April 12, 2011 -- The system of apportioning the county government’s property taxes across Westchester touches every property owner but it is understood by very few. This is not surprising, given it’s a system where, even when county government spending goes down, taxes can go up for some and down for others depending on where you live.
This system is front and center again now in April, when local cities and towns collect county taxes, based on tax bills they send on behalf of the county government.
The following was prepared by David Jackson, executive director of the Westchester County Tax Commission. It is an effort to explain the current county property tax system by answering some frequently asked questions.
Q. What is a tax levy and how is it determined?
A. A tax levy is the amount of money raised by property taxes. In Westchester there are 346 taxing districts that raise money through property taxation. They include the county, cities, towns, villages and school districts, as well as water, sewer, and other districts. The size of the levy, or the amount of money to be raised by the property tax, is the difference between what a municipality or district spends and all of their other sources of revenues, which could include sales tax, as well as state and federal aid.
For 2011, Westchester County government’s tax levy is $548 million, a reduction of about $12 million or 2.2 percent from the year before.
Q. Approximately how much does each taxing district contribute to a property owner’s overall bill?
A. The split in Westchester is roughly as follows; 17 percent goes to the county government, 18 percent to the local government(s), 63 percent to the school district and the remainder to other local districts like fire and sewer.
Q. How does the county apportion its tax levy among municipalities?
A. Each of the municipalities gets a bill equal to its share of the county’s full-value of property for tax purposes. For example, 10.46 percent of the county’s entire property value is in Yonkers, so Yonkers gets a bill equal to 10.46 percent of the county tax levy.
Q. How are county government taxes collected?
A. Westchester County sends tax bills, known as tax warrants, to its 6 cities and 19 towns. These municipalities then apportion the tax among their residents and businesses, based on local assessments. The city or town collects the money and sends it to the county. The cities and towns also collect taxes for schools and other districts, as well as themselves.
Q. How is the tax bill of individual property owners determined?
A. Local cities and towns assess the value of the property within their borders. They have the flexibility to assess property at different percentages of full value. In many cases, they have not completed a full community-wide reassessment in decades and this is where the answer starts to get complicated.
In Westchester for 2010, assessments, as a percentage of full value, ranged from 100 percent of full value, in the towns of Pelham and Rye, to 1.52 percent in Mount Pleasant.
To ensure fair “apples to apples” comparisons among communities that assess at different percentages of full value, the state typically confirms an “equalization rate” for each town and city. If a municipality assesses at full value each year, its equalization rate is 100 percent, as of the date used statewide. For those that assess at less than full value, the equalization rate typically shifts from year to year to capture the ups and downs in the real estate market and assessment changes, as of the same date.
Q. How is the equalization rate determined?
A. For residential homes, the state looks at a sampling of actual sales in a community to compute how property values have changed. For all other property, the state’s sampling includes sales, appraisals and other valuation data. The limitation of this approach is that accuracy of the rate is only as good as the data in the sampling.
Q. If the equalization rate is supposed to ensure that everyone pays their fair share, how can one municipality’s tax bill go up, and another’s go down?
A. The equalization rate does not determine whether a tax bill goes up or down. Its purpose is to be the vehicle to standardize assessments. The factors that determine whether the tax bill goes up or down are:
- the amount of money the government entity is spending,
- how much of the spending has to be paid for with property taxes, as opposed to other sources of revenues (e.g. sales tax, fees, state and federal aid) and savings (e.g. reserve funds),
- the value of the property against which the property taxes are assessed.
It is the third variable that creates situations where taxes can go up or down depending on where you live.
This year, the overall tax bill sent by the county to the municipalities to collect went down by $12 million. But, the total value of property in each of the municipalities changed. Some went up and some went down. So while it was good for everyone in the county that the tax levy went down, the amount of tax collected by municipalities and charged to individual property owners within the municipalities went up or down based on what percent of the county’s total property value a city or town represents in a given year.
Q. Can you give some examples?
A. Let’s look at Mount Kisco. This year, the county tax levy is $548 million and Mount Kisco accounts for about 1.03 percent of the county’s total property value, so its share of the tax levy is $5.6 million. Last year, the county tax levy was $12 million higher at $560 million. But, Mount Kisco accounted for a bit less of county property value. The percentage was 0.94 percent, bringing Mount Kisco’s share of the county tax levy to $5.2 million. So even though the county tax levy went down in 2011, Mount Kisco saw its county tax bill go up $400,000 or 8 percent because its share of county tax bill went up.
On the other hand, Mount Pleasant's share of total county property value dropped in 2011 to about 5.60 percent, from 5.88 percent in 2010. As a result, Mount Pleasant benefited not only from the drop in the levy but also from a drop in its share of the county’s total property value.
Q. Is anything being done to improve the current system?
A. The Westchester Collaborative Assessment Commission (WCAC) has completed a report that had input from members of the Westchester Municipal Officials Association, Westchester Assessors Association, myself and others. Hopefully, this report will lead to a solution that works best for Westchester. The report is being reviewed by the County Executive, the Board of Legislators and other officials. Read the WCAC Report and send any questions to about the report for a response from the WCAC.