A shift in town residential assessments has caught North Colonie officials off guard.
As a result, residential properties are to bear the lion’s share of school taxes this year. However, increased state aid, other revenues and the district’s fund balance will be utilized to keep the increases in check.
Between a rock and a hard place, the board of education unanimously passed the 2006-2007 tax rate at 7.78 percent for residential properties and 1.72 percent for commercial.
The tax shift to residential properties over commercial is the first in 10 years, said school officials. The shift accounted for a tax increase of approximately $66 per home assessed at $200,000 over May’s approved budget.
What really affected us is a very large shift in base proportions to residential properties. It could have been worse, but there is a (state) cap at three percent, said Steve Zautner, district treasurer.
Base proportions are rates set by the state that are used by school districts to estimate the percentage of the tax levy to be paid by residential and commercial properties. In the last 10 years, properties in the North Colonie district have hovered at an average .5 percent base proportion. When putting together this year’s budget, school official anticipated no base proportion change.
However, this year that figure peaked at three percent and could have gone higher if not capped. On Aug. 16, the town assessment office issued its annual assessed value of the town.
Assessed residential properties in the North Colonie district jumped by more than $32 million, a result of new construction and additions. The last town wide reassessment was completed in 2001. The next is scheduled for completion in 2008.
School district officials estimated a 1.5 percent jump in assessments when they put together this year’s budget. On average, the town assessment has steadily increased by 2 percent over the last 10 years.
With those figures in hand, the approved budget passed with a 5.94 percent residential property tax increase and a 5.96 percent increases for commercial properties. The spike in residential assessments nearly doubled the approved rate at 10.96 percent. Commercial property tax rates came back at 1.18 percent, nearly five percent less than the approved commercial tax rate.
The shift left the district’s revenue line for this year’s budget $2.7 million less than anticipated.
The district’s game plan ` which it set in action on Monday ` offsets increases with $1.7 million, ultimately lowering the overall tax levy and with it, taxes rates. The remaining $1 million difference is to be raised through taxes.
The school will allocate $500,000 in interest rate revenue, $200,000 in state aid and $1 million from its reserve fund to reduce the tax levy from $59,406,617 to $57,706,617. The new levy will call for residential properties to pay a 7.78 percent tax rate increase and commercial properties to pay a 1.72 percent increase.
Residential assessments in Colonie have been on a steady increase over the last several years, according to town officials. New developments and improvements to homes drove the residential assessment increases. There are a number of factors responsible for the town-wide decrease in commercial assessments, said Chris Semon, town assessor. He made note of recent actions that reduced some properties in the town well into the millions.
One such property, the Latham Shopping Center had its assessment lowered by $13 million to a total assessment of $26 million, after settling a tax certiorari case with the town, Semon said.
North Colonie’s approved budget will go unchanged as far as services and added programs it made as a result of last year’s revenues. It has always remained a goal to keep the district taxes at a minimum, said Randy Ehrenberg, district superintendent. But, this time officials and board members’ hands were tied, she said.
`It’s with heavy hearts that these decisions had to be made,` Ehrenberg said.
Taxpayers at Monday’s board meeting were disappointed with board members and fear that taxpayers could look at the board in future elections and budgetary votes as misleading. The district sold the proposed tax rate of 5.94 percent for residential properties and that’s what voters approved, said Allan Goldsmith, a former board of education member.
`Our word to the voter must take precedence over your decision to not apply savings to the tax rate. I served on this board 10 years and at no time did we ever raise taxes more than our commitment to the voters,` said Goldsmith.“
