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TAX BURDEN STABILIZES AS HOME, COMMERCIAL BASES GROW

For the first time in four years, the tax burden in the city is not shifting from commercial properties to homeowners, according to City Assessor Dominic L. Penale Jr.

And for the first time in a long while, both the residential and commercial tax bases have grown.

The new adjusted base proportions calculated by the state set the tax burden at 53.3 percent for non-homestead and 46.7 percent for homestead. The proportions in 1996 were 53.1 and 46.9 percent.

The new assessment roll indicates that if the tax levy were to remain the same, the homestead class would pay 13 cents less than the current $12.49 per $1,000 of assessed valuation.

Owners of non-homestead properties would pay 11 cents more than the current rate of $28.94 per $1,000.

The residential base has increased by $4 million to $835.9 million. Penale attributed $2 million of the increase to sales of homes in the Love Canal area and the rest to new construction and home additions, he said.

The city's residential base is growing more quickly than the commercial base.

Special franchise and railroad values, set by the state, are decreasing, Penale noted. Last year, the city lost $6 million in assessed value when utilities won a 10 percent reduction in assessments statewide from the state Board of Real Property Services in Albany.

This year, the city lost $2 million in taxable value under a settlement between the state and Conrail and another $1 million from National Fuel.

But, those losses were offset by commercial construction on Niagara Falls Boulevard, including the Target store and related commercial development. The city's commercial valuations gained a net $500,000, rising to $406.5 million.

Last year's shift of slightly less than 1 percent toward homestead property was the smallest in three years. The equalization rates shifted the burden toward the homeowner by 2 percent each in 1994 and 1995, decreasing the tax rates for commercial and industrial properties.

Penale said the state equalization rate on which the tax burden is based is calculated on net physical changes in the assessed value, such as new construction. Penale said the assessed value should not be confused with the taxable value. The assessed value accounts for all of the physical property in the city. The taxable value reflects only the property that is on the tax roll. And, Penale said reductions in assessments, such as special franchises, must be made up within the non-homestead class.

"If there are reductions within the class, the burden doesn't shift to the other class. It stays with that class," he said.

Business owners and organizations, such as the Niagara Falls Area Chamber of Commerce and the Pine Avenue Business Association, have waged a 14-year battle to close the gap between the rates paid by homeowners and businesses. Businesses overburdened by taxes don't have the capital to expand, hire new employees or even stay in business, they argue.

They have persuaded State Sen. George Maziarz, R-North Tonawanda, to draft legislation that would prohibit municipalities from charging business owners more than 75 percent of what they charge homeowners. The groups are looking for a sponsor for the bill in the Assembly.

The city's non-homestead rate currently is 230 times higher than the homestead rate, Penale said.

The city's total taxable assessed value is $1.242 billion.

Despite the gain, the total assessed valuation remains less than it was in 1995. The assessed value dropped from $1.246 billion in 1995 to $1.238 billion in 1996. The city's assessed value in 1994 was $1.251 billion.

The current assessment total excludes about $360 million in exemptions, including $270.5 million on state property, such as the New York Power Authority and parklands around the falls.

Veterans exemptions remove another $50 million from the tax roll, while those for senior citizens take off $22 million, Penale said.

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