Gordon Heights Fire District

Mirror, mirror on the wall;
Who's got the highest fire tax of all?

A small fire district with just one fire station claims to have the highest fire taxes in its county, and possibly the highest in New York State. Some property taxpayers are so incensed with the high fire taxes that they're circulating a petition to dissolve the district.

I must be talking about the Fairview Fire District in Dutchess County, right? Well, maybe. But I could just as well be talking about the Gordon Heights Fire District in the Town of Brookhaven, Suffolk County, Long Island.

Fairview and Gordon Heights can't both have the highest fire taxes in New York State — at least not in the same year. So which is higher, Fairview or Gordon Heights? We can answer this question by comparing the fire tax rates for Fairview and Gordon Heights in dollars per thousand dollars of market value (as explained in my last blog post):

Observations

1. The fire tax rates for Fairview and Gordon Heights have been in the same ballpark during the last six years.
2. In 2004—2007, Gordon Heights had a slightly higher rate than Fairview.
3. While Fairview's tax rate has stayed roughly constant in recent years, Gordon Heights' rate has been trending slightly downward. Thus, Fairview has taken the title of higher tax rate in the last two years.

Differences between Districts

Although the Fairview and Gordon Heights fire districts are similar in a number of ways, there are two important differences:

1. Fairview is staffed predominantly by career firefighters, whose salaries and benefits account for the major part of the fire department budget. Gordon Heights is an all volunteer fire district, for which this major budget expense is not needed. This fact makes the Gordon Heights high fire tax rate all the more surprising. But see next item:
   
2. The Gordon Heights fire district has been at the center of a continuing scandal involving extravagant and inappropriate expenditures. A recent audit of the Gordon Heights Fire District by the New York State Comptroller documented numerous instances of mismanagement of taxpayer dollars in 2006 and early 2007. In spite of this rebuke, abuses of the public trust by the Gordon Heights Fire District have apparently continued to the present day.

Summary

Fairview's fire taxes have been higher than those of Gordon Heights in the last two years, but not by much. If the Gordon Heights fire district were in Dutchess County, it would have the second highest fire tax rate in the county.

So does Fairview have the highest fire tax rate in New York State? The jury is still out. I'd be interested to analyze other fire districts which might compete for this title. Readers are encouraged to nominate candidates.

Fire Tax Rate

Fire tax rate — in dollars per thousand dollars of market value — plays a central role in understanding fire taxes. If you understand this key concept, you should know how to answer each of the following questions:

1. Owners of taxable property in the Fairview Fire District pay a lot in fire taxes. What does “a lot” really mean?
   
2. Our fire taxes are higher than in any other fire district in Dutchess County. What does “fire taxes are higher” really mean?
   
3. It has been said that Fairview's fire taxes may be the highest in New York State. At least one other fire district has made the same claim. How can we tell which district is right?
4. Properties in the Hyde Park and Poughkeepsie portions of the Fairview Fire District are taxed equitably in 2009. What does “taxed equitably” mean here?
   
5. A few months ago, Dutchess County Executive Bill Steinhaus announced that he would not increase (County) property taxes. What did he really mean by “not increase property taxes”? Did he mean that property owners would pay no more tax dollars than before?
   
6. Fairview fire taxes are said to have been increasing dramatically in recent years. In what sense is this true? In what sense is this not true?
   

The question that is central to all the above questions is, “How can we measure fire taxes in a way that lets us fairly and objectively compare fire taxes across different jurisdictions and/or different times?” Answer: Fire tax rate, as measured in dollars per thousand dollars of market value.

According to New York State real property tax law, fire taxes and other ad valorem (according to value) property taxes are proportional to the market value of the property. The fire tax rate in dollars per thousand dollars of market value is the proportionality constant. In other words, a property's fire tax in dollars is equal to the property's market value multiplied by the fire tax rate. This is considered a fair way of apportioning fire taxes among properties, because each property owner pays according to his property's value. For example, if property A has twice the market value of property B, then property A pays twice the tax of property B.

So, is this fire tax rate the number appearing on the property tax bill? Unfortunately, no. Tax bills show fire tax rate measured in dollars per thousand dollars of assessed value, not market value. The concepts of assessed value and equalization rate have been used historically to record tax data, but they play no role in understanding any of the above questions. Indeed, they have the opposite effect, and are the source of much confusion. Equalization rate is a fudge factor used to convert market value to assessed value. Similarly, the equalization rate converts fire tax rate in dollars per thousand dollars of assessed value to fire tax rate in dollars per thousand dollars of market value. This fudge factor and the assessed value have no intrinsic meaning, and only confound any attempt to analyze the above questions. That's why it's necessary to convert all data from assessed value units to market value units before any meaningful comparisons can be made. Only if the equalization rate is 100 percent (which New York State is encouraging all towns to adopt), does assessed value equal market value.

Here's how the concept of fire tax rate — as measured in dollars per thousand dollars of market value — can be used to make sense of the above questions:

1. “a lot” means a high fire tax rate.
2. “fire taxes are higher” means that the fire tax rate is higher.
3. Compare the fire tax rates of the two districts.
   
4. “taxed equitably” means that the fire tax rates are equal.
   
5. By “not increase property taxes”, Steinhaus meant that he would not increase the property tax rate. Property owners would still pay more taxes than in the previous year if the market values of their properties increased from the previous year.
6. Fairview fire taxes have been increasing dramatically in recent years only in the sense that the number of tax dollars paid by each property owner has been increasing. However, this increase is due entirely to increases in property market values, which have doubled in this decade. Fairview's fire tax rate — which gives a fair measure of the size of the taxes — has not increased at all this decade (except for a small increase in 2008). In fact, the trend this decade has actually been slightly downward.

This last answer should not be taken to mean that Fairview's fire taxes are not high. On the contrary, it should be taken to mean that they've been high for a long time. To illustrate, note the trend of Fairview's market value:


By comparison, Fairview's fire tax rate is trending downward:


Thus, rather than complaining that Fairview fire taxes are increasing, it may be more accurate to congratulate yourself that your property value is increasing.

Summary

The purpose of this post has been to explain the key role that fire tax rate in dollars per thousand dollars of market value (not assessed value) plays in understanding fire taxes. The Fairview Fire District is mentioned only because it's a familiar example. For additional discussion about fire tax rates, see pages 3—7 of Document #5 on my Fairview Fire Tax website. The above charts are from Document #7.

Introduction to this Blog

Residents and property taxpayers in the Fairview Fire District of Dutchess County, New York, have been angry for many years — many decades, actually — over unusually high fire taxes. At the same time, shortages of both volunteers and money have challenged the Fairview Fire Department to maintain desired level of service in fire and emergency medical responses. Although my wife and I have lived in Fairview for twenty years, we only got involved in fire tax issues a year ago, as described on my companion Fairview Fire Tax website.

I began the Fairview Fire Tax website in June, 2008, because I perceived that there was a dearth of verifiable facts about Fairview's problem. As I began to investigate the issues, I found that the void in understanding was filled with much misinformation. For example, it was widely believed that the reason for Fairview's high fire taxes is that 80 percent of Fairview's market value is tax exempt. My first report showed that the figure was actually only 42 percent for 2008, and not much different in other recent years. See Document #1 at Fairview Fire Tax. So although 42 percent is still high, it's not high enough to explain more than a portion of Fairview's high fire tax. (See Document #12 at Fairview Fire Tax.)

In September and October of 2008, I posted a series of documents showing an unexpected aspect of Fairview's fire tax situation: An apportionment mistake by the Fairview Fire District in violation of New York State real property tax law caused Hyde Park property owners to pay more than their fair share of fire taxes in 2008. The beneficiaries of this mistake were the Poughkeepsie property owners in Fairview, who paid less than their fair share. Other apportionment mistakes, some benefiting Hyde Park over Poughkeepsie, occurred almost every year since 2001. As a result of my investigation, these mistakes are no longer occurring, beginning with 2009. See Document #5 through Document #10 at Fairview Fire Tax.

With these Fairview-specific issues out of the way, it was time to expand my view to fire taxes in all of Dutchess County. (In reality, this is the first thing I looked at, but the last thing I published.) I verified that Fairview has the highest fire tax rate in Dutchess County. In talking with many informed local officials, I found a consensus developing that the most promising long-term solution to Fairview's problems is to consolidate Fairview with other local fire districts. Document #11 at Fairview Fire Tax compares the fire tax rates for all fire districts in Dutchess County, and shows how they might be affected by county-wide consolidation.

Subscribe for Updates to Fairview Fire Tax Website

My plan is to use this blog for relatively short posts on fire tax issues which may be of interest to property taxpayers, residents, and officials of Dutchess County. I'll also post here to announce major updates to my Fairview Fire Tax website. Thus, readers can learn of updates to my Fairview Fire Tax website by subscribing to posts.