Beekman Taxpayers Face 10 Percent Tax Rate Increase

Q: What tax rate increase can Beekman taxpayers expect to see in 2010?
Short Answer: Just read the title of this post.
Long Answer: Read this whole post.

The answer is complicated by the fact that the Town of Beekman has proposed to transfer its $319,800 ambulance contract to the Beekman Fire District. This cost-shifting makes the Town of Beekman tax rate increase smaller than it would otherwise be, and it makes the Beekman Fire District tax rate increase larger than it would otherwise be. From the taxpayer's viewpoint, what matters is the combined effect of the Town's rate increase and the Fire District's rate increase. That's because, as I've written so many times before, the tax rate is all that matters.

One cannot simply add the two rate increases, because they pertain to different tax levies. Instead, one must first sum the tax levies, then calculate a combined tax rate, and then compare these rates for 2009 and 2010. Two factors make it even more complicated to compute the overall Beekman tax rate increase:

1. The tax base for the Town of Beekman is approximately 4 percent smaller than that for the Beekman Fire District, because of special exemptions (such as for veterans) that apply only to the Town tax. This means that about 4 percent of Beekman's assessed value pays only fire tax, no town tax.
2. The Beekman Fire District's tentative 2010 budget has very recently been modified to reduce the fire tax levy by $107,000, as I learned today from Beekman Town Supervisor John Adams.
   

Beekman Tax Bills

Taking all the above into account, Beekman property taxpayers can expect to see the following on their 2010 property tax bills:

1. Town of Beekman tax rate of $1.32 per thousand dollars of assessed valuation, representing a 0.7 percent decrease from 2009. This 0.7 percent decrease represents a correction of the blunder I reported yesterday, and which Adams has graciously confirmed.
2. Beekman Fire District tax rate of $0.65 per thousand dollars of assessed valuation, representing a 42.0 percent increase from 2009. (Without the recent $107,000 tax levy reduction, the tax rate increase would have been 56.3 percent.)
3. The combined effect of the above two taxes is an effective tax rate of $1.97 per thousand dollars of assessed valuation, representing a 10.2 percent increase from 2009. (Without the recent $107,000 fire tax levy reduction, the tax rate increase would have been 14.0 percent. None of the numbers in this item will appear explicitly on the tax bill.)
4. Possible additional taxes for properties in Pawling Lake Estates and Dover Ridge (water/sewer). These additional taxes are separate from the Town and Fire District taxes, and are not considered in this analysis.
   

The key number from the taxpayer's viewpoint is the 10.2 percent effective tax rate increase, combining the Town of Beekman tax and the Beekman Fire District tax. (Item 3) This number gives the best measure of how much more heavily each taxpayer's wealth — as measured by the market value of his property — is being taxed by the Town of Beekman and the Beekman Fire District.

Response from Beekman Town Supervisor

I'm pleased that Adams has added a comment to my previous Beekman post, and that we now agree about the effective Beekman tax rate increase. I'm also glad that Adams has chosen to publicly state the effective tax rate increase for Beekman. As I've said many times before in this blog, from the taxpayer viewpoint the tax rate is all that matters. On the other hand, Adams couldn't resist adding:

Keep in mind that the valuation of the Town dropped by about 6% so the effective change in dollars paid will be about 4%.

Although these are true facts, taxpayers are advised to disregard them. The main purpose of such statements is to make tax increases sound not as bad as they really are. I've written about this extensively in The Dirty Little Secret of Property Taxes.

Disclaimer: All of the above numbers are based on proposed budgets, and are subject to final approval of these budgets by the Town of Beekman and the Beekman Fire District.

Acknowledgments: My thanks to Beekman Town Supervisor John Adams, Beekman Town Budget Officer William Brady, and Beekman Town Councilman Daniel French for graciously providing information essential to this analysis.