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Department of Taxation and Finance

RPTAC 2002 Annual Report

STATE OF NEW YORK
EXECUTIVE DEPARTMENT
OFFICE OF REAL PROPERTY SERVICES

Memorandum

December 24, 2002

TO:               RPTAC

FROM:         RPTAC Equalization Project Team

SUBJECT:    2002 Annual Report

Our team is chartered for a one-year period with evaluation by RPTAC occurring in the last quarter of the calendar year.  We are submitting this report to identify the issues discussed, report the progress made and make recommendations for future topics.

During 2002, the team met four times: March 6, June 12, September 16 and December 4.  The meetings were held in the Manlius Town Hall, with all participants commuting.  The meeting agendas, minutes and annual reports are placed on the ORPS website at http://www.orps.state.ny.us/rpta/equalcom/index.htm.

Issues Identified for 2002 and Summary of Results : These issues were identified in our 2001 annual report.

Assure that the current rates/current roll standard is maintained and the lag continues to be eliminated.  Result: Final 2002 State equalization rates were established for all the cities and towns in 428 of the 433 school districts that apportion taxes on September 1.  Final 2002 State equalization rates were available by November 15 for use in county apportionment for 53 of the 55 counties that apportion taxes.

Evaluate the experiences of 2002 rates and LOA acceptance/determinations, react and determine adjustments that may need to be made.  Result: The Level of Assessment (LOA) was accepted as the 2002 State equalization rate in 66 percent of municipalities.  This is a significant increase from 2001 when the LOA was accepted as the 2001 State equalization rate for 47 percent of municipalities.  The team believes that with increased communication and collaboration between ORPS staff and local officials prior to the establishment of 2003 equalization rates that this percentage can be increased in 2003.

The use of the sales ratio studies and CAMA ratio studies were generally a success.  In most municipalities the results of the CAMA ratio studies were similar to the results of the residential sales ratio studies.     

Develop and define 2003 rate procedures.  Result: As a result of review of the 2002 equalization rate process the team recommended that ORPS continue to establish current equalization rates in time for school tax apportionment.  The team recommended several adjustments to the process for 2003 equalization rates.  These recommendations were incorporated into the procedures that were adopted by the State Board in November 2002.  The changes from the 2002 procedures include the following:

1)  The 2003 rate products for cities and towns will be based on a valuation date of January 1, 2003.  The 2003 State equalization rate will represent the ratio of assessed value on the 2003 assessment roll to the January 1, 2003 full value of these municipalities.

2)  The measured roll for a reassessment municipality will be the 2000, 2001, 2002 or 2003 reassessment; whichever is the most recent reassessment.

3)  The measured roll for a non-reassessment municipality will be the 2002 assessment roll.

4)  For measured rolls that are earlier than 2003, the aggregate full value for each major type will be adjusted to a January 1, 2003 aggregate full value.

5)  A major type A (residential) full value will continue to be developed with a sales ratio study where there is a sufficient number of sales and with a CAMA ratio study where there is sufficient inventory data.

6)  Where a sales ratio study or a CAMA ratio study is used for major type A, the full value will be as of January 1, 2003 and the measured roll will be the 2002 assessment roll.

7)  The 2003 procedures will allow for the use of sales of condominium properties in sales ratio studies in the twenty-four homestead municipalities where there are not restrictions on the assessments of condominium parcels.  In most municipalities there are restrictions on the assessment of condominium parcels and in most municipalities we will continue to exclude condominium sales from our sales ratio studies. 

8)  The ORPS estimate of market value of taxable State land (TSL) in municipalities where TSL is a small percentage of the total assessed value will not impact the equalization rate.  If the total assessed value of TSL in a municipality is less than 5 percent of the total assessed value of roll sections 1, 3 and 6 and the State Board has not and does not plan to file an Article 7 proceeding against the municipality the market value for TSL will be determined by dividing the assessed value of TSL by the market value ratio determined for major types A, B, C and D.

9)  As part of the review of a reassessment on the 2003 roll staff will conduct a sales ratio study. 

Evaluate the 2002 communication effort and make recommendations for the 2003 effort.  Result:  The team thinks that there needs to be more communication between ORPS staff and local officials prior to the establishment of tentative equalization rates.  This will result in fewer equalization rate complaints and more municipalities where the LOA is accepted as the 2003 State equalization rate.  ORPS staff is committed to sharing all full value measurement data with the local officials prior to the establishment of the tentative equalization rates. 

Identify ways/methods to assist assessing units in appropriately determining LOAs annually. Result:  ORPS staff is developing a training class to assist assessor determine their LOA.  The training class will be available in early 2003.

Conduct an after the fact review of the 2001 rate complaint process.  Result:  There were 46 complaints filed against the 2001 equalization rates and 18 of theses rates were changed as a result of the complaints.  The rules and procedures for 2003 State equalization rates will again let a municipality file a complaint against any data used in the computation of the tentative equalization rate.  The team believes that increased communication between ORPS staff and local officials prior to the establishment of the tentative rate will result in fewer complaints in 2003.

Determine how and when to communicate with the Valuation Issues team.  Result:  The team did not address this issue in 2002.

Review the need for AAR information in certain circumstances and define procedures in support of changes if appropriate.  Result:  The team decided that this information is still needed by ORPS for computing certain specials rates and exemptions and is helpful in analyzing market data.  It was decided that at this time ORPS still needs to collect the assessor's report. 

Examine ramifications of using different rates for exemption calculation on the tentative roll and for use in apportionment.  Result:  The team examined data that showed for 2001 assessment rolls that the equalization rate for exemptions was the same as the equalization rate for apportionment in 43 percent of municipalities. The data also showed that in most cases there was less than a 5 percent difference in the two equalization rates.  We also discussed how there have always been differences in the two rates for at least some municipalities.  The team decided that at this time the use of different rates for exemptions and apportionment is not a major problem.  However, there is recognition that this could become a larger problem, and discrepancies should be monitored for possible future improvements. 

Compare full value changes for municipalities that conducted reassessments to full value changes for municipalities that did not conduct reassessments.  Result:  The team examined percent change in full value data from January 1, 2001 to January 1, 2002.  The average percent change in full value for all municipalities was 4.2 percent.  The average change for municipalities that conducted 2002 reassessments was 3.9 percent and the average change for municipalities that did not conduct reassessments in 2002 was 4.3 percent. 

Legislative status. Result:  Each meeting included status review of legislative proposals and their connection and impact on the equalization program.  One important piece of legislation that was enacted in 2002 was the large parcel legislation.  This legislation created section 1316 of the Real Property Tax Law and provides for an alternative tax apportionment process for school districts with a large property.


2003 Issues:

At our December 4, 2002 meeting, the team agreed that our charter should continue in 2003.  Our focus will be on the following issues but additional issues may develop during the year.

1.  Monitor the 2003 communication process to ensure that assessors are aware of the ORPS estimate of full value and LOA prior to the establishment of the tentative rate.

2.  Develop proposed procedures for 2004 State equalization rates.

3.  Push for ORPS to expand CAMA modeling techniques to the commercial and/or vacant property classes.

4.  Evaluate the experiences of 2003 rates and make recommendations for future rate cycles.

5.  Review the 2002 rate complaint process and make recommendations for future rate years.

6.  Identify ways/methods to assist assessing units in appropriately determining their LOA.

7.  Ensure that 2003 reassessments are appropriately confirmed at 100 percent.

The assessor participants of the team distributed a report at our meeting on September 16, 2002.  The report expressed a number of concerns with the equalization process including problems with communication, timing and training.  The conclusion of the report was as follows:

“We believe many of these issues are resolved or improved with better communication and providing the municipality more time to review all information.  Currency has always been a goal.  Accuracy and acceptability can not be sacrificed for currency.

 Adequate staff must be devoted to the process.

We suggest that municipalities be provided complete equalization rate information at one time for review and comments.  This would be all areas that make up the rate process and it would be provided before a tentative rate has been determined.

We strongly urge that these issues be discussed and a course of action put in place for the 2003 equalization rate process.  Without such effort, the product will lose credibility, there will be more assessor dissention and that will result in increased pressure on the process and potentially more equalization rate complaints.” 

Attached is the complete report the assessor's presented at our meeting on September 16, 2002.

Team Membership:

The team consists of four county directors:  Tom Bloodgood, Paul Burckard, Bernard Miller and Bob Diener; five assessors: David Briggs, Val Martins, Walter Smead, Roger Tibbetts and Edye McCarthy; and three ORPS staff: Tim Maher, Jim O'Keeffe and Patricia Holland.  ORPS will continue the practice of bringing the appropriate additional staff depending upon the specific issue. 

During the year, Barbara Bounds and Rick Dean, both long time members left the team. Both Rick and Barbara made major contributions to the team and the improvements in the equalization program would not have been possible without their hard work and dedication. The team thanks Barbara and Rick for their contributions.

The team expects to meet four times in 2003.  Our next meeting is scheduled for April 2, 2003 in Manlius. 

Updated: