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Why your county tax rate rose, despite what you heard

There’s a question many Erie County homeowners probably asked as they paid their county tax bills last month: How can county leaders say the county tax rate went down this year when many residents’ rates went up?

The confusion is understandable.

Consider that in October, County Executive Mark C. Poloncarz proposed a 2016 budget that he said left the county tax rate unchanged. Then in December, county legislators boasted they succeeded in lowering the county tax rate for the second year in a row.

But when tax bills came out in January, the county tax rate for homeowners in 22 out of 28 cities and towns went up.

“I don’t recall County Executive Poloncarz announcing a 9 percent increase,” said Ed Mills of Buffalo, who was left puzzled after opening his county tax bill.

For homeowners who saw no change in their home assessment, the higher tax hit struck a nerve.

It’s the time of year that Joseph Maciejewski, the county’s director of real property tax services, inevitably fields calls from confused taxpayers and local government leaders.

He called the tax rate formula undeniably confusing.

The bottom line: Tax rate statistics can be grossly misleading. When it comes to your tax bill, what matters is whether the property values in your community are rising in the current market and how much money your municipality collects in property taxes overall. Real estate values are appreciating in the majority of Erie County communities. And the county is collecting more in property taxes overall.

The result: A majority of Erie County homeowners are paying higher taxes.


See the Erie County property tax rate comparison for every city and town in 2015 and 2016


Think about it this way: Though county leaders grew total county spending this year by less than 1 percent, they increased the total amount collected in property taxes – the property tax levy – by $11.7 million, or 4.8 percent. Property owners carry the burden of that increase.

But that doesn’t mean county leaders are lying when they say the tax rate went down.

When Poloncarz talked about a proposed budget that left the county tax rate unchanged, he used a specific string of words: the “full value tax rate.” Similarly, when legislators referred to a decrease in the tax rate, they referred to the same thing. The full value tax rate is the rate the county would charge property owners, assuming their homes were assessed at what they’re really worth.

But relatively few properties have assessments that match their true market values.

Many local governments do not adjust their residents’ property assessments every year. It’s costly, time consuming, and often politically unpopular. In most communities, homes are worth more, and sell for more, than what they are assessed for by their city or town.

The state compensates for the gap between a property’s assessed value and its estimated true value by employing an “equalization rate.” So for instance, the City of Buffalo has not reassessed its properties in several years. But in that period of time, city property values overall have gone up, as evidenced by higher home sales.

Last year, Buffalo’s equalization rate was 97 – meaning that based on marketplace data, the state believed the city’s property assessments were at 97 percent of the properties’ actual values. For 2016, the state dropped the city’s equalization rate down to 88. That rate change lead to a tax rate hike for all Buffalo homeowners.

To complicate matters further, aside from the tax rate residents pay for regular county and library operations, the county also tacks additional charges to tax bills for certain community college fees and Erie County Board of Elections operations. In 2016, community college charge-backs resulted in an additional $994,248 in costs passed on to property taxpayers. Increased Board of Elections expenses resulted in an additional $556,593 this year.

That’s another $1.5 million added onto tax bills that don’t get counted as part of the county’s “full value tax rate.”

Mills, an Elmwood Village resident who has worked as a commercial real estate broker for more than 20 years, said this complicated formula makes it too easy for politicians to make statements that are technically accurate but realistically false.

“If the County Legislature takes the credit for the tax rate going down,” he said, “it’s somewhat disingenuous because the net effect is that the homeowners’ property taxes in the City of Buffalo went up by 9 percent.”

Maciejewski pointed out that in actual dollars, county tax bills increased by relatively small amounts. Moreover, county tax bills tend to be the lowest of all property tax bills homeowners pay, dwarfed by both city/town and school property taxes.