Why are real property taxes are so high? That is a complex question with many partially accurate answers. One popular but simplistic answer is that there are too many tax real property tax “exemptions.” Here are some pertinent facts on the subject of real property tax “exemptions.”
There are more than 80 different tax exemptions that are legally authorized. Taken together they have an enormous impact upon the allocation of our tax burden. The total assessed valuation of all property in Allegany County is $2,782,949,393. The total value of all exempt property is $944,022,933, or 33.92%. That means that more than one-third of all real property in the County receives some type of exemption. In theory, if all of that land were taxable our tax rate could be reduced by 33%. At our current tax rate those exemptions cost the County more than $15.7 million in tax revenue. Obviously this is a huge issue.
Under New York law, there must be a statutory basis for any exemption. The State Legislature authorized every single property exemption. Most of those exemptions are mandatory, which means that the County Legislature has no choice about whether or not to allow them. Some of the larger exemption categories (with values of the exempt property) are:
- State owned lands ($143,576,523);
- County owned lands ($9,048,799);
- Town owned lands ($33,619,324);
- Village owned lands ($47,146,371);
- School District owned lands ($131,141,348);
- BOCES owned lands ($4,061,611);
- Special Districts (Sewer, Water, etc.) owned lands ($9,497,600);
- Non-Profit Religious (churches) owned lands ($34,162,097);
- Non-Profit Colleges and Universities owned land ($277,358,130);
- Non-Profit Hospitals ($8,101,335);
- Veterans Organizations (American Legion, VFW, etc) ($1,628,153);
- Volunteer Fire Departments & Companies ($46,882,277);
- Agricultural Buildings ($6,380,337);
- Agricultural Districts ($15,391,117); and
- Agricultural Land – Not in Ag District($5,211,708).
These exemptions fall into three categories; government, charitable, and agricultural. It wouldn’t accomplish anything to tax government owned land since those governmental entities would have to raise their own taxes to pay any imposed taxes. Do we really want to tax churches, schools, hospitals, veterans organizations, and fire halls? They organizations serve valuable community services and are already struggling. Agricultural exemptions are important to everyone, since we all must eat. There are good reasons for these exemptions.
There are only a handful of “optional” tax exemptions that the County Legislature has chosen to enact. The largest single category of exemptions are those granted to veterans. About 2,900 veterans receive exemptions on about $25.3 million of residential property. These exemptions cost the County $422,451 of potential tax revenue. The Board has strongly supported to this segment of our population that have faithfully served our nation. The second largest category are exemptions to low-income senior citizens. About 1100 seniors receive $377,762 in exemptions on their residences. This exemption helps retirees on fixed incomes to stay in their homes. There is another exemption for first time low-income homebuyers. It affects only 5 properties and generates $2,200 in exemptions. Finally, the County has granted several types of business property exemptions to help qualified business ventures. These receive $71,841 in total exemptions. I support all of these optional exemptions. They are reasonable and compassionate, and go to deserving citizens.
Two current candidates for County Legislator have publicly called for elimination of many, if not all, tax exemptions. Norm Ungermann (District 2) has repeatedly declared that there are more than 80 exemptions, and has called on the County Legislature to rescind many of those exemptions and make everyone “pay their fair share.” Sharon Collins (District 1) has passed out literature stating “Too many property tax exemptions, resulting in putting the burden of taxes on the non-exempt.”
County based exemptions amount to less than $875,000, mostly for deserving veterans and qualifying senior citizens. The truth is that we can’t do anything about the other $14.9 million of state granted exemptions. Consider these facts when you vote on November 5th.