Changing tax base offers signs of better economy, shifting wealth - The Buffalo News
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Changing tax base offers signs of better economy, shifting wealth

The local tax base has rebounded a bit for next year and grown more than a half-billion dollars across Erie County.

That $509 million increase in taxable property is relatively small compared with prior years, and some say it’s driven simply by local governments upping property values.

Others, however, consider it a better sign for a limping local economy, particularly in the region’s hot spots.

Redevelopment in downtown Buffalo.

More upscale homes in Clarence.

New apartments in Amherst.

More construction is on the way.

The taxable figures compiled by Erie County for 2014 also mark a somewhat surprising shift in of how much our local municipalities are worth these days.

Amherst is worth more than $8.4 billion, which is by far the largest tax base in Erie County, the figures show.

Buffalo is second at $6.4 billion.

Third, at $3.2 billion, is Clarence, followed by Lancaster at $2.7 billion.

Clarence and Lancaster, in fact, now have larger tax bases than Cheektowaga and the Town of Tonawanda despite having half the population.

It may be a shift from the old to the new, from the inner ring to the outer.

“Clarence is a residential retreat for many of the highest income groups in the Buffalo metro region,” said Henry L. Taylor Jr., director of the Center for Urban Studies at the University at Buffalo, “and apparently those big old houses add up.”

Across Erie County, taxable assessed values ranged from a decrease of 0.8 percent in Sardinia to an increase of 8 percent in Wales, where National Fuel built a new gas compressor station, according to county figures.

Any increase in the tax base is a good indication the market is strong and there’s both residential and commercial growth, said Joseph Maciejewski, director of Real Property Tax Services for Erie County.

“I think we have another few years of positive momentum in that local tax base, which should help ease some of the local pressures,” said Gary Keith, chief economist for M&T Bank.

That’s good news for some suburban towns, as they use this month to figure out next year’s budget and tax rate.

If there is new growth – and the amount raised in taxes remains the same – taxes should go down for residents, because there’s a larger tax base to spread the total bill.

The question, Keith said, is whether that growth is simply pent-up demand after the Great Recession, or the region really is growing the economy.

“I think we’re probably in the growing economy mode,” Keith said. “I think there is a different feel about Buffalo and that optimism can sort of be self-perpetuating.”

Taxes stable

The increase in the tax base, in fact, is helping keep Erie County taxes stable for 2014.

That’s the case in Amherst, too.

Despite spending going up next year, officials project town taxes to go down about 2 percent for most Amherst homeowners.

That’s about $40.

Critics, however, are wary about any rosy tax projections from politicians during election season.

“They’re reversing the reality,” said attorney Peter Allen Weinmann, who challenges assessments for corporate and residential taxpayers. “There has been very little new economic activity that generates an increase in property values.”

Instead, he said, local tax bases continue to creep along with most of the growth generated by updating values on already existing properties.

Even those cases should be taken with a grain of salt, because many are often tied up in legal challenges, Weinmann said.

That was part of the problem heading into this year, when the tax base across the county dipped by nearly $100 million.

Municipalities faced a number of large assessment challenges that resulted in some big settlements, Maciejewski said.

It was the first time the countywide tax base dropped in 12 years, he said, and only the fourth time since 1979.

Back on tax rolls

Now, the county has gotten involved to help towns defend those challenges and that seems to be paying off, he said.

The county’s tax base has grown to more than $37 billion for 2014, up 1.4 percent or more than $509 million, according to the county figures.

Some of that is property coming back onto the tax rolls.

In Lackawanna, for example, the tax base jumped 7 percent, largely because two big parcels at the former Bethlehem Steel site were brought back on the rolls, said City Assessor Frank Krakowski.

In the Town of Aurora, the tax base went up more than 2 percent, partly because a 15-year payment-in-lieu-of-taxes agreement with Fisher-Price has expired, said Assessor Thelma Hornberger.

And on Grand Island – where the tax base increased 3 percent – the town reassessed properties for the first time in nearly three decades, resulting in higher values on prime waterfront property and vacant land now being assessed as building lots, explained Supervisor Mary Cooke.

But some of what’s happening in Grand Island and elsewhere is new construction.

New construction

In Amherst, the tax base increased about $150 million to $8.4 billion.

A third of that is from the reassessment of banks, apartments and office buildings, said Supervisor Barry Weinstein.

The rest – or about $93 million – is attributable to new building, specifically new apartments off Sweet Home Road that went on the tax rolls, he said.

“The economy has improved,” Weinstein said, “and Amherst is a nice place to invest.”

In Buffalo, the tax base went up more than $62 million to $6.4 billion, with the help of some large-scale makeovers – from renovations to the Electric Tower to a restaurant on Elmwood to apartments along Main Street, said City Assessor Martin Kennedy.

For now, Kennedy said, some of the projects – like the Hotel @ the Lafayette – have tax exemptions attached.

But it bodes well for the future, he said, and it’s just the beginning of more construction on the horizon.

“It’s an exciting time,” Kennedy said. “For a long time you wouldn’t see any money coming into the city. From where we’ve been ... this is really wonderful.”

New Clarence housing

In Clarence, new residential housing continues to pad the tax base, which grew by 1.3 percent to $3.2 billion.

“It was a good year,” Clarence Supervisor David Hartzell Jr. said of the tax base, “but that number will continue to grow because of growth in residential homes, specifically a growing interest in homes above $300,000.”

In fact, the four local communities worth the most – Amherst, Buffalo, Clarence and Lancaster – accounted for two-thirds of the county’s increase in taxable value for next year.

It’s not surprising, said Taylor, the UB professor.

“Amherst is in very good shape,” Taylor said. “There’s a lot of residential development, the University at Buffalo has attracted an enormous level of development and then you add to that the higher income groups who live out there, and you have a very healthy tax base.”

Still, not everyone saw their tax base expand.

The City of Tonawanda and the towns of Marilla, Sardinia and Collins all watched their values dip, although only slightly.

“All the more reason to be watching the bottom line,” said Cooke of Grand Island.

Cooke and Hartzell agreed new growth is welcome, but municipalities still need to be controlling costs, particularly as they face a state-mandated tax cap.

“You can have assessment going up,” Hartzell said, “but if you’re not cutting on the back end, it’s like a bucket with a hole in it.”


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