Colonie officials have passed legislation in an attempt to temporarily rein in a continued shift in town and school tax levies to residential taxpayers.
Now they are waiting for state legislators to pass the bill in both the Assembly and Senate to allow municipalities with two-tier tax systems (commercial and residential) to temporarily freeze any shifts not to exceed 1 percent.
What it (the 1 percent cap) is doing for this year is it’s not going to burden the residential class, said Chris Semon, Colonie’s sole assessor.
The current cap, set by the state’s Office of Real Property Services, is at 5 percent.
The two-tier tax system is in place to keep any one of the taxpayer classes from paying an overwhelming share of the levy. The 5 percent mark is meant to keep tax increases and decreases to a minimum when the levy shifts to or from commercial or residential taxpayers.
Semon said that what has occurred lately is, proportionally, residential assessments have increased well past commercial assessments. In 2006, homeowners paid 58 percent of the levies and commercial entities paid 41 percent. The same happened again this year. Semon attributes that split to new construction, mainly in Colonie’s north end, and changes in the market values of homes.
Colonie adopted the two-tier system in 1993 to evenly distribute the levy over both commercial and residential classes. At the time, commercial property owners were paying a greater share of all taxes levied for both town and school.
In recent years, the opposite has happened. Residential assessments are proportionally exceeding commercial assessments. The greatest impact has come from school taxes, where between 2 and 4 percent base proportion shifts account for annual tax increases in the hundreds for many homeowners.
Because of that, Colonie’s school districts, North and South Colonie, Maplewood and Niskayuna have been in negotiations with town officials to either do away with the two-tier system, or back state Legislature bills promoting the 1 percent cap sponsored by Assemblyman Bob Reilly, D-Colonie, and Sen. Neil Breslin, D-Delmar.
Doing away with the two-tier system is still an idea being tossed around, said Steve Zautner, treasurer and purchasing agent for the North Colonie School District. Board of education members will discuss dropping the system when they put together the 2007-2008 budget numbers in late August, he said. The 1 percent cap on proportion shifts will come into play then.
`For years it’s (the base proportion shift) gone up and down a little bit and altered back and forth. Lately it has shifted to the homestead taxpayers. In 2007-2008, estimates look like the rates (commercial and residential) may be the same,` said Zautner.
Even though the rates will be close to equal next year, Zautner said the 1 percent cap on any proportional shift will help to decreases residential rates and slow continued decreases in the commercial levy.
North Colonie officials are anticipating a shift in the base proportion from this year’s tax levy to the 2007-2008 budget to account for a more than 6 percent increase in the residential levy and a decrease of 5 percent for commercial.
Semon warns against doing away with the two-tier tax system, a system that is rarely used statewide, because it is designed to benefit residential taxpayers, he said.
Semon said that despite the fact that the residential and commercial rates are closing in on each other for next year’s budget numbers, the fact remains that year to year, the proportions will continue to shift. Having the home rule option to cap that shift at 1 percent would be the best option to curb steep increases or decreases, he said. “