Tax Fraud by the Town of Saugerties? 

     In my opinion, The Town of Saugerties is, and has been for a few years, illegally discriminating against certain taxpayers. As we have for each of the last 7 years, we expect to take this issue to court, and file suit against the town to try to correct this. 

     The two issues are, first, discriminating against new homeowners with the infamous "Welcome Stranger" policy. This means raising the assessments selectively of homeowners who newly purchase a home so the assessment becomes higher because they purchased the home for considerably more than it's assessed value, because that assessed value was set years ago when home prices were lower. This is an issue that has gone all the way to the Supreme Court and been declared unconstitutional. 

     The second issue is the town's setting the equalization rate at 100% which is claiming (falsely, we have found) that properties in the town are uniformly assessed at 100% of their market value. 

     Of course, the town denies they do this, claiming to do either a complete revaluation or a reassessment annually, so they can claim the assessments in the town are at 100% of market value. We did some research that shows this is far far from the truth. We prepared a database of all homes sold through the Multiple Listing Service in Saugerties during the year 2002. We tallied the selling prices and the assessments for all those homes. The results showed that the average assessment of a home sold in 2002 at the time it was sold was 65% of the selling price. 

     Here's a typical example of what this means for a property owner. I know a buyer who is purchasing a property for $156,000. It is currently over assessed at $195,000. On the assumption that the purchase price represents the market value, if the true assessments and equalization rate were 100%, then one could argue the assessment should be lowered to $156,000. The approximate annual property taxes in Saugerties are 3.3% of the assessment, so the taxes would be reduced from approximately $6,440. to $5,150. Here's the problem: Since the true equalization rate is 65%, a fair assessment is 65% of market value, or $101,400. and a fair tax burden, $3,350. 

     Now New York State has a department called the Office of Real Property Services (ORPS) that is supposed to oversee the towns. Jim LaPlant from ORPS advised me that ORPS will challenge the equalization rate in Saugerties, saying that "there is a large discrepancy" between the 100% Saugerties claims and the truth. He said that on April 24th 2003, a closely related metric, the "residential assessment ratio," (RAR) was established by ORPS to be 76.71%. This is in line with our research, the reason it is higher than what we came up with is due to the fact that ORPS unfortunately uses data from a period of time earlier than calendar 2002, so the data is somewhat outdated, but it is still beneficial to the aggrieved taxpayer compared to 100%, and according to Jim LaPlant, the RAR can be used in the grievance process. 

     Unfortunately, ORPS does not challenge and finalize the equalization rate until months from now, sometime before the school tax bills go out in September, so that number will not be available to taxpayers by grievance day, May 27th. 

Andrew Peck May 3rd 2003