Monday, August 24, 2009

Fire Tax Revenue from Pendell Commons

Note to flamers: This post is not intended to be an argument for or against the Pendell Commons proposal. My purpose is only to provide a simple fire tax analysis. I have not taken a position for or against Pendell Commons.

Pendell Commons is a proposed $10 million housing project to be built in the Fairview Fire District (FFD). Many residents have raised objections to this proposal based on a variety of issues, especially those related to the already-overburdened and over-taxed FFD. It has been argued that Pendell Commons would increase the pressure to add staffing to FFD. Less attention seems to have been paid (no pun intended) to the additional revenue such a project would bring to Fairview.

Revenue Analysis

Here's a simple back-of-the-envelope revenue analysis: The fire tax rate in Fairview is approximately $5 per thousand dollars of market value, and has been so for many years. The Pendell Commons project can be assumed to increase the market value of the Pendell Road parcel by about $10 million. Multiplying these two numbers together shows that if Pendell Commons were built — and it stays entirely on the tax rolls — approximately $50,000 in fire taxes would be added to FFD coffers each year.

It has been reported that Kearney Realty & Development, the company proposing Pendell Commons, would donate $50,000 to FFD “to help defray costs”. Assuming this is a one-time donation in addition to fire taxes, we can conclude that FFD would see $100,000 increased revenue the first year, and $50,000 each year after that.

Additional Firefighter?

The budgetary cost of a full-time professional firefighter in Fairview is approximately $120,000 per year. Thus, if Pendell Commons is built and stays entirely on the tax rolls, it could pay for most of one additional full-time professional firefighter the first year, and could pay for nearly half of a full-time professional firefighter in succeeding years. This would be in addition to the current 18 full-time professional firefighters in Fairview.


  1. Poughkeepsie Journal Letter to the Editor - Nov. 22, 2009 - Pendell Commons assessment will be based on the net income of the property. Thus, with low rents and high expenses (often due to federal filings for low income property), the Pendell Commons will never be taxed at 100% of its assessed value. The Fairview Fire District has one of the highest tax rates in the county. Basically, Pendell Commons will require additional school, fire and water services, and not be paying their fair share of taxes. The property owners of the 4th Ward will be paying for Mr. Kearney's tax obligations. Pendell Commons may be wonderfull for seniors and low-income families, but at the cost of additional taxes to an already burdened community. How fair is that? [Check it out Bill]

  2. Responding to "anonymous": My analysis clearly states the assumption that Pendell Commons stay entirely on the tax rolls. If my assumption is false (and the thrust of Victoria Mara's letter is that it is), then obviously the conclusion is also. I'd be interested to know more detail about how much of a "tax discount" Pendell Commons might be expected to get.

  3. Do a web search for "New York Real Property Tax Law Section 581-a"

    This will help you find links to more detail.


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