Across Nassau County, the conventional wisdom goes, the tax assessment system is so unfair that it produces vastly different assessments on similar homes in similar neighborhoods.
Is that so?
A Newsday analysis of the tentative 2012 tax roll finds there is reason to believe that the vast majority of county assessments are fair. The analysis shows variations between similar homes are far less severe than commonly believed, and are well within national standards.
The belief that assessments are not fair is fueled by anger over high property taxes and has led tens of thousands of Nassau County residents - and many more businesses - to challenge their assessments every year. In doing so, they hope to bring down their tax bill, if only by a few dollars, but also to strike a blow at a system they don't like. And more often than not, they succeed, which costs the county some $100 million annually in residential and commercial tax refunds combined.
Experts said Newsday's analysis of the data was appropriate. These findings were supported by reviews done by New York State and by a respected property information firm.
This raises the question of whether the large numbers of grievances filed each year are more the product of a system that all but encourages it than an assessment system that is fundamentally unfair.
Newsday reported last month that county assessment records are so mistake-filled that they describe one small Levittown cape as having 70 toilets and a Glen Cove ranch with 55 extra stall shower bathrooms. Even Nassau County Executive Edward Mangano got caught in the errors: his own assessment does not include a half bath and central air-conditioning in his Bethpage home, Newsday reported.
County officials said these errors did not result in significant numbers of bad assessments, but experts suggest these errors undermine taxpayers' faith in their assessments.
Mangano plans reforms
Last week, Mangano announced his first steps to reform the county's widely reviled tax assessment system. Under his proposal, the county would save $50 million next year and $300 million over four years by requiring commercial property assessment challengers to submit certified appraisals by Oct. 1. Under Mangano's plan, homeowners would be assessed every four years instead of annually.
In a review begun before Mangano's announcement, Newsday looked at the assessments of thousands of pairs of residential properties in Nassau. Each pair was in the same school district and village, and both houses shared at least 10 key characteristics, such as square footage and number of bathrooms. Experts in the assessor's office said they consider those characteristics among the ones that are the most important to a property's value.
The analysis showed that more than 80 percent of the pairings had a difference in assessment of 10 percent - an accepted national standard - or less. In addition, the review found that fewer than 1 percent of the pairs had a difference of more than 30 percent.
Area experts, assessors and others said Nassau has improved its valuations of residential properties. Nassau Assessor Ted Jankowski said, "Did we make things better? Yeah, we did. Is there a lot more to do? Oh, yeah, oh, my gosh. There's just so much more to do."
The experts said the large number of tax protests may be a function of the grievance system itself, the area's economic difficulties and other factors - not of the residential assessments themselves.
"No two houses are the same," said Pearl Kamer, the chief economist with the Long Island Association. "But if you can get it down to a 10 percent difference, I think as an assessor, you're doing a pretty good job."
Perhaps, Kamer noted, understanding that assessments themselves aren't the problem will lead to a focus on the broader issue: high taxes. "The basic problem may be more than the assessment procedures and processes. It may simply be that our taxes are too high," Kamer said.
David Rogers, a spokesman with property information firm First American, in Austin, Texas, which does similar research, said his company's data for Nassau back up Newsday's findings.
"Most houses in a neighborhood are pretty darn close [in assessment value] to each other," Rogers said.
Grieving taxes is popular
Experts said the grievance system itself plays a prominent role in the public's view. Grieving taxes became a popular tool for homeowners long before Nassau County's reassessment in 2003, when assessments were far more disparate. But grievances haven't declined even as assessments have improved - and homeowners don't have to provide much documentation or proof to grieve their assessments.
"While the number of filings is down slightly, the burden on taxpayers as a result of tax . . . [protests] has been growing. That's unsustainable," said Deputy County Executive Patrick Foye, who heads an assessment reform team.
According to Newsday's data, school districts such as Jericho, Syosset, Valley Stream 24 and Plainedge appear to have the best assessment picture, while Garden City, Hempstead and Rockville Centre have more pairs with wider disparities. Even then, however, the pairs with extreme differences are few and far between.
The industry standard of measuring assessment accuracy, known as a coefficient of dispersion, analyzes assessed values in the context of actual home sales. The lower the C.O.D., the fairer the assessment. The International Association of Assessment Officers' standard for an area like Nassau County is 15 percent. Nassau's residential C.O.D. sat at 6.5, according to a New York State analysis.
Smithtown assessor Gregory Hild said the data show that Nassau County is succeeding in its effort to make assessments less disparate. "Hats off to him," Hild said of Jankowski.
Unique, high-value homes
Hild noted that assessment is particularly complicated for unique or high-value homes that have fewer comparable sales. He also noted that assessment is made more difficult in a tumultuous real estate market.
Newsday found that in some cases, the property pairs with assessment differences above 10 percent included unique or high-priced properties, or those with recent renovations. The disparity was due in part to limitations in Newsday's analysis, such as not accounting for all multifamily properties, or how far away two properties in the same community were from one another.
Nonetheless, the nearly 20 percent of property pairs that had assessment disparities above 10 percent is "a huge issue," according to Dix Hills tax grievance lawyer Fred Perry, who represents many homeowners across the region who grieve their assessments.
And even a 10 percent difference in assessment could mean significant tax savings, he added.
"I agree for a large assessing unit like Nassau County, that would not be a horrendous performance, but in the scheme of things, 10 percent is still appreciably over-assessed to most taxpayers, and they would like to protest," Perry said.
But some degree of difference in assessment is to be expected, officials said.
"Appraisal is not a science, it's kind of an art," said James Dunne, director of research, information and policy analysis for the state Office of Real Property Services.
With Celeste Hadrick
Crunching the numbers
Newsday obtained the complete Nassau County tax roll in order to do its own analysis of the assessment system. Focusing on residential properties, Newsday used database and spreadsheet software to analyze more than 250,000 property pairs that had the same characteristics in 13 categories:
Property class (single-family, multifamily)
Number of bathrooms
Type of location (on or near a primary road, a secondary road, or a major highway, for instance)
Site type (waterfront, apartment site, etc.) n Style of home (split, Colonial, ranch, for example)
Newsday then compared the two properties’ assessments, characterizing the difference as “low” (10 percent or lower), “medium” (more than 10 and less than or equal to 30 percent) or “high” (above 30 percent).
In some cases a same house was included in more than one pairing.
The research did not incorporate the sales price on a given property, a tool most assessors use. And while there are many more categories, Newsday chose the ones that representatives from the assessor’s office said were key. Experts said Newsday’s method of analyzing the home data was appropriate.
The analysis relied on the inventory data available in the tax roll itself. Last month, Newsday reported that there are potentially thousands of inaccuracies in the number of additional plumbing fixtures in county residences. Although that category wasn’t a factor in Newsday’s analysis, it’s possible other inaccuracies could affect the data. —
Randi F. Marshall