When the town of Minden announced it was reassessing its property values, residents were concerned about the possibility of an increase in their taxes.

According to figures released by the Tax Foundation, those fears about taxes are justified as Montgomery County is tied for second in the country for homeowners paying the highest property taxes as a percentage of their entire home value from 2005 to 2007.

Montgomery County is tied with three other counties from New York for second place as the homeowners pay an average of 2.9 percent of their property value in property taxes. Orleans County, located west of Rochester, is the highest with homeowners paying an average of 3 percent of their property values.

Overall, 21 of the top 22 most heavily taxed property owners come from New York.

Fulton County is locked in a five-way tie for 14th place with property owners paying 2.5 percent of their property values in property taxes.

Hamilton County isn't on the list because of its low population. All other neighboring counties that share borders with Fulton and Montgomery counties have lower property tax burdens on their residents.

Schoharie county residents paid an average of 1.7 percent of their property values in taxes from 2005 to 2007, while Otsego and Saratoga county residents paid 1.4 percent. The closest to Fulton and Montgomery Counties was Schenectady County, which saw its residents pay 2.4 percent of their property values.

So why do Montgomery and Fulton County residents pay such a high amount of their property values in a taxes?

"The biggest thing is that 85 percent of the budget is state mandates that don't have any funding with them," said James Callery, the chairman of the Fulton County Board of Supervisors Finance Committee. "We've got quite a liberal state with the biggest Medicaid program in the country and unfortunately, too many people moved into New York state to get benefits that other states don't offer."

During the three years, the median home value in Montgomery County was $87,900, and the median property tax bill was $2,514. In Fulton County, the median home value was slightly less than that, $86,700, with Fulton County property owners paying a median of $2,145 in property taxes.

On the county level, Callery said Fulton County has lowered the tax rate, but school taxes, which also have a high number of unfunded mandates, continue to rise. Last year, Montgomery County passed a 2009 budget with a 2.9 percent tax decrease.

Montgomery County is ranked 71st in the country as residents pay 4.8 percent of their income in property taxes, while Fulton County is further down on the list with residents paying 4.6 percent of their income, with a rank of 104.

The two-county median 2007 income is well below the state average of $53,448, according to data released by the U.S. Census Bureau. Montgomery County residents made a median household income of $41,869 and Fulton County's median household income was $40,259.

With so many New York counties near the top of the tax foundation's list, it's also a state issue. A report released by the New York State Commission on Property Tax Relief said the state has the highest local taxes in the country, 78 percent above the national average. The report also said high property taxes have the most negative impact on low and moderate income working families, senior citizens on fixed incomes and small-business owners, who shoulder the burden regardless of their ability to pay.

According to census data, estimates place Montgomery County with 17.3 percent of the population made up of people 65 and older, more than four percentage points above the state average. Fulton County has 15.5 percent of its population made up of senior citizens.

"With the baby boomers having to live in Fulton County, they receive a lot more benefits," Callery said. "That's great, but we have to find away to get industry to bring in the younger people and build homes."

In 2007, nearly 16 percent of the Fulton County population was below the poverty level. About 13.8 percent of people in the state live below the poverty level. Montgomery County was below the state percentage at 11 percent.

The next highest is New Jersey, but the neighboring state's residents only pay 18 percent above the national average in property taxes.

"It's not typical to New York alone, but certainly the Northeast has an overabundance of government," Chairman of the Montgomery County Board of Supervisors Finance Committee William Strevy said. "We're over-governmentalized and under-capitalized as far as I'm concerned. I would like to see government get smaller, but I am of a minority."

The report also said the property tax rates are highest in upstate New York due to low property values and a declining population.

In Montgomery County, only the town of Minden has been assessed at full-market value. Gloversville and the town of Bleecker are at full-market value in Fulton County. All the rest have equalization rates below 100 percent, which means that most municipalities in the two-county area are not being assessed at full-market value.

"We need to keep up the equalization rates, and that's why the city of Johnstown is going to reval," Callery said. "If everybody is paying 100 percent, it's lower for everybody."

Callery said he believes New York should do what California does for property value assessments.

"It's the only thing they do right," Callery said. "What you pay for the property is what you're assessed at."

A declining population has plagued Montgomery County over the past eight years. According to figures released by the U.S. Census Bureau, 48,679 people are estimated to live in Montgomery County, a 2.1 percent drop from 49,708 in 2000.

"It certainly doesn't help," Strevy said. "Some of the towns are picking up population, while overall the county is declining."

They're not going to Fulton County, which has held steady, losing only 0.1 percent of its population over an eight-year span.

However, Strevy said he read a report that the population numbers in Montgomery County are starting to swing in the other direction.

"I hope that's the case," he said. "Until the housing bust, we thought there were much better days ahead and things were moving ahead quite swiftly. Better days will come, but unfortunately it's going to take some time to heal."

Mike Zummo covers Montgomery County news. He can be reached by e-mail at montco@leaderherald.com.