The Rotterdam Town Board unanimously voted at its special meeting Wednesday, Feb. 21, to adopt the Homestead Tax Option, which would establish separate tax rates for commercial and residential properties.
Despite the affirmative vote, the general consensus at the meeting was that there was still some confusion because no concrete numbers were available to show who would be benefiting and who would harmed by this option.
The state requires the board to vote on the option prior to the March 1 mailing of Disclosure Notices to residents.
If the town didn’t adopt the law, the school boards at Mohonasen and Schalmont wouldn’t even be able to consider the option.
In order for the school district to take advantage of the potential for homestead tax rates, the town as the assessing unit has to take action, said Supervisor Steve Tommasone.
The Homestead Tax Option is a local law under the state Office of Real Property Services that gives munici-palities the ability to tax commercial property at different and often higher rates than residential property.
In a municipality where the assessments haven’t changed, commercial property owners are paying more in taxes relative to residential property owners.
During a revaluation, which Rotterdam is undergoing this year, residential and commercial properties are taxed at equal rates, but because residential properties increase in value faster, the tax burden falls to the residential property owners.
The tax option is usually not favorable to business.
Elden Smith, a representative from the Golub Corp., said the company does not support the Homestead Tax Option.
`A dual tax rate, one for residential and a higher one for other classes is inequitable and unfair,` Smith said. `The purpose of the revaluation was to get taxes on a level playing field. This is not good for taxes or for the community.`
Smith said businesses generate property tax and sales tax revenue, which goes back to the town and then to the residents. He said businesses support the school system and don’t send their children there. He also said a two-tier tax system would discourage businesses from investing in the area and would undermine the economic development of Rotterdam.
Smith pointed out that while the Golub Corp. is a large business employing nearly 2,500 people in Schenectady County, the majority of businesses in Rotterdam are smaller entities run by people who also live within the town.
`Like the motto goes: Rotterdam is a nice place to live. Let’s keep it a nice place to do business,` Smith said.
Former Supervisor John Paolino agreed with Smith saying, `When you look at the commercial wealth of our town, the majority are moms and dads that open their doors and go back to their homes in the town of Rotterdam. I think for those people, it is in their best interest to not go through with the Homestead Tax Option.`
Town assessor John Macejka said the rough numbers he received from assessment firm GAR Associates in December pointed to a significant shift to residential taxpayers.
`There showed a significant shift, no doubt about it. It was greater than we anticipated,` he said.
Macejka said the shift seems to be more prevalent in school taxes than in town taxes.
Chairwoman of the Mohonasen School Board Nancy DelPrado said the board wasn’t pushing for the Homestead Tax Option because there wasn’t enough information available to make a clear decision.
`From Mohonasen’s point of view, we want to do what’s best for the residents. We’ll support whatever the town decides,` she said.
Macejka said adopting the Homestead Tax Option would require the town to set two separate tax rates, but those rates could be 5 cents apart. By not adopting the option, the two other taxing entities within the town, the Mohonasen and Schalmont school boards, wouldn’t have that option available.
`Our duty is to afford the school boards the same option under the law that we are afforded,` Tommasone said.
Deputy Supervisor Joseph Signore said, while he has not supported the reassessment project, he is in favor of the Homestead Tax Option because it would allow other entities the option.
`I’m apprehensive about this homestead tax because I don’t see it being useful, I don’t see a lot of people benefiting, and I see it being an administrative nightmare, but I don’t want my feelings affecting the option for others,` he said. “