Councilor: It’s time to fix Syracuse’s inequitable property tax system (Guest Opinion)

Assessment changes

Syracuse will not make real progress until we confront inequality in our city. Our highly regressive property tax assessments are perhaps the clearest example of systemic inequality in Syracuse.

Syracuse has not conducted a full property tax reassessment in over 25 years. The result, as detailed by an investigation by Post-Standard, is that property owners in poorer neighborhoods pay an effective property tax rate that is considerably higher than their wealthier neighbors. This system exacerbates wealth inequality in the city, and reinforces racial and economic segregation.

Fortunately, unlike many problems related to racial and economic inequality, this problem has a clear and straightforward administrative solution. City Hall just needs the political courage to require affluent homeowners pay their fair share.

While residents across the city are taxed at the same rate, given inaccurate property assessments, the effective tax rate — the annual amount paid in property taxes divided by the actual market value, as opposed to the assessed value of the property — is staggeringly regressive.

Researchers at The Harris School of Public Policy at the University of Chicago have produced hundreds of reports on property tax inequity in municipalities across the country, including a report on assessments in Onondaga County that includes data on several (but not all) census tracts in the city of Syracuse.

On average, property owners in Westcott (census tract 50) pay an effective tax rate of about 1.8%. Meanwhile, in the adjacent Brighton neighborhood (tracts 58 and 54) the effective rates are 3.8% and 3.5%.

These inequitable tax rates map onto racial and economic inequalities. The Westcott neighborhood is 83% white, with per capita income over $33,000. The Brighton neighborhood south of us is less than 10% white with a per capita income below $13,000.

In sum, property owners in Brighton pay an effective tax rate that is twice as high as their more advantaged Westcott neighbors. Since landlords factor the cost of property taxes when determining what to charge tenants, these over-assessments burden South Side and Brighton owners and renters alike.

While the 2019 investigative report by the Post Standard describes the problem of property tax inequity in detail, more recently a New York Times editorial identified Syracuse as a particularly egregious case of a national phenomenon.

As the Post-Standard article details, the city of Syracuse last conducted a comprehensive citywide reassessment of properties in 1996. Over the last quarter century, the real value of properties in wealthier neighborhoods increased considerably, while property values in other neighborhoods of our increasingly segregated city stagnated or declined.

City reassessments did not come close to keeping pace with these changes. Since the city only reassesses 1,500 to 3,000 properties annually, properties generally retain the same assessment for well over a decade, which benefits owners whose real market property value has an upward trajectory. Moreover, the New York Times editorial notes that when properties are reassessed, more affluent homeowners are more likely to successfully appeal.

In response to the Post-Standard report in 2019, Mayor Ben Walsh acknowledged that tax inequity is a problem and promised to do better. Unfortunately, the city introduced a tepid plan that merely tinkered around the edges without fixing the problem.

This year will mark my first year serving as the chair of the Council’s Finance Committee. I intend to use this new position to propose a budget amendment that will add $2 million to the 2021-22 city budget to begin a comprehensive property reassessment.

A comprehensive property reassessment will not generate more revenue, as increased revenue from high-value property owners will be offset by decreases from lower-valued properties. In fact, in Nassau County, N.Y., 61 percent of property owners received a reduction in assessed value as a result of comprehensive reassessment.

Rather, systematic property reassessment can make Syracuse a fairer city. It is unconscionable that — in one of the most racially unequal and segregated cities in America — we are imposing a higher effective tax rate on people of color and lower-income residents.

Systemic inequality is a crisis in Syracuse. It’s well past time for City Hall to take action to address it.

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