Allegany property tax rate among highest in U.S. as county legislators sit on tens of millions

EXCLUSIVE: Allegany County’s property tax rate is the second or third highest in the United States by one measure as county legislators continue to put away millions – over 160 percent more last year than was levied against taxpayers.

An Allegany County Hope Community News compilation from different data sources appears clear that Allegany County legislators continue to levy the second highest property tax rate in New York State, based on true value, and the third highest general sales tax of all counties, with county local governments in total also creating the second highest tax rate in the state, in addition to the high ranking nationally.

A little less clear is just how high the reported effective property tax rate, based on median property taxes paid divided by median home values, is this year in the nation.

As reported by two national companies focused on property tax data and real estate investments, Allegany County, in 2020, was second in the nation and, in 2021, was third or tied for second, depending on calculations.

For last year, the numbers are somewhat vague as the county appears to have moved down somewhat on the scale due to escalating property values and the full national list not being readily available. In addition, many counties, particularly in the Midwest, aren’t listed, apparently due to size of tax numbers.

High surpluses result in high taxes
As Allegany Hope Community News has reported for several years, county lawmakers have continued to keep property taxes high by maintaining surpluses in the general range of an entire year’s total county tax levy, approximately $30 million annually.

As a result, they are able to reduce the true value tax rate slightly each year, although property owners in one-third of Allegany County towns actually received a property tax hike this year over last due to equalization rates.

County Treasurer Terri Ross said two-and-a-half years ago, at a meeting of county legislators, that there was some $11 million available, after allowances for cash flow, for legislators to “play with”.

Surplus funds diverted
In 2020, lawmakers, after stories by Allegany Hope Community News highlighted the issue, set aside $7.5 million in an economic development reserve fund to lower the fund balance, without any specific plan for expenditures and with a minimal amount having been appropriated to date from the fund.

However, at the end of 2021, the county had brought the unappropriated surplus back up to nearly $32.8 million, according to the county’s report to the state comptroller, primarily due to revenues exceeding that which had been budgeted.

In 2021, for example, the county estimated sales tax receipts of $21.8 million but received some $26.7 million. Last year, it increased the number to $23.5 million, or $3.2 million less than received the year before, and took in $28.7 million.

For this year, legislators have estimated receipt of $25.5 million, another $3.2 million less than received the year before and $1.2 million less than realized two years previously.

Last year, according to the same report to the comptroller, the surplus skyrocketed to nearly $48.8 million, a jump of some $16 million, or a nearly 50 percent surge.

The new total is equal to Allegany County having been able to eliminate all county-levied property taxes for a one-year period, if it had chosen, and still having more than $19 million left over for cash flow purposes.

Second highest in nation
On a California-based Norada Real Estate Investments list for 2020, Allegany is listed behind Orleans County, N.Y., as having the third highest effective property tax rate in the county, although the ratings, at 3.2 percent, are the same.

Norada notes, however, that the U.S. Census American Community Survey from 2020 doesn’t provide the specific median for any property taxes over $10,000 in a county.

In the meantime, ATTOM, a national property data provider, is reporting that Allegany County was at a higher rate of 3.48 percent in 2020, with the same number being used by the New York organization, Tax My Property Fairly, to calculate a clear second place standing nationally, with Oswego County, N.Y., coming in fourth at 3.32 percent.

A year later, in 2021, ATTOM reported Allegany County at a 3.11 percent effective property tax rate on an estimated average property value of $84,661. This was based on an increase in estimated average property values of 4.29 percent.

Last year, the average value jumped 16.4 percent, to $102,810, according to the data firm, resulting in the tax percentage dropping to 2.11 percent.

We have requested additional detail from ATTOM for comparison purposes.

High taxes not new
Highest level property tax rates in Allegany County aren’t a new phenomena.

Cable news CNN Money has reported the average annual property tax burdens as a percentage of home prices averaged 3.01 percent in the county between 2007 and 2011.

Allegany’s true value, equalized tax rate has been the second highest in the state since 2019, when it was replaced for top spot by Cortland County.

The New York State Tax Department, based on State Comptroller numbers, also reports that the county has been second from the top in combined full value property taxes, including county, town, village, and school and special districts, since 2019, when it changed places with Broome County. Cortland County is third in that category.

Third highest sales tax rate
Allegany, at 8.5 percent, also has the third highest general sales tax rate in the state, behind Erie and Oneida, both at 8.75 percent, four percent of which goes to the state.

The rate has been in existence since 2004 under special state legislation which enables it to add 1.5 percent to the base rate of three percent allowed automatically by law.

In May, county lawmakers made a third successful attempt to approve local legislation asking local state legislators to approve a home rule measure to extend the 1.5 percent, which expires in November, for another two years due to fiscal “necessity.”

Legislator Gary Barnes of Wellsville voted against the measure, having said previously that he feels the county should be weaning itself off the additional sales tax rate, with Legislator James Rumfelt previously having done the same, telling Allegany Hope Community News that constituents had brought up the high sales tax rate when he was running for office.

State approval of the extension is pending.

Law requires reasonable surpluses
By law, county legislators only are able to maintain “reasonable” surplus funds, the amount of which isn’t specified. School districts, by law, only are allowed to retain four percent of appropriations in surplus.

The State Comptroller’s office has been issuing audits citing local taxing units for retention of high levels of surplus in reserve funds, including one for the Olean School District last week in which it said that “funding reserves at levels higher than necessary for operations and/or need creates an undue burden on taxpayers and withholds funds that may have been used in a more beneficial way.”

The county is just starting its budget process for next year.

Various reports on tax rates include:
– Norada Real Estate Investments: https://bit.ly/3PEhFO2
– ATTOM Data: https://bit.ly/46l50FR.
– Tax My Property Fairly: https://bit.ly/43WIcdP
– CNN Money: https://bit.ly/43X2hAF
– New York State Tax Department: https://bit.ly/3NLnDvo
– New York State Comptroller: https://bit.ly/3VhDH9I