It’s true what they say about property taxes

I have long questioned conventional wisdom about property taxes, but an article in this morning’s Democrat and Chronicle and a little checking of my own shows I am wrong and the conventional wisdom is correct.

The conventional wisdom is that New York state has exceptionally high taxes, and the driving force is not so much state income and other taxes as it is local property taxes.  My question always was: Does this apply to where I live?  The bulk of New York’s population is in New York City and its suburbs, but upstate New York is so different as to be like a whole different state.

Our property tax rates are high in terms of assessed value, but my guess is our assessments are low compared to equivalent properties in places such as Boston and San Francisco.  The real estate bubble that inflated house prices in so much of the country largely bypassed my part of New York state, so I may well be paying less in taxes than places where tax rates are lower.

Unfortunately my speculation does not stand up to facts.  The data collected by the Tax Foundation does show a huge range in what New Yorkers pay in county property taxes.

In Westchester County, the affluent New York City suburb, median homeowners paid $9,004 last year in property taxes, which was 1.66 percent of the median $547,700 assessed value of their homes and 8.74 percent of their median $109,692 income.  In St. Lawrence County, in the rural North County, median homeowners paid $1,613 in property taxes, which was 2.01 percent of median $80,300 assessed value and 3.08 percent of $52,389 median income.

Even in St. Lawrence County, a relatively poor county, taxes were none too low compared to the United States as a whole.  The Tax Foundation reports that median U.S. homeowners paid $1.917 in property taxes last year, which was 1.04 percent of median $185,00 assessed value and, more to the point, 3.03 percent of median $63,369 income.

Here in Monroe County, median homeowners paid $3,891 in property taxes last year, which was 2.89 percent of median $134,500 assessed value and 5.86 percent of median $66,369 income.  That’s a lot.  Even though the assessed value of our property is below the national median and even though our income is only slightly above the national median, we still pay twice as much on average in property taxes.

My own tax burden is substantially less, so I don’t personally feel over-taxed, but I don’t criticize those who do. Still, for me, it is a question not just of costs, but of costs and benefits.  I would like to see taxes go down, but not at the expense of maintaining public roads, keeping parks and public libraries open and continuing to have good snowplowing service in the winter.

The most important thing about residential property taxes is that they fall most heavily on one segment of society, the middle class, just as payroll taxes fall most heavily on wage-earners, sales taxes on the poor and income taxes on the rich.  The long-range trend during the past 20 or 30 years has been an increase in property, payroll and sales taxes, together with a reduction in income taxes.

The Tax Foundation examined data on the 792 U.S. counties with populations exceeding 65,000.  The last county on the list was Apache County, Arizona, where homeowners were taxed an average of $135 a year out of $23,503 annual income on homes assessed at $84,400.

Click on Property Taxes on Owner-Occupied Housing by County in 2009 for the Tax Foundation data for all 792 counties.

Note: Shortly after I put up this post, I rewrote it correcting “average” to “median.”  They mean two different things.  “Average” residential property taxes in a county are the total paid in taxes divided by the number of taxpayers.  “Median” residential property taxes are the point that divides the upper and lower halves of taxpayers.  Unlike in Garrison Keillor’s Lake Wobegon, more than half of the taxpayers would be “below average.”

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2 Responses to “It’s true what they say about property taxes”

  1. Anita Says:

    Very interesting post. I’m a St. Lawrence County resident (thanks for picking us!), and am fascinated to see that we are below the national average in just about everything except property taxes.

    The second part of the question is a comparison of the services various areas get in exchange for those property taxes. We are accustomed to the services we have – are we getting more than folks who live in other areas where the property tax burden is smaller? If we are getting more, what specific services do our local governments offer that others do not?

    I suspect that part of the answer to that question may be Medicaid. NYS mandates counties to pay part of Medicaid costs, and that cost is going to be part of our County property taxes.


  2. Michael Polakoff Says:

    There’s a bit more to it … see:


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