estimated Tax (Increase)* | 168 | ||||
The above figures compare your prior year’s taxable assessed value to your current year preliminary taxable assessed value in each taxing jurisdiction. Taxable assessed value is your assessed value minus applicable exemptions.
You should examine the tentative assessment roll regardless of this notice or discussions at assessment, in order to protect your tight to assessment review, you must file a formal written complaint with your board of assessment review on or before the date set by law.
This is not an estimate of taxes owed nor is it an advisement of a refund.
Homestead tax option used – dual tax rates
City of Syracuse ** refer to the cover letter for general information
Onondaga county ** and informal meeting procedures
Assessment disclosure notice
For information only – this is not a tax bill
Owner Information: 311500464
Parcel Information: Office Building
Front Feet: 72
Depth: 132
Your property will have a preliminary assessment of $329,500
as of January 1, 1996 which is 100 percent of full value.
Your last year’s assessment was $35,000
The tax amounts shown are estimates based on last year’s budget and indicate how your taxes would be affected if your preliminary assessed value were in effect. It does not reflect future tax liability. Actual tax dollars to be paid in the future will depend upon changes in the budgets adopted by each jurisdiction, other property assessment changes, exemptions, state aid changes and reapportionments of county and school tax levies
| Your Prior Year’s Taxable Assessment |
Your Current Year’s Preliminary Taxable Assessment | Approximate Tax Dollar Liability | |||
| Tax Jurisdiction | Prior Year | Current Year | |||
| County | Non-HMSTD | $35,000 | $329,500 | 4,820 | 4,100 |
| City | Non-HMSTD | $35,000 | $329,500 | 1,801 | 1,807 |
| School | Non-HMSTD | $35,000 | $329,500 | 4,898 | 4,915 |
| Approximate Total Taxes: | 11,519 | 10,822 | |||
| Estimated Tax (Decrease)* | 697 | ||||
The above figures compare your prior year’s taxable assessed value to your current year preliminary taxable assessed value in each taxing jurisdiction. Taxable assessed value is your assessed value minus applicable exemptions.
You should examine the tentative assessment roll regardless of this notice or discussions at assessment, in order to protect your tight to assessment review, you must file a formal written complaint with your board of assessment review on or before the date set by law.
This is not an estimate of taxes owed nor is it an advisement of a refund.
Homestead tax option not used – uniform tax rates for all property
City of Syracuse ** refer to the cover letter for general information
Onondaga county ** and informal meeting procedures
assessment disclosure notice
For information only – this is not a tax bill
Owner Information: 311500464
Parcel Information: Office Building
Front Feet: 72
Depth: 132
Your last year’s assessment was $35,000
The tax amounts shown are estimates based on last year’s budget and indicate how your taxes would be affected if your preliminary assessed value were in effect. It does not reflect future tax liability. Actual tax dollars to be paid in the future will depend upon changes in the budgets adopted by each jurisdiction, other property assessment changes, exemptions, state aid changes and reapportionments of county and school tax levies.
| Your Prior Year’s Taxable Assessment |
Your Current Year’s Preliminary Taxable Assessment | Approximate Tax Dollar Liability | |||
| Tax Jurisdiction | Prior Year | Current Year | |||
| County | HMSTD | $5,300 | $70,000 | 730 | 871 |
| City | HMSTD | $5,300 | $70,000 | 273 | 325 |
| School | HMSTD | $5,300 | $70,000 | 742 | 866 |
| Approximate Total Taxes: | 1,745 | 2,082 | |||
| Estimated Tax (Increase)* | 337 | ||||
The above figures compare your prior year’s taxable assessed value to your current year preliminary taxable assessed value in each taxing jurisdiction. Taxable assessed value is your assessed value minus applicable exemptions.
You should examine the tentative assessment roll regardless of this notice or discussions at assessment, in order to protect your tight to assessment review, you must file a formal written complaint with your board of assessment review on or before the date set by law.
This is not an estimate of taxes owed nor is it an advisement of a refund.