Modified: November 1, 2016 1:05pm
Today Erie County Executive Mark C. Poloncarz issued the following statement in response to inflammatory and incorrect accusations leveled by the Office of the Erie County Comptroller regarding the County’s property tax cap and compliance therein. This morning, the Comptroller’s office chose to overlook or not understand several key pieces of information in presenting a non-factual and misleading narrative about the true composition of the county sewer property tax levy and user fees.
Poloncarz statement: “Unfortunately, as usual, the comptroller is grandstanding and is wrong on the law and the facts. In his rush to attack me, the comptroller failed to note that independent boards of managers for the various sewer districts approve the property tax levies and user fees charged in each district, including one sewer board, ECSD No. 3, which is led by Erie County Legislature Chairman John Mills. Indeed, Legislator Mills voted for this change in June 2016 and ECSD No. 3 is now being re-classified in this way for the 2017 budget. It must be noted that in 2015 and again in 2016, these sewer boards approved of processes in which the sewer levies in sewer districts 1, 4 and 5 and then sewer districts 3 (Mills’ district) and 8 were reduced and the revenue changed to a user fee line. Further, the County consulted outside legal counsel to determine and verify that such changes were legal and allowable under state law.
These districts made these changes working in conjunction with the County, in order to help the County attain additional room under the state’s property tax cap law and to receive the maximum allowable benefit to County residents from the growth in our property tax assessment.
The sewer charges that were re-classified from the levy to fees are for the use of the system. Within the sewer districts, only those that are connected to the system are charged the fees. That is not the case for the assessed valuation charges included as part of the sewer property tax levy. For example, all properties including those that are vacant are levied assessed valuation charges.
The fees are assessed to account for the use of the system. For example, residential properties are assessed one usage fee, two-unit properties are assessed two fees, and so on. Furthermore, non-residential properties are assessed one unit fee plus their water usage above 91,250 gallons. 91,250 gallons (the equivalent of 250 gallons per day) is the basis on the usage fee.
Under state law, fees that are imposed by a special district are not subject to the property tax cap since they are not taxes. A key distinction between a fee and a property tax is that a tax is imposed based on the assessed value of the property, whereas a fee is typically imposed uniformly on each property in the district, or according to service usage by each property (as measured by water meters, for example), or has a rate differential based on the type of property. Other counties such as Monroe and Onondaga and localities have shifted some revenue in recent years from their property tax levy to user fees.
Under the taxpayers bill of rights, the change in the levy in the total budget is reported from year to year, which means that in some of the county comptroller’s sampled property tax bills, the line items across the tax bill went down 60%, but with the balance now being part of user fees.
These changes were unanimously approved by the County Legislature in December 2015 for the 2016 Budget, and neither the Legislature nor the comptroller’s office objected. In early 2016, the Office of the State Comptroller inquired about the change with the County’s Division of Budget and Management and that office explained the changes. The County has proposed a similar process for sewer districts 3 and 8 within the 2017 Erie County Budget.
This entirely legal budgetary action, in addition to being approved by the bodies mentioned above, enables Erie County to stay under the tax cap and has resulted in residents receiving state rebate checks. As the former Erie County comptroller it pains me to say it but a blank piece of paper has more substance on it than a report issued by this county comptroller. This is not the first time that this comptroller has published faulty and factually inaccurate statements and comments about County finances. To use terms like ‘smoke and mirrors’ and ‘an utter lie’ when describing the budget is irresponsible, misleading, and false.
In adopting the change, the County reviewed guidance provided by the office of the State Comptroller (see https://www.osc.state.ny.us/localgov/realprop/pdf/faqs.pdf). That state guidance noted that user fees are not taxes subject to the levy limit and in limited circumstances a user fee also may be properly based on units, which is the case here.
I believe that the county comptroller’s office misunderstands the tax bills and the way in which the levy and user fees appear. If they had simply contacted the County Department of Real Property Tax Services, Division of Sewerage Management, or Division of Budget and Management to pose their questions and make inquiries, staff would have provided the accurate answers and information. But once again, the comptroller jumped to conclusions and made public statements without full command of the facts. He owes me, the hard working men and women of my administration, and the people of Erie County an apology for his scurrilous and meritless claims.”