Tax House Repossession Dispute in New York Cities and County
A dispute is brewing over Chautauqua County in New York’s 1996 tax house repossession agreement in which it repays the cities of Dunkirk and Jamestown for unpaid property tax.
In exchange for paying property taxes, the county assumes the responsibility for tax foreclosure process in the two cities, repossessing delinquent homes and selling them at auctions to recover losses.
The county’s arrangement with Dunkirk and Jamestown are the same with all the towns and villages under it. It has always been assumed that residents in the county’s towns and villages are subsidizing Dunkirk and Jamestown and that they would be having lower tax rates if it were not for these two cities and their expensive services.
This kind of tax agreement between the county and cities has been going on since 1996. Lately however, tax foreclosure auctions have failed to generate enough funds to cover what is being paid out to Dunkirk and Jamestown annually.
Some industry experts said that the failure of tax foreclosure auctions to generate enough money is due to the over-assessment of foreclosed properties. Some believed that Chautauqua County is paying Dunkirk and Jamestown more than it should for the foreclosed homes. Meanwhile, there are others who said that the county is lacking in effort to maintain those foreclosure properties, market and sell them.
Under the agreement, both cities and Chautauqua County should share any loss that may be incurred, but that has not happened. It was only this year that the county started to bill Dunkirk and Jamestown for losses at last year’s tax foreclosure. Jamestown incurred a total loss of $572,976, while Dunkirk’s amounted to around $351,778.
Legislator James Caflisch has threatened to take the issue to the court if a vote will not be made by his colleagues to end the agreement, unless both cities agreed to pay back what they owe to the county.
Caflisch believed that the tax rate in the county would be as low as $1 if it were not for the 1996 agreement. He added that ending the agreement would save his constituents a lot of money and would increase property taxes in Dunkirk and Jamestown because both cities would be forced to set aside some funds for a reserve account.
He introduced a bill that would terminate the tax house repossession agreement before it could be renewed on June 1 of this year.
