Monday, November 15, 2010

Poughkeepsie Journal Still Reports Inaccurate Tax Rate Increases

This is the second of two posts commenting on the Poughkeepsie Journal's recent coverage of property tax issues.  The first post complimented the Journal for including tax rate increase information in headlines, lead sentences, and sidebars.  This one criticizes the Journal for consistently publishing wildly inaccurate tax rate increase information for jurisdictions with changing equalization rates.

Last year (August 2009 to early spring 2010), Poughkeepsie Journal property tax stories occasionally included tax rate increase data.  These stories contained inaccurate tax rate increases for some jurisdictions because of an analytical mistake.  This year (beginning August 2010), essentially every property tax story includes tax rate increase data.  Furthermore, this data is much more prominently displayed than it was last year.  It's great that readers are now much better informed about tax rate increases.  Unfortunately, last year's analytical mistake still has not been corrected, despite the new focus on tax rate increases.  This means that inaccurate tax rate increases are published more often — and more prominently — than last year.  And when I say inaccurate, I mean wildly inaccurate.  The published tax rate increases are much lower than the actual tax rate increases, leading readers to think that the tax situation is much better than it really is.  It's a shame that the Journal's greatly improved coverage of tax rates and tax rate increases is marred by inattention to the issue of accuracy.

The analytical mistake is to not account for changes in equalization rates.  My post last year described the mistake in detail, and how to fix it.  This mistake is manifest only for jurisdictions whose equalization rate changes in 2010.  I found five stories this season (since August 2010) with wildly inaccurate tax rate increase percentages.

Hyde Park School District

On August 27, 2010, a short, unsigned story entitled, "New school-tax rate adopted for Hyde Park" appeared on page B-1 of the print edition.  The lead sentence claimed that the Hyde Park school tax rate will increase “less than 1 percent”.  The brief article concludes by listing the tax rates — in dollars per thousand dollars of assessed value — for the 5 towns within the Hyde Park School District, together with purported tax rate increases in each town.  The listed tax rate increases ranged from 0.55 percent in Hyde Park to about 3 percent in the Towns of Clinton, Poughkeepsie, and Rhinebeck.  These listed tax rate increases are wildly inaccurate.  The tax rate increases in the article were apparently calculated by subtracting the 2009 tax rate from the 2010 tax rate, with both rates measured in dollars per thousand dollars of assessed value, and then saying that the result is somehow a percent, rather than a tax rate.

The correct tax rate increase is 19.31 percent for the portion of all 5 towns in the Hyde Park School District.  Not incidentally, New York State real property tax law requires the tax rates in all the municipal segments of a special district (like the Hyde Park School District) to be equal, when expressed in dollars per thousand dollars of market value.  This fact implies that the school tax rate increase will the same for all properties in the school district regardless of which Town they're in.

Arlington School District

On August 31, 2010, a front-page story was entitled, “Average Arlington tax bill to go up 7%”.  A sidebar listed 9 towns with portions in the Arlington School District, and their corresponding tax rates in dollars per thousand dollars of assessed value and tax rate increases.  Six of those 9 towns are at 100 percent equalization rate; for them, the published tax rate increases around 16 percent are correct.  For the 3 remaining towns, the published tax rate increases are as follows:  Hyde Park:  -1.5 percent; Pawling: 10 percent; Pleasant Valley:  2.1 percent.  These numbers are wildly incorrect.  The correct tax rate increase for these three towns is about 16 percent, the same as for the other 6 towns, as required by New York State law.  The math works out, once you convert from assessed value to market value.

Staatsburg Library District

A story entitled, “Staatsburg seeks library-tax hike”, appeared on September 9, 2010.  The lead sentence is, “Residents of the Staatsburg Library District are being asked today to approve a 13.7 percent tax-rate increase.”  Once again, this number is wildly incorrect.  The correct tax rate increase is 33.5 percent It's the same issue as in the above school districts:  Staatsburg, in the Town of Hyde Park, has seen its equalization rate increase 17.4 percent.  The story failed to take this fact into account.

Town of Hyde Park

Two stories about the Town of Hyde Park's budget appeared on October 13 and November 11, 2010.  These stories stated that the Town proposes to raise the tax rate by 17 percent and 14.5 percent, respectively.  My most recent post discusses this case in considerable detail, concluding that the Town of Hyde Park government does not understand how property tax increases work.  Their most recent claim of a 14.5 percent tax rate increase is really a whopping 32 percent tax rate increase.  So once again, the published tax rate increase is wildly incorrect.  Although the Poughkeepsie Journal got it wrong again, they surely had plenty of “help” in this case from the Town of Hyde Park.

Getting it Right

The  Journal's masthead proudly proclaims, “The Poughkeepsie Journal corrects errors of fact.”  Yet the Journal has continued to publish wildly inaccurate tax rate increases for jurisdictions with changing equalization rates, despite my blog post on the subject last year.  Admittedly, some of the blame belongs to the government of the Town of Hyde Park, which has provided copious inaccurate public information.  But the Journal has not yet made a serious attempt to avoid publishing tax rate increases that are just plain wrong.

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