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Release Date: March 30, 2016

This is a response the town just received from the Office of the Counsel, New York State Department of Taxation and Finance re: proposal to allow for a phase in of tax assessments over a five year period.  


From: tax.sm.ORPTS.Legal [mailto:orpts.legal@tax.ny.gov] 
Sent: Wednesday, March 30, 2016 4:27 PM
To: Timothy Lewis
Cc: Edye McCarthy; Town Board
Subject: RE: Section 1904 of the New York State Real Property Tax Law


Mr. Lewis  -- I appreciate the challenges the Town is facing as it explores the transition assessment option provided by RPTL section 1904.  However, there is little I can offer you by way of specific advice.  Transition assessments are not only a local option, but are also entirely administered at the local level.  If an assessing unit chooses to avail itself of the provisions of this complex statute, it is also implicitly choosing to accept responsibility for interpreting the law it is choosing to administer.  There is nothing in the statute that empowers us to assume that responsibility.  To the extent our agency has a formal role under this statute, it is limited to prescribing the form of the assessment roll so that it accommodates transition assessments (which we have done; see 20 NYCRR 8190-1.2(b)(12)(ii) and 8190-1.5(d)), and taking transition assessments into account when determining State equalization rates. 


That said, I would be normally happy to share with you what we have learned from working with other assessing units that have dealt with similar issues.   Unfortunately, I cannot do so here because to the best of our knowledge, no assessing unit in the State has ever adopted transition assessments upon completing a revaluation.  While I cannot say definitively why that is so, I presume that to the extent they were not deterred by the complexity of the statute, their decision was largely the result of two considerations:


1.      Section 1904 is largely ineffective, because it phases in assessment changes, not tax impact changes.  As a result, the lion’s share of the tax shifts occur in the first year.  It might not be obvious why this is so, but it is basically a result of the fact that all parcels are seeing large assessment increases implemented at the same pace.  A mathematical simulation should make this phenomenon more apparent. 


2.      The adoption of section 1904 will render the assessing unit ineligible for reassessment aid, since it necessarily means that the municipality will not be assessing property at full value, which is a prerequisite for receiving that aid.  Likewise, the State equalization rate will be well below 100 throughout the transition period, since it must be determined using the (fractional) transition assessments. 


In any event, to the best of our knowledge there are no court decisions construing section 1904.  That of course is consistent with our understanding that it has never been adopted. 


We have no further general observations to offer, and as I indicated earlier, we are not in a position to formally advise you on the specific implementation questions you raised. 


One final, very minor comment:  I noticed that your letter was addressed to “Office of Real Property Services, State Board of Equalization and Assessment, 16 Sheridan Ave, Albany, New York 12210”.  Please be advised that those agency names, and that mailing address, are obsolete.  Any future postal mail of a legal nature should be sent to the State Department of Taxation and Finance, Office of Counsel, State Office Campus, Albany, NY 12227.  Non-legal postal mail should be addressed to the Department’s Office of Real Property Tax Services (not the Office of Counsel) at either our White Plains or Albany address.  Thank you.


-- Joseph K. Gerberg, Associate Attorney


From: Timothy Lewis [mailto:TLewis@greenburghny.com
Sent: Monday, March 28, 2016 10:59 AM
To: tax.sm.ORPTS.Legal <orpts.legal@tax.ny.gov>
Cc: emccarthy@greenburghny.com; Town Board <TownBoard@greenburghny.com>
Subject: Section 1904 of the New York State Real Property Tax Law


The Town of Greenburgh is in the process of conducting a Town-wide Reassessment.  Some Town property owners have expressed concern about increases in their assessments.  At the last Town Board meeting, a suggestion was made that the Town Board consider Section 1904 of the New York State Real Property Tax Law which allows a municipality to phase in new 2016 assessments over a five year period. If the Town is to adopt Section 1904, it must do so by adopting a local law no later than May 2, 2016, after holding a public hearing. Therefore, the Town Board, on Tuesday, March 29th, will introduce a local law and schedule a public hearing on April 13th, the Town Board’s next regularly scheduled meeting. 


Could you please review the attached letter and respond to the questions raised as expeditiously as possible?


Tim Lewis

Town Attorney

Town of Greenburgh


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