Most Americans are generally familiar that there is a “pecking order” when it comes to government. The federal government sits at the top, then come the states followed by the counties, and then all of the various forms of local government from towns to cities to villages and then school districts.
In New York state, townships and cities tend to be deemed at the same level — at least when it comes to the property tax. A town cannot tax county property but it can tax a city — case in point, the town of Poland taxes the city of Jamestown for its investments in the town including its water wells and sewage treatment plant located in the town.
This issue came into focus recently with an announcement by the Falconer School District that the valuation of the town of Poland had decreased in large measure because the value of the city of Jamestown sewer plant had been decreased by about $5 million. What that means is that the BPU (a subsidiary of the City of Jamestown) probably won’t be paying as much in school and town taxes as it formerly was. Good for the BPU, not so good if you live in the town of Poland or the Falconer School District.
It is crazy, in a way, that residents in the city of Jamestown or the BPU service area should be paying school taxes in Falconer — but that is the law in the great state of New York.
The complexity of the matter goes even deeper. Property taxes get “out-of-whack” as assessments don’t keep up with real values. When that happens, the state of New York issues an “equalization rate adjustment.” (If your town has an equalization rate of 85%, it means that your assessment is about 85% of what the real or full value really is supposed to be.)
The trouble, of course, with equalization rates is that they often don’t keep up with what actual or real valuations are. It appears from news reports, that when the town of Poland went through a recent “reval,” that the value of the town had actually decreased from that assumed by applying the equalization rate from the state. As you can see, it is quite a convoluted process and is why the state Board of Equalization and Assessment is always trying to get municipalities to achieve 100% valuation of assessed property every year.
So, what is the bottom line? What does this mean for everyone involved? It does not mean that the Falconer School District or the town of Poland will reduce their tax levy — it just means that the payment of it will be distributed differently. It is matter of “whose ox is getting gored?”
In this case, the BPU and its ratepayers may be getting a little bit less “gored” by taxes levied against the sewer plant. Other taxpayers in the town and school district will have to “pick up the slack.”
In defense of the school district, they are really at the bottom of the food chain when it comes to the governmental “pecking order.” They have no control over how the assessment process works. They have two main sources of revenue — state aid from Albany and the property tax levy. They do technically have control over their expenses, but are at the mercy of others when it comes to bringing in the revenue.
Thus, it goes at the local levels of government in the Empire State. If you are confused by it all, you are in the company of many. Not even the people paid to administer this process totally understand it.
Published by The Post-Journal