Photo: Will Waldron, Albany Times Union
GUILDERLAND — The tax bill was about a week late. And when she opened it, she couldn’t believe her eyes.
In the 30 years she’s lived in the town of Guilderland, Diane Reilly had never seen such a huge increase in her school taxes. The retired schoolteacher had seen $50 increases, $100 increases, but never a $1,200 increase. She did the math, and realized her taxes had climbed 14 percent from the previous year to $9,100.
Another resident who lives nearby, Vince Crisafulli, a small business owner and father of two, saw his taxes climb 14 percent too. And Bill Young, an attorney who lives nearby, saw his climb 12 percent. All three live on the outskirts of town and pay taxes to the Voorheesville school district.
“It’s a crime,” said Reilly, 68. “It’s a crime to throw it at us like this. You vote on your school budget in May. You think you know what’s coming. But we didn’t know this was coming.”
It was the school tax bill felt around town, and local officials say they’ve never seen anything like it. The culprit? An unusually large drop in the town’s equalization rate, which fell from 88 percent last year to 75 percent this year, forcing town of Guilderland residents to pick up a larger share of the tax levy in their respective school districts.
Residents didn’t know it was coming because while they voted on their school tax levy in May, the town’s equalization rate isn’t set until late summer and it’s that rate that determines how the levy is distributed.
For residents in the Guilderland school district — that is, most residents in town — the increase wasn’t too bad. The tax rate climbed 1.6 percent, and the district was able to use rainy day funds to offset some of the impact. But for those residents who pay taxes to other school districts, the impact was in the double-digits — tax rates climbed 11.8 percent in the Voorheesville school district, 12.3 percent in South Colonie, 16.8 percent in Schalmont, and 18.8 percent in Mohonasen.
Those districts could have used rainy day funds to bring the overall levy down, but since town of Guilderland residents make up a small share of their tax base, any impact to those residents would have been negligible, said Voorheesville Superintendent Brian Hunt.
“I mean, obviously we feel terrible about it,” he said. “It’s very unfortunate. It’s the way the system is set up, and it’s not fair.”
After more than 100 residents showed up to a Guilderland town board meeting last week to protest the taxes, town and state leaders are scrambling to come up with a remedy that will help residents in the short term and, they hope, change the system in the long run. But that may not be so easy.
The problem lies in how often properties are assessed, and how the state determines the market value of commercial properties, officials say.
Because municipalities are allowed to set their own levels of assessment and because annual assessments can be costly, many towns and cities go years without updating their assessment rolls. Equalization corrects for that, and allows school districts to determine the market value of communities in their jurisdiction and tax them accordingly.
But Guilderland says the state agency tasked with setting its equalization rate is short staffed, and as a result conducted a cursory evaluation that failed to take into account the wide range of commercial properties in town. The town appealed, but was rejected.
“They looked at 10 commercial properties in town,” said Town Supervisor Peter Barber. “We have more than 400. In order to feel confident in the system, you really have to look at more like 60 or 70 properties, and make sure they’re a representative sample.”
In its appraisal, the state Office of Real Property Tax Services looked at Stuyvesant Plaza and several apartment complexes around town. It requested occupancy and vacancy data from Crossgates Mall, the largest commercial property in town, for its appraisal but the mall wouldn’t provide the information. Town officials believe that omission may have skewed the numbers.
At its appeal hearing Aug. 23, town officials also argued that looking at properties strictly within a municipality’s boundaries ignores the impact that regional commerce contributes to a town’s value.
Members of the state board of Real Property Tax Services conceded on some of these points, but ultimately said there was nothing they could do.
“I think everyone acknowledges it’s a flawed process, but it’s the process we have,” said Matthew Rand, one of three members on the board.
Some school leaders say a countywide revaluation program would help eliminate the large tax increases that are seen when individual towns set their own levels of assessment. But state Assemblywoman Pat Fahy, a Democrat who represents Guilderland, says the idea was floated years ago and proved so unpopular that it would have little chance of gaining traction in the Legislature.
There is one option available to Guilderland to help offset the burden that fell harder on some taxpayers this year: It could request a special equalization rate for the segment of town hardest hit by the new tax bill.
That appears to be the Weatherfield development, a residential area off of Route 155 near the Albany Country Club where Reilly and her neighbors live and pay school taxes to the Voorheesville district.
A special equalization rate wouldn’t change anything about their current tax bill — under state law, once the bill has been issued residents have 30 days to pay it or else face a 2 percent late fee. But, officials say, it could help lower taxes next fall to essentially compensate for the spike this year.
And at its upcoming meeting Tuesday, the town board is expected to discuss conducting a town-wide revaluation in 2019, which would bring the equalization rate back up to 100 percent and help stabilize taxes in the long term.
Meanwhile, Fahy says she’s working with her Republican Senate colleague, George Amedore, on some legislative fixes that would prevent another unexpected tax increase like this one.
One such fix would require the appeals process to start earlier. Guilderland’s appeal was rejected Aug. 23, and tax bills were issued about two weeks later. Fahy wants residents to have more advance warning of a large bill and — if the increase is especially large — more time to pay.
“Can you imagine? Getting a bill like that out of the blue and then having 30 days before it’s due?” she said. “I really have been stunned by this. So that’s why we’re working frantically to fix the situation.”