The Pros and Cons Of Reassessing In East Hampton

East Hampton Town has never conducted a town-wide property reassessment.

The word reassessment itself implies that there has been one assessment of all property according to one standard. In fact, each property in the town has come onto the assessment roll separately and individually, as it was built, or through a review requested by the homeowner.

This is in contrast to Southampton Town, which had the most recent reassessment in 2009, and several before that. New York State law provides that all property within a municipality be assessed at a uniform percentage of market value.

During a recent interview, East Hampton Town Assessor Jill Massa expressed her desire for a reassessment in the near future.

“I’m sure Southampton Town would be available to assist us with any questions about a reassessment that we may have,” she said. “The New York State Office of Real Property Tax Services is also available to assist and guide towns undertaking a reassessment. Over the years, we have had several meetings concerning the reassessment process, the last of which was in 2009 when John Wolham, Regional Director of ORPTS, gave a presentation.”

She added, “Reassessment is a complex process. As time goes on, more and more people understand that revaluations are a necessary part of the assessment process to ensure a fair and equitable assessment roll.”

One obstacle to reassessing is the cost, which could total $2.85 million, she said.

“East Hampton Town has been given budgetary estimates for a reassessment from a company called Tyler CLT, a specialist in mass appraisal of municipalities. The last estimate we received was in 2009 for the amount of $2,850,000,” Ms. Massa reported.

New York State could provide some of the money. In Southampton Town’s case, state funding totaled $200,000. In East Hampton, it would be approximately $125,000 ($5 per parcel, subject to change).

The state is encouraging towns to reassess and to value properties at 100 percent, as is the case in Southampton. In East Hampton, the residential assessment ratio is currently at an average of .74 percent.

“The Residential Assessment Ratio, or RAR, is calculated by the State of New York, using statistical analysis of the prior year’s sales,” Ms. Massa said. “The ratio represents a weighted mean, which is the sum of all assessed values divided by the sum of all sales prices. Last year, the RAR was .74 percent, showing a slight decline in the market.”

Whether the town-wide percentage assessment stays at .74 or goes to 100 percent does not, in and of itself, affect the bottom line on the tax bill, as each property is multiplied by the same percentage rate to determine taxes collected. The 100 percent rate is easier to understand relative to the market value of the property. Homeowners would not have to do any math to see how the town has valued their property, as is the case now.

Presently, homeowners with property valued lower than market value are being subsidized by those whose property is being taxed at an inequitably higher rate.

All homes will be in the pool of those reassessed, however, old assessments, especially those properties first assessed in the 1950s and today valued at more than $3 million, will be paying considerably more, which could bring down the rate for everyone. The cons to reassessment include the possibility that some older individuals living in modest homes that were originally assessed in the 1970s or earlier, will see taxes go up considerably. But seniors have options in regard to property tax relief.

The Southampton Town website reports “It is to the taxpayers’ benefit when reassessments occur frequently, because it ensures each property owner is treated fairly.”

“The ‘Unknown Factor’ is keeping some from supporting a reassessment,” Ms. Massa said.

After the 2009 reassessment in Southampton Town, some complained that their tax rates had soared. That year could be considered to be the peak before the drop in real estate values, so those reassessed at that time could be justified in complaining that they are paying taxes at inflated values.

The cost of a town-wide reassessment would be offset somewhat by revenue now being lost, due to one-third of all properties being underassessed.

“We don’t have the upside,” Ms. Massa said.

Property taxes are a source of resentment in East Hampton Town, as those without children protest swelling school budgets. Statewide, school taxes make up approximately 60 percent of a homeowner’s tax bill.

As time passes without a reassessment in East Hampton, the burden falls on the individual homeowner to file for a grievance. And as grievance filings soar, the pressure for a town-wide reassessment increases.

“It speaks volumes to having a reassessment,” Ms. Massa said.

At least one other member of East Hampton Town government agrees that there should be a reassessment, but that there will be some red tape.

“I believe the town should have a reassessment,” Town Councilwoman Theresa Quigley said during a recent interview. “I followed the Southampton Town process closely, and there’s a year of back and forth after reassessment is completed. The expenses of the aftermath, where adjustments are being made, must also be factored into the decision. This board has not undertaken any capital expenditures because we still don’t have all of our audits back. Until we’re clear, we will not move ahead. When it’s time, we’ll float a bond, which requires four members of the Town Board to vote for it.”