Council Member Joseph Borelli and Minority Leader Steven Matteo are today responding to the Independent Budget Office’s (IBO) report on Class 1 property tax equity, as a result of a request by the council members to look into a potential disparity. The Council Members disagree with the IBO on the following points:
- The IBO did not look at time adjusted sales and weighted averages for FY 16, and focused exclusively on calendar year 2015. A broader look at data indicates that Brooklyn and Manhattan assessments are below accepted assessment levels. (Calculations of other random sampling concluded that Staten Island class-1 properties had a fair market value of $958,139,000 and a total time-adjusted sales price of $973,206,874, making the weighted time-adjusted mean ASR of .985; while Brooklyn has an FY16 fair market value of $2,134,482,000 and time-adjusted sale price of $2,410,629,957 making its weighted time-adjusted ASR .885; and, Manhattan’s market value was $574,469,000, time-adjusted sale price $658,499,868, and a weighted time-adjusted ASR of .872. This means that Staten Islander’s on average pay 98.5% of their actual market values, while average Brooklyn and Manhattan class-1 homeowners pay 88.5% and 87.2% respectively. The city-wide average of the other sample concluded that the citywide average ASR was .934, itself below the recommended average.)
- The IBO asserts that the accepted Assessment Sales Ratio (ASR) from the International Association of Assessing Officers (IAAO) is between .90 – 1.10 of fair market value, while the IAAO accepted ratio for Indirect Equalization (which our assessment modelling more resembles) is .95 – 1.05, which would put Brooklyn, Manhattan and the citywide average below the accepted levels.
- IBO acknowledged that “Staten Islanders face a higher tax burden relative to property value in 2016 compared with other boroughs; less of their household income goes to the property tax compared with single-family homeowners elsewhere outside of Manhattan.” To assume this is acceptable would be to assume the property tax is no longer an ad valorem tax on property, but a progressive tax on higher income earners.
Further, Council Members Borelli and Matteo and Staten Island attorney John Zaccone are weighing a lawsuit challenging the Department of Finance on:
- The disparity of class-1 ASR’s between Staten Island and the other four boroughs.
- The city’s violation of the state constitutional provision limiting the property tax levy to 2.5% growth for operating expenses.
- The methodology of calculating class-1 assessments
The Council Members are asking for homeowners who would like to be considered as plaintiffs in this potential suit to call Council Member Borelli’s office at 718-984-5151 and speak to Frank Mascia.
Said Borelli, “It isn’t surprising that Staten Islander’s pay a higher ratio of their market value in property taxes, but what is surprising is the willingness of the city to allow it to continue. We understand the IBO’s rationale as to why this occurred in the past, but the notion of why it should continue to occur is wrong. A property tax is a tax on the value of one’s property and ought to be equal regardless of where the home is located, or the income level of the person who owns it.”
Said Matteo, “Though I disagree with some key parts of IBO’s analysis, it does confirm what we already know: That Staten Island homeowners pay the highest property taxes relative to real market values, and that the property tax system is extremely flawed an unfair. We need to make some fundamental changes to ensure the burden of property taxes falls equally on all homeowners, regardless of neighborhood.”
Said Zaccone, “At the request of Council Member Borelli, I am carefully reviewing the report issued by the Independent Budget Office, as well as the Stark Report, which details the way that New York City has and continues to levy property taxes in violation of the plain language of the New York State Constitution. Once the ramifications of these two reports have been discussed and analyzed, I shall meet with Council Member Borelli to discuss how to proceed to protect the rights of fellow Staten Island taxpayers.”
The complete report can be reviewed here.