One more slight digression before moving on to the conclusion of the assessment series...
Among the many theories about why tax bills are are so high in places like Hudson is the widespread notion that nonprofit institutions are to blame. The theory goes that the local tax burden would be lighter if there were fewer buildings owned by local nonprofits that are not obligated to pay property taxes.
But is this really an issue, or is the theory misplaced? As in the rest of our analysis, it is helpful to define terms—rather than speaking inexactly about “nonprofits”— and actually look at some real-world data.
Key questions to consider are: Who are these nonprofits; what portion of Hudson property is untaxed; and is it reasonable to think that parcels currently untaxed may someday become taxable?
It’s important to realize that even untaxed properties are assessed. The value of these properties does not result in a tax bill to their owner, but it does count toward the Citys total market value. This plays into the State’s adjustment rates when computing adjustment rates for school taxes across districts which span more than one town.
Over a decade ago, in 1999, tax assessment data indicates that some 45% of the value of local property was off the tax rolls. Today, according to the 2010 tentative roll, the number has dropped to more like 35%, a small but definite improvement. That drop is attributable in some small part the City auctioning off several dozen foreclosed properties over the past ten years, putting them back on the rolls. The sale of these properties was a positive step to bolster the City coffers and tax base, though many feel that those auctions have not always been handled as wisely and objectively as one would hope.
But another reason for that drop is that while taxable assessments have risen 174% since 1999, assessments for the remaining 350 or so untaxed parcels have not kept pace, rising only 90% over a decade—some 84% less than the rest. This gap would appear to be suppressing the City’s the total assessed value, which helps determine equalization rates for paying school taxes. But that’s the fault of assessors, not of the nonprofits themselves.
Now, returning to the remainder of that list of questions... Who are these nonprofits? And: Is it realistic to imagine that any of them might change over to taxable status?
One problem arises about what people really mean when they refer to “nonprofits.” For one thing, there is a common misunderstanding about whether a nonprofit organization can make money. So long as any profits are related to the pursuit of entity’s charitable purposes and are used to further that mission, and its officers and employees are not excessively compensated beyond the value of their services, nonprofits can do many of the same things as ordinary corporations (e.g. market merchandise, produce performances, sell food, and so on.)
There also are many different kinds of untaxed properties—not all of them technically nonprofit organizations. If you want to get up to speed on the New York State tax laws regarding nonprofit organizations, here is a good place to start.
Buildings and land owned by the City, County, State, or School District are not taxed (as it would be kind of silly for our government and public institutions to tax themselves). Similarly, churches, libraries, and other civic institutions are generally not taxed, including most hospitals.
There are also a handful of local property owners with Payment In Lieu of Tax (PILOT) plans. But there is little that can be done to alter those until they expire... even if the City deemed some of the PILOTs that were handed out to have been a mistake, unless they default or somehow violate their contractual agreements with Hudson.
And then there are cultural, service and social organizations (arts groups, VFWs, ethnic clubs, conservation organizations, and the like). These are what most people have in mind when they refer to as nonprofits. A search of public databases such as Guidestar shows that there are some 162 nonprofit organizations recognized by the IRS which have a Hudson address.
However, even that figure is misleadingly high when one considers that many of those groups (such as the American Bowling Congress) are not actually located in Hudson; they just get their mail delivered to the 12534 ZIP code, usually because their accountant is there. Of the remainder, few of these nonprofits actually own buildings or land.
Indeed, the vast bulk of untaxed property in Hudson is the kind that will probably never be moved back onto the tax rolls, unless our entire national tax code were to change drastically. Things like water and sewer facilities, the two fire stations, the police station, the few remaining churches, the hospital, County buildings, the Elks Lodge and D.A.R. and American Legion, the schools, the Post Office, etc. are just not going to switch over to taxable status. Nor should they.
(Moreover, even in the unthinkable scenario where Hudson stopped being the County seat, and all of the above institutions moved elsewhere, it is pretty unlikely that this glut of buildings would all get back on the tax rolls in our lifetimes. And considering how much local employment depends on the public and nonprofit sectors, the net effect would almost certainly be negative for many years.)
Meanwhile, the actual number of buildings owned by cultural organizations (the Opera House, TSL, Stageworks, Operation Unite, et al.) is comparatively quite small... And even if all of these switched over to for-profit status, the difference in any single property owner’s bill would be negligible. They just don’t represent a large enough chunk of that 35% off the rolls. All told, the cultural groups probably amount to about 1% of the City’s total assessed value.
Where the City could continue to make some progress in bolstering the tax base is in properties currently held by its development agencies. The Hudson Community Development and Planning Agency (HCDPA) currently owns about two dozen parcels, few of them assessed over $25,000. These numbers seem artificially low, probably due to assessors paying less attention to untaxed parcels. But even if all of these went back into the taxable column, again it would not be likely to be noticed by the other taxpayers.
As such, this analysis concludes that the whole "nonprofits are to blame" line of thought is neither valid nor useful. Arguably, there may be a handful of organizations or institutions whose properties (e.g. rentals not related to their central mission) should not qualify for tax exemptions. But these are few and far between. STAR tax exemptions—which are not included in the figures above, but which may result in 5-10% of a municipality’s taxable value going untaxed—account for a far greater “hit” to local revenues.
Rather, the focus of those seeking tax reform and fairness should remain on (A) securing reasonable, balanced, justifiable assessments for all property owners, both small and large; and (B) encouraging City leadres to be disciplined in its annual budgeting process and spending habits. As mentioned above, the one area concerning nonprofits where some improvement ought to be made is keeping the assessments of untaxed parcels changing at a rate close to that of the taxable ones, so that the City’s total assessed value and equalization rates are not skewed. But again, that’s the job of the assessor, not the fault of nonprofits.
According to the New York State Office of Real Property Services, one of the four bases for grieving your property tax valuation is unlawful assessment.
This category includes, among other things, situations where “property has been assessed and entered on the assessment roll by a person or entity without authority
to make the entry.” (Hmmm...)
The other three categories are excessive, unequal and misclassified assessments. More reading on the topic can be had in this State-created PDF.
On a related topic, here is some information from three New York State municipalities describing the function of their Boards of Assessment Review. These descriptions make one wonder about the propriety of BAR members issuing press releases, advice, and admonitions to taxpayers, let alone engaging in ex parte debates of grievance issues in person or online, during the run-up to their annual hearings...
NORTH TONAWANDA: The Board of Assessment Review constitutes what is known as a quasi-judicial body and the members of the board are charged with. the judicial responsibility to get all the facts, and apply appropriate laws and reasoning to the facts in a fair and judicious manner. Accordingly, each member of the Board of Assessment Review should:
Possess judicial temperament, patience and tact.
Provide a fair hearing.
Safeguard the constitutional guarantees of due process of law.
Withdraw from a case where he/she deems themselves disqualified by reason of personal or business relationships or interest.
PINE PLAINS: The Board of Assessment Review is a quasi-judicial body charged with hearing complaints by Pine Plains propety owners about their assessments, and rendering impartial and objective determinations.
JAMESTOWN: The Board of Assessment Review is a quasi-judicial body in accordance with Section 525 of the Real Property Tax Law that meets to review all petitions received from property owners who consider their property assessment to be too high. At the conclusion of their review, the Board votes to determine if the assessment should remain the same or be lowered. If the property owner is dissatisfied with the decision, they have the opportunity to seek assistance through a judicial review.
A Hudson taxpayer sent along a tip that someone ought to check into the qualifications for officeholders in the City of Hudson.
Section C2-4 of Hudson’s Charter says that to “be eligible to any City office under this Charter,” a person must be an elector of the City. Or, if the person is not a Hudson voter but wishes to serve in an appointed position, then s/he must meet two requirements:
The appointee must live “within 15 road miles” of Hudson; and
“Be a taxpayer on the real property assessment rolls of the City of Hudson.”
This doesn’t appear to be an either/or stipulation; the operative word here is “and.” So the appointee must meet both requirements to hold a City office. (The only listed exception is for the Superintendent of Public Works.)
The next question would be: What positions are considered officers? That information can be found in Section C2-1 of the Charter, which lists the following as City officers:
Assistant Chiefs of the Fire Department
Chief of the Fire Department
Commissioner of Aging
Commissioner of Fire
Commissioner of Grants
Commissioner of Police
Commissioner of Public Works
Commissioner of Purchases
Commissioner of Youth
Director of Youth
Members of the Board of Plumbers
Planning Commission of seven members
President of the Common Council
Superintendent of Cemeteries
Superintendent of Public Works
Obviously, the tipster’s interest in this topic was sparked by the current controversy over the first officer on the list above—Hudson’s appointed Assessor. The City Assessor is again referred to as an “officer” in another part of the Charter, Section C4-4, so there seems little doubt that these requirements apply to that office.
Now, according to State political contribution and County voter records, the current Hudson assessor Garth Slocum lives in Chatham, well within the 15 “road miles” of Hudson. So that's half the requirements fulfilled. So he’s halfway there.
But Slocum’s name does not seem to show up in the Hudson 2010 tentative roll as a local taxpayer. The question, then, is: Does he own some property through a corporate name? And if so, would that qualify?
On the one hand, it seems hard to believe that any Mayor would have been so reckless as to appoint someone who didn’t meet both of those two requirements. For those upset with Slocum about this year’s assessments, this information seems almost too good to be true; so perhaps there is another explanation. Then again, far stranger things have happened in Hudson—such as a Hudson Supervisor also holding the position of Youth Commissioner despite the Charter’s provision against dual office-holding.
If it turns out that an officer of the City such as the Assessor does not meet the City’s property-owning requirement, what happens next? By what process would such an officer be removed? And could any work performed—such as the 2009 and 2010 revaluations of property tax assessments—be tossed out on the basis that they were made by someone not entitled to hold that position?
According to a longtime Hudson political observer, these provisions for non-Hudson voters to be appointed to City offices came about during the (sadly brief) Mayoral service of Bill Allen. They were apparently tailored so that Bill Deily could lead the Hudson Police Department. That recollection would appear to check out, since the Charter indicates this section was amended in 1992—when Allen was Mayor. Before that, evidently you had to be a Hudson voter to serve as an officer.
And then there is the question of all those other officers. Does anyone else—say, one of the City Attorneys who lives in Spencertown—also have a problem regarding these qualifications?
Below are the texts of the Charter referred to above; if you want to take a look at (and search) it yourself, the link is here. If you have any specific information about City officers who may not meet these requirements, or how the Charter operates, feel free to be in touch.
§ C2-4. Eligibility to hold office.
A. No person shall be eligible to any City office under this Charter, except the Superintendent of Public Works, who, at the time of election or appointment, shall not be an elector of the City; and no person shall continue to hold office hereunder after ceasing to be such elector. No person shall be eligible to any ward office under this Charter who, at the time of election or appointment, shall not be an elector of the ward in which elected or appointed; and no person shall continue to hold a ward office hereunder after ceasing to be an elector of such ward. B. Notwithstanding § C2-4A, an appointed person otherwise eligible to hold office under this Charter in accordance with the Public Officers Law of the State of New York need not be an elector of the City so long as such person shall reside in Columbia County within 15 road miles of a boundary of the City of Hudson and be a taxpayer on the real property assessment rolls of the City of Hudsony.§ C2-1 Officers and salaries.The officers of the City shall be a Mayor, a President of the Common Council, a City Judge, a City Treasurer, one Assessor, a Commissioner of Public Works, a Commissioner of Police, a Commissioner of Fire, a Commissioner of Youth, a Commissioner of Purchases, a Commissioner of Grants, a Commissioner of Aging, a Planning Commission of seven members, such members of the Board of Plumbers as are now or hereafter shall be provided by law, local law, or ordinance, a City Clerk, a Superintendent of Public Works, a Superintendent of Cemeteries, such number of policemen as the Commissioner of Police shall appoint, a Chief of the Fire Department, two Assistant Chiefs of the Fire Department, a Director of Youth, a Bingo Inspector, special policemen and, in the discretion of the Mayor, a City Marshal and such legal counsel as the Mayor may deem necessary or expedient for the preservation of the rights or the protection of the interests of the City. § C4-4 Appointive officers and terms. A. The Mayor shall appoint the following officers for the terms of office indicated: (1) Assessor, for six years. [...]
A regular reader of this site suggested that before proceeding to this series’ conclusion, it might be useful to analyze the Hudson assessment numbers ward-by-ward. (Good suggestion, reader.)
Below are two tables which compare the 1999 Hudson final assessment roll with the current, tentative roll for 2010, ward-by-ward. These address only the City’s taxable parcels (i.e., not the publicly-owned and nonprofit parcels which don’t pay taxes). Some interpretation of these tables follows after the raw numbers:
NOTE:These tables can be enlarged by clicking on the image above. Also, if you are not sure which ward your property is in, there are maps at this link.
So what do these numbers tell us?
The obvious conclusion to be drawn from the +/- columns is that while everybody’s assessments have gone up over the past decade, some wards of the City have been increased substantially more than others.
Assessments in the 1st Ward (that’s the one closest to the train station) have been jacked way up compared to the 5th Ward (the one closest to the shopping strips in Greenport). This is true whether one looks at the percentages or the raw numbers. If you owned a brick house on Union or Allen Street in 1999, by 2010 your assessment had probably gone up about 360%, increasing by some $165,000. Meanwhile, your friend with a ranch house on one of the boulevards of the 5th had only gone up 96%, with a raise of about $68,000.
The 2nd and 4th Wards have similarly been spared, whereas the 3rd has risen a great deal like the 1st.
It has apparently been said by a few defenders of the Hudson “reval” that the 5th Ward has been “carrying the City” for a long time, and it was time for the other Wards to pay their fair share. But the analysis above reveals that back in 1999, the 5th Ward was only marginally higher-assessed, on a per parcel basis, than the rest of the City. If the various assessors over the past decade were aiming for parity, the numbers show that they’ve drastically overcompensated.
Without question, some houses are more valuable than others, and
gaining value faster than others. But are some houses gaining value 10 or 12 times faster than others? Hardly.
Average differences among neighborhoods of $10-$20K ten years ago have now been magnified into differences of $100,000 or more. And this in many ways amounts to a form of social engineering. People are being punished for doing just what Hudson’s leaders ought to be supporting: saving and fixing up buildings which otherwise would have fallen off the tax rolls or become delinquent, or both. They are being forced to pay not just their fair share, but a portion of their neighbors’ share as well.
The last face-to-face chat I remember having with Vicki Simons, the former editor of The Independent, was at the annual Columbia County Fair. Simons was by then on the Fair’s board, and her sincere enthusiasm for (and dedication to) local agriculture positively radiated from her face. Simons died earlier this year; her husband Tony Jones, the former Inde publisher, has now announced the following award in her honor... So, who’s going to nominate Carole Clark first?
5/24/2010: FOR IMMEDIATE RELEASE
Tony Jones, 518-755-7865
Lael Locke, 518-392-5850
Award Honors Simons’ Commitment to Local Food
CHATHAM — A prestigious new award has been established in memory of Vicki Simons, long-time editor of The Independent newspaper, executive director of Columbia County Bounty, and sparkplug for many causes targeting community improvement.
The Victoria A. Simons Locavore Award—which consists of a plaque and a stipend of $1,000—recognizes outstanding vision and accomplishment in expanding the availability, quantity, quality or distribution of local foods reaching local mouths.
Organizations, farms, restaurants, co-ops and individuals are eligible for the award so long as they reside within 50 miles of the Village of Chatham and their efforts primarily benefit residents of this region.
Tax-deductible contributions are welcomed to the Victoria A. Simons Locavore Award Fund at Hudson River Bank & Trust Foundation, P.O. Box 1189, Hudson, NY 12534.
A golf tournament to benefit the fund is scheduled for August 9 at Columbia Golf & Country Club.
The new award will be presented annually during the Columbia County Fair over Labor Day Weekend. For 14 years Simons was a director of the Columbia County Agricultural Society, which puts on the Fair, where she championed organic and non-traditional forms of agriculture locally, facilitated the restoration of the original Fair House and expanded community use of the fairgrounds.
Nominations (and self-nominations) for the award are encouraged and may be sent to the Award Fund c/o HRBT Foundation at the address listed above. The deadline is July 31. Nomination letters should provide a one-page narrative describing the applicant’s activities and explaining how they support the mission of the Locavore Award Fund.
The word Locavore was coined in San Francisco at the 2005 World Environment Day to describe and promote the practice of eating a diet consisting of food harvested within a 100-mile area. The Locavore movement encourages people to grow their own food; buy from farmer’s markets, CSAs, and other local food programs; and to patronize restaurants, caterers and other food preparers that feature local ingredients.
Simons was a strong proponent of Locavore activities as part of her commitment to see greater use of locally produced food and to keep agriculture an integral part of the community experience.
As a writer and editor, she documented the shift to organic and niche farming activities locally, and as a motive force of Columbia County Bounty helped bring farmers together with chefs, restaurants and caterers to facilitate greater, more creative use of local food products. She also helped establish the Bounty model in Dutchess, Orange and Ulster counties as steps toward a Bounty program covering the entire Hudson Valley.
Simons died March 1 following a brief battle with cancer.
The Award Fund is made possible in part through a grant from the Green Pastures Fund of the Berkshire Taconic Community Foundation.
Parts I, II and III of this series assessed some of the overall changes in Citywide taxable property valuations in Hudson, and then presented examples of unusual increases and decreases for specific properties. Here in Part IV, we turn to what has happened to various neighborhoods and classes of owners.
The first two charts show the change in assessments of taxable
properties in terms of where the property
owner receives their tax bill, over two periods: during the past year (2009 to 2010) and the past decade (1999 to 2010):
The figures pretty much speak for themselves, and the conclusion is obvious: If you own a Hudson property and get your tax bill in Manhattan, Brooklyn, the Bronx or Queens, you most likely got your assessment raised much more than those who get their tax bill in Hudson or elsewhere.
The next charts list changes in the total taxable assessed value of various Hudson streets:
Again, the numbers pretty much speak for themselves. Over both the past year and the past decade, if you owned property on Warren or the “south side” of Hudson, your property assessment almost certainly increased faster than the rest of the City. If you own on the Boulevards and other parts north of Oakdale, your assessments also rose, but well below the City average.
Note that the charts above include one special example. The numbers for Columbia Street are broken out both as a whole and with two major property acquisitions excluded (Club Helsinki and the Marina Abramovicz museum in the former Community Tennis building). This example is offered to show how the numbers for a given street may vary or be influenced by even a handful of changes.
Some conclusions will follow in the final installment of this series, Part V, coming soon.
Part II of this series looked at some of the more eyebrow-raising examples of assessment increases doled out by Sole Assessor Garth Slocum to taxable properties in the City of Hudson in his 2010 tentative roll. Among these were a vacant lot raised over 1000%, private homes raised well over a million dollars, and a bed-and-breakfast quadrupling to $1.2 million in a single year.
This installment concerns examples of the precise opposite: Properties whose values were actually lowered by Slocum at a time when he raised assessments Citywide by 29%.
OF LARGE DECREASES
304 State: -68% Owned by former City Democratic Chair and Waterfront Advisory Steering Committee chair Linda Mussmann, this property decreased from $90,300 to $30,100 in one year. Other properties in the 200, 300 and 400 blocks of State Street went up by 8% collectively. According to Trulia.com,
“this 3 bedroom, 1 bathroom home has 2,504 square feet and was built in
1860.” Mussmann owns a total of four Hudson properties; taken together, their value was raised just 1%, against that City benchmark of 29%.
551 Warren: -36% This large and prime retail/office space is located in
arguably the best block of the Hudson business district, and is owned
by the 551 Warren St Corp. State corporate records show their CEO is
David Crawford, principal of Crawford & Associates,
which has done extensive engineering and consulting work for the City
of Hudson over the years. The other 47 properties in the 500 block of
Warren went up by 29% on the same tentative roll, making 551 Warren’s
assessment change significantly smaller than its neighbors.
Front Street (109.11-1-22): -32% This 2.7 acre vacant commercial parcel south of the
train station is owned by “R & S of Hudson, Inc.” and was reduced
from $68,900 to $46,800 on the tentative roll. Other Front Street
properties went up by 45% in the aggregate. R & S lists a
Claverack mailing address in local property records; a Poughquag address
in State corporate records; and appears to share a P.O. Box with the
Hudson Handling Corp. Some speculate that R & S stands for Richard
and Susan Koskey (the former of whose accounting firm has done lots of
work for County government and municipalities in the area).
42 Fairview: -27% The Chief of Staff for Assemblyman Marc Molinaro (and former Hudson Police Commissioner) Gary Graziano owns this small one family residence, the assessment of which dropped from $162,200 to $119,200.
15 Parkwood: -24% This home is owned by Carmine (“Cappy”) Pierro, the aide to Hudson Mayor Richard Scalera, a member of the City’s Planning Commission, former Alderman and former Mayoral candidate. Its tentative assessment dropped from $183,600 to $139,200 on this year’s roll. Trulia.com lists it as a “4 bedroom, 2 bathroom home has 1,792 square feet and was built in
1930.” Pierro also owns two other properties on Parkwood, another house which was raised just 6%, and a parcel of land which was raised 125%. Overall, the three properties dropped 4%.
86 Union Turnpike: -21% Phil Gellert, a landlord known well to many longtime Hudson residents as the operator of Northern Empire Realty, owns this two family residence. Overall, Gellert’s 17 remaining properties were raised by 19%, 10% less than the rest of the taxable parcels in the City.
In Part IV, we’ll start to look at the bigger picture—how different streets and neighborhoods within this compact (two square mile) municipality were revalued in significantly different ways.