East Hampton - Among the buzzwords that rile crowds and churn the stomachs of small town politicians, 'reassessment' may be the biggest boogieman in East Hampton right now. The town has never been uniformly assessed since first compiling the tax rolls in the 1930s, and wide-ranging discrepancies exist. The East Hampton Town Board considered including a town-wide reassessment in the 2009 Capital Budget, however the motion was defeated and several subsequent attempts to revive the discussion were muted. Successfully pursuing a reassessment hinges on informing the public of what to expect and why it is so desperately needed.

Reassessment is tax neutral, as the tax rates are set by the collecting district. Reassessment looks to alter the individual property value to which the tax rate is applied.

"From a mechanistic point of view it's leveling the field," East Hampton Town Assessor Eugene De Pasquale explained during a recent information session with the Group for Good Government (GGG), adding that "a reassessment is the only way to even out the rolls."

Homes are assessed when they are first built, if there is a major reconstruction of the main house or if the homeowner files a grievance with the town claiming they are over assessed. Properties are not reassessed after minor renovations or additions or if the house is sold to a new owner, according to Town Assessor Jeanne Nielsen, who has worked in the Town Assessor's Office for 21 years and was also present at the GGG meeting. Since the town has never done a full reassessment, the value of any given property in town "could range from the 1930s right up to today," Nielsen said, without regard for the changes in the real estate market. The main goal is to "bring everyone up to full value in the same valuation year," Nielsen explained.

A reassessment would recalculate every property's worth according to the current marketplace, which means some residents' taxes will go up, however the process is tax neutral. "If you were under assessed before, you're going to be paying more," John Wolham, regional director of the Office of Real Property Services (ORPS), explained plainly, though assessment is "simply a mechanism for distributing the tax rate once the amount needed is determined." In other words, once the Town Board, School Board, Department of Highways, State, County and other tax districts set their annual budgets, that total amount represents a percentage of the full combined value of the district's properties, the tax rate, which is then assessed from each individual property as a percentage of its value. Assessment itself has no affect on the tax rate.

The biggest obstacle to reassessment in East Hampton right now is the cost. Representatives of ORPS and officials in the Town Assessors Office have pegged the overall cost at over $3 million, which would include hiring outside staffing assistance, providing them with office space and supplies and upgrading the town's computer systems. The town is currently in the process of updating their geographic information systems (GIS), a digital map of the town with the pertinent history of each parcel, and is looking into advanced mapping techniques through pictometry, where photos are taken from five angles (the four cardinal directions and an eagle-eye view) across the town to create a three dimensional picture of the town.

Town Assessor Eugene De Pasquale, Regional Director of ORPS John Wolham and Town Assessor Jeanne Nielsen at a recent information session with the East Hampton Group for Good Government. Photo by Aaron Boyd

According to Nielsen there are approximately 15,000 improved properties in the Town of East Hampton, 9,000 to 10,000 of which have been assessed in-house by town staff since 1989, however there have been significant changes in the real estate market in just that short time as well. Looking at the figures from those reviews, Nielsen estimates that, in general, homes currently valued between $500,000 and $750,000 are being over assessed and those valued between $1 million and $3 million are typically under assessed. However, "Because there has never been a town-wide reassessment, the variability will be great," Nielsen insisted.

While the current assessed value of a property can provide some indication of how reassessment will change, geography tends to be more telling. According to Southampton Town Assessor Ed Deyermond, homes 'south of the highway' and waterfront properties are notoriously under assessed and were the most affected by Southampton's first town-wide reassessment in 1990. Southampton assessed again in 2004 and 2006 and has maintained an up-to-date tax roll every year since 2007.

According to Southampton Town Assessor Ed Deyermond, annual assessment has led to lower costs in his department.

"It's a good situation for everybody," said Deyermond, "It's easy for the taxpayer to know what the value of their property is, takes the mystery out of it."

The first reassessment in 1990 was admittedly painful, however the town ran a large-scale public relations campaign to keep their residents informed throughout the process. "We were most afraid that senior citizens would be affected," Deyermond stated, so the town made assistance programs available, "but we really didn't need it."

Despite the initial hardship, updating the tax rolls annually has been beneficial to Southampton. "You have to spend a considerable amount of money in year one," Deyermond explained, however once the "nucleus is there in the system," maintaining the rolls is a simpler task.

New York State also provides assistance to municipalities that want to maintain their rolls in the form of $5 per parcel per year for as long as the town maintains an updated roll at 100 percent valuation. "What we've found is that the $5 per parcel is negligible in terms of the initial reassessment," Wolham admitted, "but it tends to cover the in-house cost of doing this in subsequent years."

That has held true in Southampton, where Deyermond says that the state aid covers one-third of his department's budget. "It's been a big help to us," he asserted, adding that the department's budget is steadily decreasing, which he attributes more to maintaining the rolls than his own managerial techniques.

Besides the incentives, there are a few other benefits to the municipality as well, according to Wolham. "Once the roll is updated the number of grievances will decrease," which have been clogging up the assessors office exponentially since last year's tax increase, "and municipalities that do reassess tend to see a better bond rating," as the rating institutions have a clearer picture of the full value of the town.

Additionally, any state or county owned land in the town that is on the tax rolls can only be reevaluated during a town-wide reassessment. There are no taxable state-owned properties in East Hampton according to the Town Department of Information Technology, however there are 21 county-owned properties on the rolls, totaling 41.51 acres.

If reassessment does happen in East Hampton, it would most likely be done at 100 percent of valuation, meaning the property's full worth would be listed on the tax bill rather only a portion. East Hampton is current assessed at 0.72 percent of full value. "If the town were to reassess, most do it at 100 percent of real market value," Wolham explained, "It's the most transparent way to do it." Though some residents may experience 'sticker shock' at what appears to be a monumental spike in their assessed value, that number would represent the full value of their home, whereas the current value on their tax bill is only a fraction of the real assessed value.

Despite incentives and a perceived need, there is little political will to pursue reassessment and even less funding available.

Unlikely
While officials and regulators would like to see the town assessed, the Town Board has stalled in their attempt to move forward. The overall cost of $3 million can be bonded for as a capital project, however funding for an initial $100,000 study of the effects and implementation of a reassessment would have to come from the general fund, which is running a historic multimillion-dollar deficit. The Town Board declined to fund the preliminary study for lack of funding, though councilpersons have expressed their hesitation toward the subject and seem content to let the next administration make the decision. De Pasquale was not optimistic. "It's unlikely they're come up with the money," he wagered, "They couldn't get $100,000 for the study."

There is little political will to move forward with a reassessment from the candidates running for supervisor either. "It would cost $3 million that we don't have, it would be a very distracting thing right now," Republican nominee Bill Wilkinson said, adding that if elected, "It won't be a priority for me for the next few years."

Democratic nominee Ben Zwirn assigned a little more urgency to the subject, however he would pursue it "very, very carefully. It's a topic that has been largely ignored, but something that needs to be addressed," he continued, though he would only move forward under controlled conditions so as to mitigate the hardship that reassessment may cause to those on fixed incomes. While Zwirn was more supportive of the idea, his timetable was similar to Wilkinson's. "What I would like to propose in my first term is to start the discussions," Zwirn said, though he would move slowly and purposefully.