The city of Schenectady, and many of the property owners who pay taxes to the city, would be taking a big chance by pushing for another citywide revaluation of properties.
At some point, they’re going to have to decide whether the risks are worth the rewards.
City leaders plan to meet on Aug. 4 to discuss the issue, which has reared its head in the wake of complaints about assessments being too high compared to current market value of the city's 26,000 or so properties.
But if the city goes forward with a revaluation, its first in five years, the result could cause a major shift in the tax burden while taking money away from other vital needs to pay for the project.
In a reval, a lot of things can happen, some good, some bad. In the last reval, about half of residential property owners’ assessments went up and half went down. About 57 percent of businesses got a reduction. The tax burden also could shift between business and residential property owners in a revaluation.
With all properties assessed under the same criteria at the same time, there should be no disparities. And that should make people happy — unless, of course, they're in the group whose taxes go up.
A good example of a negative reval impact, on an isolated scale, happened just last week, when the Subway downtown grieved its assessment and had it cut almost in half, resulting in a reduction in its tax bill of about $5,600. The rest of Schenectady's taxpayers are making up that $5,600.
Regardless of how the tax burden is distributed, the city has to collect the same amount of taxes from the same pool of property owners —unless the overall tax base goes up with more economic development.
Revals are also expensive. The last revaluation, completed in 2009, cost taxpayers about $450,000, even with a lot of the work done in-house. A private reval would have cost $1.4 million at the time; it will likely cost more now. To pay for the reval, the city might have to cut city services, raise taxes or both. And then, taxpayers will still have to wait three years for the changes to take effect.
One alternative to a full reval would be to wait until property values rise to meet the current assessments. That could take a while. Another would be to invite all city residents to grieve their properties over a limited time and evaluate whomever complains one-by-one. That could be arduous and chaotic, but it might be cheaper than a full reval in the long run.
The city also can just accept the current situation for now, adjust the equalization rate upward to account for the difference between taxing districts, and continue to take grievances as they come.
If residents want to help the City Council along with a decision, they might want to show up on Aug. 4.