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Nov 12, 2019

Citywide revaluation doesn’t mean an automatic tax hike

Buffalonians are bracing for the impact of their 2020 reassessments, the new property values based on the first citywide revaluation since 2001.

How so? The Common Council recently established a property tax exemption for about 350 low-income senior citizen homeowners in targeted areas who would otherwise be affected by the reassessment. Council members now hope to expand the program to other seniors citywide. And a community-based coalition is still pushing for broader income-based exemptions regardless of age.

Reassessment has also caused controversy in Cheektowaga after officials there unexpectedly canceled a townwide reassessment project on residential properties. The town then reversed course again and reinstated the reassessment after some board members conceded they were mistaken in thinking canceling the update would protect senior citizens.

And following Amherst’s 2017 reassessment project, property owners there saw a 1% increase in their 2018 town taxes. A $39 million increase in assessed value from new construction broadened the tax base and kept the tax increase to 1%, officials said at the time.

The common concern: That new assessments automatically mean higher property taxes.

Buffalonians are bracing for the impact of their 2020 reassessments, the new property values based on the first citywide revaluation since 2001.

How so? The Common Council recently established a property tax exemption for about 350 low-income senior citizen homeowners in targeted areas who would otherwise be affected by the reassessment. Council members now hope to expand the program to other seniors citywide. And a community-based coalition is still pushing for broader income-based exemptions regardless of age.

Reassessment has also caused controversy in Cheektowaga after officials there unexpectedly canceled a townwide reassessment project on residential properties. The town then reversed course again and reinstated the reassessment after some board members conceded they were mistaken in thinking canceling the update would protect senior citizens.

And following Amherst’s 2017 reassessment project, property owners there saw a 1% increase in their 2018 town taxes. A $39 million increase in assessed value from new construction broadened the tax base and kept the tax increase to 1%, officials said at the time.

The common concern: That new assessments automatically mean higher property taxes.

“Twelve years ago we had reserves, and we cut reserves and taxes. Doing that took the reserve from 15% to 10%,” Kulpa said, adding that for the next eight years, the administration kept taxes flat while continuing to cut into reserves. “In 2019, I had a problem because reserves were down below our own 10% limit. We’ve been struggling to try to catch up. Over the next three years, we have to grow our reserves. … It’s still a healthy reserve. We’re probably at 8%. I’d like to be up at 10%.”

The bottom line: Amherst’s tax increases were in part a result of the need to replenish reserves after years of tapping them to balance budgets, not – or not just –  because of its revaluation.

“Last year in 2019, we used some of our increase in taxes to directly replenish our funds. We actually had lines that said ‘replenish’ fund balance,” Kulpa said.

In addition, the retirement incentive in the 2020 budget will “indirectly help us replenish the reserves.”

“This year in the 2020 budget, part of our tax increase is going to cover our retirement incentive. It is being used to replenish the reserves but in a more indirect route,” he said.

In Buffalo, where officials say there’s been no talk of a tax hike despite the warnings about depleted reserves, the challenge sounds similar – revaluation or not.

Published in The Buffalo News, Oct. 31, 2019

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