A new state law and the lack of recent property revaluation in North Tonawanda are the primary reasons Niagara County Legislator John S. Tylec is proposing a 50 percent increase in the maximum county tax exemption for military veterans.
The Legislature will hold a public hearing on the proposal at 7:30 p.m. Tuesday.
Tylec, D-North Tonawanda, noted that his proposal to raise the ceiling on the exemption would affect all veterans who own property in the county. "I have to admit, my primary concern is how it would impact North Tonawanda," Tylec said.
County Real Property Tax Services Director William F. Budde Jr. said making more property exempt raises the tax bills of everyone whose property is not exempt. He said the existing veterans' exemption shifts $1,750,000 in taxation onto non-exempt property owners.
He said Tylec's measure would shift another $133,500 in taxes to non-veterans, a change equal to a county tax rate increase of 2 cents per $1,000 of assessed valuation.
Budde said North Tonawanda's assessments are so far out of date that the state Division of Equalization and Assessment has assigned the city an equalization rate of 66.75. That means the state calculated that property in North Tonawanda is being taxed at only 66.75 percent of full value.
A recent revision of the state Real
Property Tax Law requires that equalization rates are to be applied to veterans' exemptions, which had the effect of cutting the exemption in North Tonawanda by about one-third.
City Assessor Brian M. Hess said the result was "If you had an exemption of $10,000, you now have an exemption of $6,675."
The exemption represents the amount subtracted from a veteran's property assessment before the tax bill is calculated.
Hess said North Tonawanda has not updated its assessments since 1988. "They don't want to touch it," he said of the Common Council.
Tylec said by boosting the ceiling on the exemption and making it applicable to all 1998 assessment rolls, "Veterans in North Tonawanda (can) participate at the same level they had before."
Budde said veterans in other municipalities with relatively low equalization rates will see an impact. He listed the Town of Niagara and the City and Town of Lockport as examples.
The current maximum exemption for veterans is $80,000; Tylec would raise the cap to $120,000. There are three types of veterans' exemptions. Budde said 15 percent of the maximum is available to a wartime veteran. Tylec's measure would raise that maximum exemption from $12,000 to $18,000.
Veterans who served in a combat zone are eligible for an additional 10 percent of the maximum. Tylec would hike that figure from $8,000 to $12,000.
Disabled veterans may receive additional exemptions depending on the extent of their disability. Budde said a 100 percent disabled veteran is eligible to receive 50 percent of the maximum exemption, which is now $40,000, but would increase to $60,000.
"There's no question North Tonawanda would get hurt the most," Tylec said. "If the state hadn't forced the implementation of the equalization rates, we wouldn't have to do this."
Budde said the equalization rates were taken into account for calculating exemptions many years ago, but under previous law, once a municipality reached full value, it was allowed to drop the use of the rates for determining the exemption amounts, even if it let its assessments go out of date.
The State Legislature passed a law this year allowing localities to increase the maximum exemption, but at the same time brought the equalization rates back into play.