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Scarsdale Board of Trustees Vote NO on Homestead Tax Option: LWVS Concurs

tzAt a special meeting of the Board of the Town of Scarsdale on Tuesday March 4, the Trustees voted unanimously (7-0) against the adoption of the Homestead Tax Option which would have tripled real estate taxes for owners of 42 condominiums at Christie Place in Scarsdale Village. The option to adopt Homestead was considered in conjunction with the Village-wide tax revaluation currently in process in Scarsdale. Homestead was originally adopted by New York State to permit the balancing of the tax burden between the residential and commercial tax classes following a revaluation. Since Scarsdale is 94% residential, Homestead would have had little impact on the allocation of the tax burden between these two classes. Instead, the option was under consideration in Scarsdale only to reclassify condominiums so that they would be assessed as single-family homes. The Village's inventory of co-ops would continue to be assessed on an income basis, giving them a substantial tax advantage over condominiums.

Trustees spoke eloquently on the issue, explaining the reasoning behind their votes. They cited fairness, the intent of the Homestead law, the inequity between condos and coops, the burden on condo owners and their inability to know that a major tax increase could be imposed. A recap of the meeting will be posted tomorrow.

The adoption of the Homestead Tax Option was supported by the Scarsdale Forum. Bob Berg and Bob Harrison both reiterated their case for the option at the meeting along with Robert Selvaggio and Martin Kaufman. However, The League of Women Voters of Scarsdale did not support the adoption of Homestead and Linda Doucette-Ashman read excerpts from the following statement at the meeting:

Here is the LWVS Consensus Statement on the Homestead Tax Option:

On Thursday, February 27, 2014 the League of Women Voters of Scarsdale (LWVS or the League) held an information meeting, open to the public, regarding the adoption by the Town Board of the Town of Scarsdale (Town Board) of the provisions of Section 1903 of the Real Property Tax Law, commonly referred to as the Homestead Tax Option. During the information meeting, Linda Doucette-Ashman, chair of the LWVS ad hoc committee on the Homestead Tax Option (the Committee), presented a brief overview of the Homestead Tax Option, including the purpose of the Tax Option and the effect of its adoption, and panelists John Wolham, Regional Director of the New York State Office of Real Property Tax Services, New York State Department of Taxation and Finances, and Nanette Albanese, Scarsdale Town/Village Assessor, responded to questions from the Committee and the audience regarding the Homestead Tax Option. A consensus meeting of the members of the League immediately followed.

Background
In municipalities that have not reassessed in many years, the assessment of residential properties is typically lower compared to their full or market value than other types of property such as commercial property. In these situations, residential properties as a class would bear a larger portion of the tax burden after a reassessment. As a result of the concern for tax-burden shifts to residential homeowners, the law in 1981 provided for the Homestead Tax Option.

The Homestead Tax Option requires every property to be classified as either homestead, which includes single-family homes, or non-homestead, which includes commercial property. In addition, condominiums built as condominiums must be included in the homestead class of property. Adoption of the Homestead Tax Option allows the assessing unit to set two different tax rates: a lower tax rate for residential property (homestead) owners and a higher rate for all other property (non-homestead) owners. The tax rate for the homestead owners is based on the share of property taxes paid by the residential class of property owners in the year before the new assessments from the revaluation are used.

The purpose of the Homestead Tax Option is to help communities prevent a shift in the tax burden from commercial properties to residential properties at the time of revaluation. Adoption of the Homestead Tax Option is not mandated; it is a choice for the local governing body of the assessing unit to consider at the time of revaluation, typically to insulate residential property owners, as a group, from bearing a larger share of the tax burden after revaluation.

A town-wide revaluation has been undertaken in Scarsdale with the new tax assessments to be implemented on the June 1, 2014 assessment roll. If the Homestead Tax Option is to be adopted, the Town Board must adopt a local law adopting the Homestead Tax Option sixty days prior to the Town tentative assessment roll filing date, June 1, 2014.

We understand that the Town Board is not looking to adopt the Tax Option for the purpose of preventing a shift in the tax burden from commercial properties to residential properties by establishing two separate tax rates since the shift in tax burden would be negligible.

The Town Board is considering adopting the Homestead Tax Option only to "value and assess certain qualifying condominiums in the same manner as single-family residences," the result of classifying condominiums, built as condominiums, as part of the homestead class.

If the Homestead Tax Option is adopted, the classification of condominiums, built as condominiums, will change the method of valuation for those condominiums from the income approach (the method required by law to be used for all cooperative and condominiums) to the market value approach (the method used for single-family homes, which is essentially based on fair market value or the resale price).

Currently, there is one property that contains units that are condominiums, built as condominiums, in Scarsdale, One Christie Place. Adoption of the Homestead Tax Option requires the inclusion of the residential condominium units at Christie Place in the homestead class of property thereby requiring a change in the method of valuation of those units from the income value method to a fair market value method. Based on preliminary tax reassessment data provided by Mr. Wolham to the Town Board, this change would result in a 116% increase (versus a 35.48% increase if the Tax Option is not adopted) in share of tax levy to the condominium owners as a class. With the adoption of the Tax Option, single-family homeowners as a class would see a .49% decrease in share of tax levy (versus a .23% decrease if the Tax Option is not adopted). The League believes the potential harm this change would create for the One Christie Place residential condominium owners outweighs the potential benefit its implementation may provide at this time.

Recommendation
The League does not support the adoption of the Homestead Tax Option by the Town Board of Trustees.

The LWVS reiterates its long-standing position of advocating for an increased supply of housing that provides residential alternatives for long-term Scarsdalians.

The League appreciates the opportunity to comment on this issue.

We thank Ms. Albanese for her participation in our information meeting and members of the Village Administration, including Village Manager Al Gatta, Village Clerk Donna Conkling and Ms. Albanese, for the help they have provided the Committee in its preparation and study of the Homestead Tax Option.

Respectfully submitted,

Susie Rush Committee on Homestead Tax Option
President Linda Doucette-Ashman, Chair
Tracy Jaffe
Anne Lyons
Debbie Miller
Kitt Rosenthal
Susie Rush

Comments   

0 #9 Bob Harrison 2014-03-13 01:56
Hello," Common sense prevails " why not tell us who you are or do you have hide your name . Do you live in Christie Place ?
You talk about grace and humility yet you use pejorative terms to describe Bob Berg and Bob Harrison . You don't have the guts to tell 10583 who you are !!!
We deal in facts. The Village is spending about $ 1 Million to do the first community wide reval since 1969 to value all residential
properties at fair market value to the extent of the laws available. There is no state law that treats coops at fair market value. They are assessed as rental properties.
As publicly said by Village Manager Al Gatta , there was NO DEAL that guaranteed low taxes for Christie Place buyers. Most Christie owners will enjoy 4 to 6 years of low taxes until 2015
with tax savings of $ 80,000 to $ 120,000. Sounds like they have a very good deal so far. If you followed my written and public comments, you would see that I recommended that
reductions be made to Christie condo's fair market values for interest paid on their garage note loan and the requirement that one apartment resident be over 55 years old.. To have Christie Condos stay at the same assessered values for the next 5 + years is unfair to the total Scarsdale community. The trustees did not consider the fact that any future luxury condos built in Scarsdale including the 11 to 15 apartments to be built at 2-4 Weaver Street will get substanial tax reductions without any age restrictions .
Finally what should the Village Board say to the 726 Scarsdale homeowners who will have their assessments go up over $ 5,000 each vs the 42 condo owners. Some Scarsdale home owners will have their assessments go up
over $ 50,000. Perhaps they will show up at a future Village
Board meeting asking for equity !!!
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-1 #8 and Community prevails 2014-03-07 15:16
Bravo to the Village Board of Trustees for showing true leadership on behalf of the Scarsdale community. Given the personal attacks that they've been subjected to by individuals who don't appear to understand the value of community, it was an act of moral courage. Hope the School Trustees are watching and can show similar strength of character.
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-5 #7 Common sense prevails 2014-03-05 22:53
The homestead tax was probably unanimously defeated because the trustees saw it for what it was: a cheap ploy from the regular malcontents to get somebody else to help them foot their bills.

Thank goodness the loony birds like Harrison, berg, et al didn't prevail. They need multiple lessons in grace and humility.
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+7 #6 Overpaying resident 2014-03-05 14:28
Grrr so frustrating. How is it OK that "fair" and "market value" doesn't apply to everyone equally in Scarsdale? This was the point of the whole revaluation, wasn't it? To eliminate inequity?

Now with that said - "Scarsdale Resident" -- how is remotely relevant that Picard's business is successful or that he is a lawyer? Does that mean you would have been fine with the option if the residents were retired or otherwise unemployed? You probably think you provided a compelling argument, but in reality you have weakened your own stance by injecting useless info.

Each of our property taxes isn't meant to be set according to the ability or willingness of the RESIDENT to pay; it's meant to be set according to each owner's proportionate share of the fair market value.

But I guess not if you live in a multifamily dwelling.
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+1 #5 Greenacres Mom 2014-03-05 13:52
As a homeowner, I think this was the right decision. Scarsdale is a community and fairness within a community does not always mean splitting the bill down to the penny. Different elements of the community contribute to the greater good in different ways - not all pecuniary. However, it does make me wonder how many of these condo owners who will benefit significantly, while the average tax bill for the rest of us remains $150 higher, voted against the first school budget last year in order to save the $50 increase in taxes that the first budget would have added to the "average" tax bill. Let these condo owners remember that the village is looking out for their interests and that they owe it to the village children to not split hairs over the upcoming school budget!
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+7 #4 No way to run a railroad 2014-03-05 13:16
Well, at least we now know that are distinguished Village Board protects its friends at our expense. It really galls me that our Board makes sure that Irving Picard -- who is richer than G*d -- has everyone else in town paying 2/3 of his property taxes.
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+9 #3 Bob Selvaggio 2014-03-05 10:48
A victory for cronyism -- it became shockingly clear listening to the Trustee who phoned in his comments that certain promises and representations about property taxes had indeed been made by a former Village official and that Christie Place would not have been built but for those promises and representations.

I did not hear one good rationale for taxing most homeowners on a market value basis and a favored few on a much more favorable "rental income" basis -- only the old saw "that's how it has always been". Public pressure forced the VB to approve revaluation after years of concerted foot-dragging, and the same will eventually force them to undo this unseemly bargain. For now, let's do be happy for our Christie Place neighbors who will enjoy the fruits of our labors until the next reval.
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+7 #2 Scarsdale Resident 2014-03-05 09:30
Fellow Residents, I just need a little help to fully understand this – It was reported earlier on Scarsdale10583. com that Irving Picard, the highly publicized lawyer working to find Madoff's lost assets as well as to claw-back money from the innocent victims resides is the condo building in question? He spoke out against the Homestead Tax at a village meeting that was also reported earlier on Scarsdale10583. com. If I remember correctly he, along with the other Condo owners are paying approximately $9K per year in property tax to the village? Is this really appropriate? His law firm has received more than $384 MILLION and HE is fighting to prevent his $9K tax bill from increasing? This just does not seem right. Is this another situation of lawyer greed? It seems disgusting.

http://money.cnn.com/2013/05/06/news/companies/madoff-picard-lawyers/
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-6 #1 Scarsdalien 2014-03-05 09:05
Good call, Trustees. Good governance is always the best path. Using the law to manipulate or substitute for honest community input will break down "fair" democratic process every time.
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