New Haven Independent

Silverman: “Don’t Panic…”

by Staff | December 6, 2006 8:03 AM | Permalink | Comments (6)

But do think about “harsh reality,” about hard choices facing the city this coming year. That’s the message from Westville Alderwoman Ina Silverman to homeowners who are freaking out over the leap in their tax assessments. Silverman e-mailed constituents a detailed look at the numbers and the process for coming up with new tax bills. Read her message and see what people shouldn’t (and perhaps should) worry about when it comes to taxes, and what they can do about it. Not just in Westville, but all over town.

Following is the text of Silverman’s constituent e-mail newsletter message:

* * * *

The state-requires us to do a revaluation (“reval”) of property every five years. The tax on your home equals the mill rate times the assessment. The assessment is 70% of what the city thinks is the fair market value of your property. That 70% figure is set by the state.

When assessments go up, the mill rate usually goes down. Theoretically, taxes would stay the same. Taxes donÂ¹t stay the same for everyone because there have been changes in property values across the city, so particular properties and neighborhoods see tax increases or decreases, depending on whether values as indicated by recent sale prices, have gone up or down. Those differences are independent of budget issues. The assessment changes the apportionment of taxes to property owners, and in that respect, this neighborhood overall is slightly better off than the rest of the city.

Our area saw a median increase in assessments for condos of 85% and 71% for one family homes. It was 94% for two family homes and 102% for three family homes. Across the city, overall residential assessments rose 88%. Commercial property had an overall increase of 53%. This is like saying that the fair market values increased by that much since the last reval in 2001.

The cityÂ¹s statistics show that the newly established market values are consistent with actual sale prices over the last year. Anecdotal evidence from people who contacted me shows that their city-assigned fair market values were actually lower than what they think the true fair market value is, or what their bank thought when they recently refinanced. This confirms the cityÂ¹s intent to take a conservative approach to sales figures.

People who really can’t afford the taxes have always been able to file for a tax deferral (“abatement”), where the money due the city accumulates and is paid from the proceeds of the sale of the house whenever it is sold. Very few people take advantage of this because they have to prove inability to pay with tax returns and other documents. I am working on other options for seniors now, and the reval increases are expected to be phased in for all homeowners. What the phase in looks like will be worked out in the coming weeks, but right now it seems most likely that residential assessments will be phased in in equal installments over five years. That is the most beneficial method for most residential property owners in the city.

So don’t panic. Your new assessment is fair if what the city thinks is your fair market value agrees with what it really is. Your taxes will not double though your assessment might have!

A brief look at city-wide numbers shows that some our poorest areas saw the highest increases in assessments. Fair Haven and Newhallville did not have high increases in value in the 2001 reval, and saw more dramatic increases this time. Property values in East Rock saw huge increases in the 2001 reval so there wasnÂ¹t as high a jump this time

Regarding the mill rate, if the assessments are phased in over five years, the mill rate will not drop a lot next year because the total drop would be apportioned over five years. To figure out VERY ballpark tax numbers: subtract your old assessment from the new assessment. Divide that number by five. The resulting amount plus the old assessment would be the assessment for the first year after reval (fiscal year 07-08). Then multiply the number by, say, 40 mills or 0.04. As I said, that is just a very rough estimate since we wonÂ¹t know the mill rate until the conclusion of budget season in the spring.

If you feel your house is valued at more than equivalent homes in the same area, you have until December 4 to make an appointment for an informal hearing by calling 888-844-4300. There are lots of dates and times still available because only about a third of the expected number of hearings have actually been scheduled. (That might mean that people generally think the new assessments are fair.) Be prepared to show the hearing officers that the city’s numbers are wrong. Information on all city parcels is available at visionappraisal.com. (Then click on Online Database Access on the right side, Connecticut, New Haven, and sign in to gain access to the database.)

This is not to say that taxes won’t go up in the next fiscal year, but I have certainly been a voice of reason on the Finance Committee in budget matters, and I am asking everyone to be thinking over the next few months about exactly what services you want the city to provide that you are willing to pay for. The harsh reality is that municipalities cannot go forward much longer providing all the services they are now providing given the expected decreases in state and federal aid. And most municipalities don’t have to deal with the fact that almost half our property is tax-exempt. We do get some reimbursement from the state as PILOT (payment in lieu of taxes) for these properties, but the reimbursement is significantly less than the taxes would be, and reimbursement rates are set at the whim of the state legislature, which means they can be cut at will.

Finally, please note that this is general information and that each property may be impacted differently.

Apologies for the length, but I hope it is helpful.

-Ina

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Comments

Posted by: Cedar Hill Resident | December 6, 2006 9:23 AM

They did raise the value high in the poorest areas. Hmmm makes you wonder are they trying to push people out??? I am heated over this. Our Alderman sent out a letter to my area as well. We in the Cedar Hill Area are going to see an increase If you basis it on a guestamite of a mill rate of .28, we will be see an increases of on average $100.00 a month! This is one of the poorest areas of town!! I have a problem with this!!! My Assessment did not double it tripled! The areas assessment were based on the Sale of 3 houses that got top dollar the thing about my area is that there are 2 really large houses that sold for a crazy amounts one was worth it it is an historical home the other was bought by a guy trying to develope the property for multiple family housing so he paid more and bought the lot on the side as well.( which we will fight!!). The crime is bad, which affects the sale value of the house on the surrounding streets. This was not factored into our areas appraisals. I know several people on my street went to the appointments and now we have to wait till January to see what the out come is. I am sorry but you can not appraise a house for top dollar when drugs and prostitutes affect the value of the home but that is not factored into the equation! Sorry mad and fighting!! In Ct I have that they are suppose to do a physical inspection every 10 years! I know this was not done the last time?? You can not base my house that needs a lot of work at the same right that some one that redid there interior over mine will not get the same FAIR MARKET VALUE!

Posted by: ROBN | December 6, 2006 1:09 PM

If, as our mayor has stated so often, New Haven vacancies have gone down and apartment buildings downtown are full, shouldn't that have dramatically increased tax revenues for the city? If so, what has the city done with the increased revenue?

Regarding the PILOT program, this is the States way to make a compromise between the the Yale Corporation, who doesn't pay their fair share, and the City, whose residents have always been anxious for Yale to pay its fair share. That the state arbitrarily controls a large portion of our budget through this tax-proxy is an affront to our independence and an insult to the notion of self-determination.

Posted by: Cedar Hill Resident | December 6, 2006 4:58 PM

I sorry someone corrected me my incress is 200.00a month more. I am a single mother I own a half a duplex and I will be paying 5000.00 a year in taxes??? Not a whole house a half a house!!

Posted by: Joe | December 6, 2006 9:01 PM

There is no conspiracy theory at work here. Values are controlled by the MARKET, not the city (this is a process your Alderman has NO LEGAL CONTROL over, nor should he/she). The real estate boom hit less-poor parts of the city at the last reassessment. Now, neighborhoods such as Fair Haven, Newhallville, etc are catching up, and have seen sales prices more than double (again, due to MARKET forces). The re-assessment formula used by the independent firm (the same formula as used everywhere else in CT) simply determines the average statistical value increase, based on an average of recent home-sales in a neighborhood. It then applies this average value increase to your home. Finally, the tax rate will be lowered to compensate for your increased assessment; re-read Ald. Silverman's post and you will see that she points out your tax bill will go up, but probably only a small %.

Posted by: Cedar Hill Resident | December 7, 2006 8:38 AM

Joe you state that they are basing it on recent sales in the area but as in many city around the country the values of home in some bad areas differ from street to street not just areas. It has been shown that some differences can be between 30 to 60 % difference, due to the crime level on those streets. Now on my street I have drug dealers and prostitutes on a good part of my street every night and we do chase them away as do 4 other street around me, but the market value of my area is being based on the sale of houses on one street that has no drug activity that is where most of the sales in the year that they are basing it on sold. Not on the 2 family house that sold for 70,000 less than my half a house is valued for on Cedar Hill Ave. The whole idea of assessment is FAIR MARKET VALUE. The key word is FAIR. They have my unit down that I can sell it for 40,000 more than I know I can get. I have tried. The last one of my units; the same size as mine, sold for 36,000 dollars less than what the are being assest for right now and that was a unit in alot better shape than mine. Why should I pay taxes on an amount that does not come close to what I can get rid of the property for. I am not saying conspiracy, but that it had crossed my mind, but I am saying that people from RI that do not know the city can not properly asses us if they do not know the communities and the problems. The area and its crime level is a incurable problem that does affect the value of a property. When driving down State Street into my area especially when the weather is warmer there is no dought that this is a high crime area. Not to metion that in the past 7 months the market in CT has droped 20% and our assesments are being based on the highest market value in years.

Posted by: Joe | December 7, 2006 12:10 PM

Thanks for the response. I understand your point, and if it's really the case that you're overassessed, I believe you have the option to file an appeal. I was more trying to point out that "fair market value" is a tag that gets put on our property over which we and our elected officials have little control. In my own case, where my Fair Haven home went up a little over 100% in value, my worry would be that appeal might cause my value to be assessed even a little higherhigher, since then all the specific improvements I've made would be taken into consideration as well (I'm not totally sure how this works... anyone out there know if an appeal can lead to a _higher_ assessment?).

Silverman: “Don’t Panic…”

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