It should come as no surprise that New Yorkers pay some of the highest property taxes in the country.
But a report released this week underscores that in this highly taxed state, homeowners in Western New York carry the heaviest burden.
“You have a combination of relatively expensive government and relatively low real estate values, and what you get is a high effective tax rate,” said E.J. McMahon, president of the Empire Center for Public Policy, which released the latest numbers in its annual Benchmarking NY study.
The median effective tax rate of $35.72 per $1,000 of assessed value here was the highest of any region in the state in 2013, and well above the state median of $30.60, according to the report, which uses data from the State Comptroller’s Office.
“Does this make us the worst of the worst of the worst?” asked Dottie Gallagher-Cohen, president and CEO of the Buffalo Niagara Partnership. “It’s disheartening, really.”
Just how high can a property tax rate here get?
In the Town of Cheektowaga, the tiny Village of Sloan – population 3,475 in the last census – had a rate of $64.67 per $1,000 assessed, giving it the dubious distinction of highest property tax rate anywhere in the state. A home in Sloan assessed at the median home value of $73,700 could have expected to pay $4,766 in property taxes in 2013.
“Being that our homes are assessed so much lower than other municipalities, that will drive the tax rate up to earn the same type of money that you’re getting in, say, the Village of Hamburg,” said Sloan Village Clerk Debra M. Smith. “So I think it’s more important to look at the cost-effectiveness of every dollar that we actually collect and not the tax rate.”
The Empire Center’s online calculator on seethroughny.net allows users to compare tax rates across localities and break them down into portions paid to the county, town, village and school district. The calculator shows that Sloan’s village tax rate of $10.47 was actually lower than the Village of Hamburg’s $11.60, using Smith’s comparison.
The real culprit is the school district and, to a lesser extent, a high town tax. The Cheektowaga-Sloan School District tax rate of $32.90 accounts for more than half of Sloan’s total tax rate.
District Business Manager Wayne W. Drescher also pointed to the village’s low home values. “Our rate is significantly higher, but if you look at the tax that we tax each home, you’ll find that our actual amount levied to each house is actually less than basically every other community surrounding us,” he said.
Drescher also questioned the Empire Center’s median home price for Sloan, putting that figure closer to $50,000.
“If you find a home for sale at $70,000, it’s top-of-the-line in Sloan,” he said.
All but three of the localities on the report’s list of the Top 20 property tax rates in Western New York are found in Allegany County. The three outside Allegany County are all in Erie County: Sloan at No. 1, the portion of the Town of Cheektowaga in the Cheektowaga-Sloan School District at No. 12 and the Village of Kenmore at No. 15.
Kenmore had a tax rate of $52.70, so a home at the median value of $105,300 could expect to pay $5,549 in taxes in 2013. About 39 percent, or $20.30 of that tax rate, went to the Kenmore-Town of Tonawanda School District.
But why are school tax rates so much higher here?
For a comparison, McMahon used Allegheny County, Pa., which is more populous but has similar poverty, income and median home prices.
“That’s as close a comparison as you can find,” he said. “That’s someplace very similar in the next state over.”
The difference lies in the costs for a higher number of full-time employees per capita here, even after you take into account that teacher salaries in the Buffalo Public Schools have been suppressed for years because a new contract has not been negotiated, McMahon said.
“After years of state-enforced austerity in the largest school system in the county, the per-pupil expenditure in Erie County school districts as a whole is 10 percent higher than in Allegany County,” he said.
Localities faring better on the Empire Center’s list were mostly sparsely populated towns in southern Erie County.
Topping the list of lowest property tax rates in Western New York was Sardinia in the Yorkshire-Pioneer School District. There, a homeowner paid a tax rate of $18.09 per $1,000, resulting in a total tax bill of $2,705 for an average home assessed at $149,500.
Also on that list are Wales, Elma, Concord, Colden and Holland.
The number of local governments has received a lot of attention in recent years as a primary driver of property taxes, especially by Gov. Andrew M. Cuomo, who likes to put that number at 10,500 in the state.
But McMahon says that’s misleading. Cuomo’s number includes every special district, such as lighting districts, he said.
“Those are just lines on a map that determine if you pay $3.20 a year for lights or $4.16,” McMahon said.
New York actually ranks 27th of the 50 states for layers of government, he said.
“I don’t think it’s necessarily true that more layers equal a higher tax bill,” McMahon said. “More spending equals a higher tax bill – and higher spending relative to property values.”
New Jersey is the only state that rivals New York in property taxes, and it has half as many local governments per capita as New York, McMahon said. “It hasn’t made New Jersey cheaper,” he said.
Similarly, New Hampshire has significantly more local governments than New York per capita, yet that state has lower taxes, McMahon said. “It’s not really the layers of government,” he said. “What it is, principally, especially upstate New York, is the school districts.”
A taxpayer’s “all-in” property tax bill is often a key factor in where people choose to live and where businesses choose to locate, according to the report.
That means it can be harder for companies to attract and retain talent here, Gallagher-Cohen said.
Also, the area’s sprawl and population stagnation continue to weigh down Western New York, she said. In 1950, the region had a population of 1.1 million and 123 square miles of developed land. By 2000, it had the same population, but 367 square miles to maintain.
And in the last 20 years, the region has added 525 miles of new roads, which cost $26 million annually to maintain, Gallagher-Cohen said.
“The inherent baked-in costs in Western New York are very challenging, and that’s one of the reasons why investing in smart-growth principles and development is so important,” she said. “Because density creates efficiency.”