COUNCIL MEETING ON TAX SHIFT OPTIONS

Lets just say it was warm in City Hall this evening, and not because of the lack of air conditioning.

The Mayor and most of the Council attended the scheduled meeting with the representative from GAR Associates and pressed Dave (pictured right) for more answers. Members of the Council, including myself, have been grumbling about the handling of the Reval and the tax shift from commercial to residential.

Everyone having a turn to vent, we finally got some feedback and a window of opportunity to make changes in the process.

We cannot make any percentage changes in assessments across the city in a blanket action as I suggested, but we can set the tax burden shift to a less painful, incremental transition. Those numbers were sent back as a homework assignment for next months meeting.

Robert Senor and I stepped up with a 20% shift model, that readers wont know what I’m talking about, but we have a starting point to a four or five year partial modification to the current tax burden we deal with today.

It’s true, the extreme disparity in the tax burden for commercial taxes is slowly killing commerce here in Kingston, but it took us over 20 years to get here, the Council is not about to remedy the situation with one big bitter pill. Those of us who are on a financial margin of survival wouldn’t make it.

There is another positive, we learned that the exemptions with caps of $30K and $60K have a history of climbing to double and triple those current levels, where the 100% base actually helps the benefits, rather than hindering.

In the end, the process will take years to smooth out and commercial property will still pay a higher rate than residential, but to a smaller extent. It is our acknowledgment that commercial properties use more municipal service than residential and have the additional burden noted as a “cost of doing business”.

In closing, I took a moment to apologize to Dave for being “heated” last time we had a Reval meeting. I did get in his face when the tax shift was revealed to us in May, and I should have kept my cool.

PROPERTY REVAL STILL A MESS

I have come to the conclusion that GAR Associates assumed we, Kingston property owners, were actually in Westchester County.

The long drive from Rochester must have given them the illusion that Manhattan was just a few miles further down the thruway.

Every property owner that I have spoken to has the same impression that their property was assessed at 20 – 30% higher than any imagined selling price for this area. Thus…we must be in Westchester County.

Below is the no-brainer re-assessment flow chart. I suspect this was not the case in Kingston.

I will ask that the council consider a mandate that the assessor’s office decrease all of the property assessments by 30%. Not including the successful grievances. They would be included in the original category and start from there.

Once the fantasy numbers are eliminated and we get back to reality, we can discuss the incremental tax burden shift that I called for back in May. The lump transfer will not happen, if I can help it.

For years, the council set out to explain the “1/3 up, 1/3 down and 1/3 stay the same” concept, only to have the tax burden shift thrust into the equation. Every residential property ended up higher than we promised.

In time, the Common Council will sort this mess out, but until then, have patience with the process. Nothing sticks until the Council approves the changes and the Mayor signs it.

TAX BURDEN SHIFT: NOT SO FAST

The Sunday Freeman had an interesting Editorial regarding the City of Kingston’s Reval and the tax burden shift. The shift in question is from Commercial properties that bare a higher rate of taxation to the residential properties, which have been artificially low for decades.

We have a dual tax system that started out with a modest increase for non-homestead. Had the experiment run a few years and then stopped, we would have a lesser, but significant difference between the two that would still be tolerable today. So what happened?

The additional 4% difference in the tax increases for non-homestead was left to compound on top of already higher taxes. Twenty odd years later, you’ve got a huge disparity that needs a major correction.

What to do about it? With one third of the properties in Kingston paying twice the taxes per square foot as the other two, or 50% of the tax burden…you’ve got a recipe for economic disaster. Our commercial base is heading out of town. So let’s fix it.

Here we are in the middle of the big Reval that so many of our residents believe is a money making scheme for the city. Not true: all things being equal, we have the same $33 million budget the day after it’s voted on. The problem is, the shift in tax burden from Commercial to homestead was done as part of the equation when GAR Associates sent out the results. That’s where the Council comes in.

As the Freeman editorial staff indicated, the shift in the burden should be done gradually, like over three years and with the result of Commercial properties taxed at 125% of homestead. This would be 75% of the disparity modification favoring commercial, but in a timeframe easier on the taxpayers on fixed incomes and increased fuel prices. (some of us are lookin for work)

This is an issue that should have been handled during the Gallo Administration when the economy was in better shape. Since we cant alter the past, we attempt to change course. All a few of us Aldermen wanted was prior knowledge of the burden shift before the letters hit the street. Perhaps we weren’t supposed to know.