Saturday, October 24, 2009

Poughkeepsie Journal Fails Truth-in-Taxing Test

The Poughkeepsie Journal has failed, in its recent stories about property taxes, to properly inform the public about what's really going on. Most readers of the Journal stories on property taxes in the City of Poughkeepsie and the Town of East Fishkill likely think that projected 2010 property taxes are going down substantially. The truth is that they're projected to go up from 5 to 9 percent. Most readers of the Journal stories on property taxes in the Town of LaGrange, the Town of Poughkeepsie, and the Arlington School District likely think that projected 2010 property taxes are going up by single-digit percentages. The truth is that they're projected to go up by double-digit percentages. The only recent Poughkeepsie Journal story that gets it pretty-much right is the one on the Town of Red Hook, where property taxes are projected to increase 25 percent.

Poughkeepsie Journal Parrots Government PR

In every one of these stories, the Poughkeepsie Journal has done nothing more than to rephrase the press releases and statements of government officials, even when those statements are deliberately misleading. None of the Journal stories has given any hint that there might be a different interpretation of the property tax situation than the government spin. The only reason the Town of Red Hook story is not misleading is that the government officials themselves were candid enough to provide the tax rate and tax rate increase.

The Tax Rate is All That Matters

From the viewpoint of property taxpayers and other members of the public (who pay property taxes indirectly through their rent), the most important measure of property taxes is the tax rate, and changes in the tax rate. In today's declining real estate market, property tax assessments are trending downward by single-digit or in some cases even double-digit percentages. In other words, the wealth of property owners — as measured by the market value of their properties — has diminished by these percentages. Under these conditions, property tax rates will tend to rise, even if the tax levy does not. And if the tax levy does rise, the tax rate will tend to rise even more. This is exactly what's been happening.

The Big Story is Being Missed

An increase in the tax rate is Really Bad News, because it means that our wealth is being taxed at a higher rate. Furthermore, it's likely that local governments will find it difficult to lower this rate to “normal” levels in the future, when the real estate market improves. In other words, the current dramatic increases in local property tax rates may result in permanent increases in the rate at which our wealth is taxed. This is a big story, and it's being played out in almost every local government jurisdiction. But you'd never know it from reading the Poughkeepsie Journal.

Government Officials are Just Doing Their Jobs

You won't hear this story from most government officials. When government officials discuss property tax issues in today's economic climate, it is to their advantage to deemphasize — or even omit — the tax rate and the change in the tax rate. Instead, they focus on the tax levy and/or the typical tax bill. In today's declining real estate market, increases in the tax levy and in the typical tax bill will be smaller than increases in the tax rate. By focusing on tax levies and typical tax bills, officials can make the tax situation seem not as bad as it really is, without actually lying. Putting the best face on a bad situation is what any good politician needs to do.

Truth in Taxing

Prominent disclosure of the tax rate and the change in tax rate is what I call truth-in-taxing. We cannot expect government officials to provide truth in taxing, because of their obvious conflict of interest. However, news sources such as the Poughkeepsie Journal have as a key purpose to inform the public about the workings of government. For stories related to property tax, such reporting means going beyond simply parroting the PR of government officials, especially when it is known that this PR is deliberately misleading. In property tax stories, the key issue is the tax rate and changes in the tax rate. This is always what the story is about, whether government officials wish to talk about it or not. Readers of the Poughkeepsie Journal need the tax rate and change in tax rate in order to understand the essence of what's happening. This means they need the change in the tax rate in the headline itself, in the lead sentence, and possibly also in the sidebar information — not buried in the tenth paragraph, or omitted entirely. The change in the tax rate is the story. Most recent Poughkeepsie Journal stories related to property taxes have failed to provide truth in taxing disclosures. I would very much like truth in taxing to become standard policy in the Poughkeepsie Journal's property tax reporting.

1 comment:

  1. After more than three weeks of fruitless attempts to contact Poughkeepsie Journal management regarding this blog, I was finally able to speak just now with Kevin Lenihan, News Editor of the Poughkeepsie Journal. Our conversation was quite lengthy, and mostly cordial, but nevertheless something of a stalemate. Lenihan pointed out that issues other than the tax rate change were also important, which is undoubtedly true. I attempted to convince Lenihan that the tax rate change is a more important part of the story than the tax levy change or the typical tax bill, despite what government officials prefer to emphasize. My impression is that Lenihan was not pursuaded that significant changes in reporting policy are called for. In any case, we agreed that the issue is mostly moot for this year, since so many local jurisdictions have already finalized their budgets for next year. I'm disappointed that Poughkeepsie Journal readers will not learn of the double-digit increases in their property tax rates.


Note: Only a member of this blog may post a comment.