Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 98, no. 2529: Articles]: September 2, 1916

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REAL ESTATE AND NEW YORK SEPTEMBER 2, 1916 DIRECT STATE TAXES AS THEY AFFECT THE CITY Comptroller Prendergast Files Statistics Showing Unequal Appor¬ tionment and Asks for More Equitable Basis of Distribution /^ OMPTROLLER PRENDERGAST ^-^ filed with the members of the State Board of Equalization today the results of an examination made in the Bureau of Municipal Investigation and Statis¬ tics, of the Department of Finance, for the purpose of determining the average rates at which real property is assessed in nine large counties of the State out¬ side the City of New York. The exam¬ ination included the counties of .\lbany, Erie, Monroe, Niagara. Oneida, Onon¬ daga, Rensselaer, Schenectady and Westchester, which counties in 191S con¬ tained more than fifty-five per cent of the total assessed valuations of real property located outside the City of New York. Rates of Assessment. The examination shows that the rates at which real property was assessed for the year 1915 in the nine counties ex¬ amined range from an average rate of assessment of forty-eight per cent in Ni¬ agara County to seventy-five per cent m Rensselaer County, and that compared with the ratios fixed by the State Board of Equalization last September for these nine counties, the results of the exam¬ ination indicate that real property in .these counties was assessed at from six to twenty-four points lower than the ratios fixed by the Board of Equaliza¬ tion, as shown in the following tabula¬ tion: -3.0 z a„ ni I-i N ' S= t. 71 16 61 14 64 14 48 20 51 24 70 12 7.5 14 &■? 12 60 G (S < County. Albany ............ 87 Erie............... 75 Monroe ............ 78 Niagara ...........68 Oneida ............ 75 Onondago .......... 82 Rensselaer ......... 80 Schenectady ....... 75 Westchester ....... 75 This examination was made for the purpose of securing reliable data for the information and guidance of the Board of Equalization which will meet early in September to adopt the 1916 county equalization table on the basis of which the Direct State Tax is appor¬ tioned. Apportionment of Taxes. State taxes arc apportioned among the counties in proportion to the value of the taxable property within their limits, as disclosed by the assessment rolls of the several towns and cities included in each county. But all counties in the State do not assess property in the sama way. Some, like those comprising the City of New York, assess property at full value, other tax districts assess property at 80 per cent, of full value, and still others as low as 25 per cent, of the true value. Therefore, in order to overcome the inequality which would result if State taxes were apportioned on the basis of local returns of assessed valuations, that is, on the basis of the amount assessed on the local tax rolls, the law provides that the aggregate as¬ sessed valuations of real property in the several counties of the State shall be reviewed by the Board of Equalization, HO.W WILLIAM A. PRENDERGAST. whose function it is to prepare a table upon which the State tax may be so ap-_ portioned that the share imposed upon each county shall bear a just relation to the true value of the taxable property contained therein. Generally speaking, the Board of Equalization adjusts the assessed valua¬ tions as returned by the several coun¬ ties by first determining the full value of real property in each county. Then it determines the average rate of as¬ sessment throughout the State by find¬ ing the ratio that the actual assessments bear to the full value as determined by the board. When the aggregate assessed valuations of those counties whose rate of assessment, as determined by the l)oard, is lower than the average rate l^or the entire State, the valuations are increased so that the ratio of assessed value to the full value of such county property is equal to the average rate for the State, and the assessed valuations for those counties whose average rate of assessment is greater than, the average rate for the State, are decreased, so that when the mileage rate fixed by the Leg¬ islature for the taxation of all property is applied to the assessed valuations a., equalized, each county is presumed to pay its just share of the ta.x. Value Determined. To determine the full value of prop¬ erty in any county it is necessary for the board to know the actual rate at which property is being assessed. If the as¬ sessed valuations of a county are re¬ turned as $50,000,000, and it is known, througli an investigation based on coin- parisons between appraised values or selling prices and assessed valuations that property is assessed at approxi¬ mately fifty per cent., it is evident that the full value of the taxable property within the county is $100,000,000, and that if the average rate of assessment throughout the State is eighty-five per cent., then such county ought to pay a State tax on $85,000,000 and not $50,- 000,000 as assessed on the local tax rolls. The inequalities of the apportionment for many years past have been made the means of compelling the City of New York to bear a much greater portion of the State tax than should fall to its share. The efforts of the city authorities heretofore have been directed toward the fixation of more appropriate ratios for the counties in this city. Not until . last year was any efifort made to inaucfs the Board of Equalization to adjust more equitably the ratios of the up-State counties in the equalization table. Examination Made. During the spring and summer of 1915 Comptroller Prendergast caused an ex¬ tensive examination to be made by the Bureau of Municipal Investigation and Statistics into the whole subject of equalization and apportionment as ap¬ plied throughout the country. A com¬ prehensive report upon the subject was presented to the delegates to the State Constitutional Convention with the view of securing a constitutional amendment that would insure greater equality of assesstnents throughout the State. At the same time the Comptroller prepared data for the use of the Board of Equal¬ ization to enable that body to deter¬ mine more accurately than in the past the relation which assessed values bore to true or full values in ten of the large cities of the State. The results of this study were filed with the State Tax Commission in time to receive cons.'oer- ation at the annual meeting of the State Board of Equalization last year. When the State Board of Equaliza¬ tion met last Septemlier, it not only fixed lower ratios for several counties whose bases of assessment of real property did not justify the high rates fixed by previ¬ ous boards, but it also increased the ra¬ tios for three of the largest counties within the limits of the city, by fixing the ratio for New York county at ninety-three instead of ninety-one per cent., and by increasing by one point each of the ratios of Bronx and Kings counties. Increases Obtained. These were substantial increases, for it should be remembered in this connec¬ tion that these three counties contain more than sixty-six per cent, of the to¬ tal assessed valuations of real property in the entire State. Expressed in dollars and cents, these decreases in the rates of outside counties and increases in the ratios of city counties, meant that the counties comprising the City of New York paid several hundred thousand dol¬ lars less of last year's Direct State Tax than it would have paid had the ratios for all counties remained unchanged from the previous year. This year with a copy of the results of the recent examination in the hands of each and every menilier of the Board of Equalization. Comptroller Prender¬ gast hopes, that when the board meets to adopt the 1916 equalization table it will be in a better position than ever before to fix accurately the ratios of the several counties of the State and that in consequence, when a Direct .State Tax is apportioned the City of New York will not have to pay more than its fair share of such tax.