Thursday, December 10, 2009

County Legislature Increases Tax Rate 14.3 Percent

A front-page story in today's Poughkeepsie Journal by reporter Jenny Lee-Adrian, headlined “Legislature OKs Budget, Raises Property Tax Levy”, features a prominent diagram (in the print edition) with the following contents:
  • What Steinhaus Proposed:  0% property tax levy increase
  • What County Legislature Changed:  9.4% property tax levy increase
So why does the title of this post say “14.3 percent”?  If you've been following this blog the last few months, you already know the answer.  It's because the Poughkeepsie Journal (and Steinhaus, and the legislators) are talking about tax levy, and I'm talking about tax rate.  As I've argued repeatedly in this blog, the most important thing for taxpayers is the tax rate.  The tax levy is just smoke, designed to make the increase seem smaller than it really is.  If I were writing this news story, my diagram would say:
  • What Steinhaus Proposed:  4.6% property tax rate increase
  • What County Legislature Changed:  14.3% property tax rate increase
Both property tax rate increases are with respect to the 2009 tax rate of $2.54 per thousand dollars of market value.  Steinhaus' proposed 2010 tax rate is $2.66, and the legislature's is $2.91.  These numbers are easy to compute from the property tax levies mentioned in the story.  As I mentioned in my earlier post on this subject, the reason the tax rates increase more than the tax levies is that the market value of Dutchess County has decreased by four and a half percent in the last year.

One can hardly blame the politicians for trying to put the best face on a bad situation, but the Poughkeepsie Journal could do a better job of informing its readers.  Property taxpayers are in for a lot worse news than they'd think by reading the Poughkeepsie Journal.


  1. You are spot on with this website. I live in Fishkill, where the Tax Rate increased by 15% in 2008, 11% in 2009 and at least another 4% in 2010. 30% increase in 3 years!

    Everytime, the press reports that you are paying the same, as they lower the assessments and raise the TR to make the Tax Levy.

    They are wrong, you are paying more for a property worth less.

    Whats even more frustrating, is the same media. Allowed Fishkill to claim 10 years of Tax Cuts by lowering the Tax Rate. In 10 years the TR was lowered by less than 5% including 1 cent in 2004.

    I wrote to all local media expaining this. If you can claim a tax cut by lowering the TR, then when it goes up, it is a increase!

    In essence, if you don't raise the Tax Levy, you can never be called on for raising taxes.

    Keep up the good work.

  2. My math is different: a house assessed for 2009 at $250K pays $635 at the rate of $2.54 per $1K. Same house assessed for 2010 at $239K pays $636 at the projected rate of $2.66 per $1K. With the Legislature's projected rate of $2.91 per 1K, the $239K house pays $695, an increase of 9.5%.

    How are you getting your numbers?

  3. Response to "Anonymous": What you're not taking into account is that your house is worth 4.4% less in 2010 than in 2009. So you're paying the same number of tax dollars as before (at the $2.66 rate), even though you're less wealthy (as measured by the market value of your house). If you ignore how much your house is worth, you're in for a big surprise if you try to sell it.

  4. Just think, property values according to the Poughkeepsie Journal, just this week. Stated that while sales were up, prices were down another 14%.

    That means your 2011 will be lower and they will need to raise the Tax Rate to make the Tax Levy.

    Tax Levy is the amount a government needs to operate for a fiscal year.

    Tax Rate is the amount each property owner pays to make the Tax Levy.

    Another note of interest, the Commercial, non Homestead Tax Rates are going through the roof.

    Up 30% in Fishkill in the last 3 years alone.

  5. Well it looks like maybe the Journal finally woke up. Today's (Dec. 11, 2009)article is closer to the real story. Any expanation for the difference between PoJo's 14.6 percent increase in the tax rate and your 14.3 percent increase in the tax rate. Not that it makes much difference. We're all sunk if this budget passes the final mustard. You'll know you live in Dutchess County if your house goes up for foreclosure next year.

  6. Response to Ginny: "Any explanation for the difference between PoJo's 14.6 percent increase in the tax rate and your 14.3 percent increase in the tax rate?"

    Thanks for noticing. My result is based on an exact calculation, using official inputs. When I can verify exactly what assumptions were used to get the Poughkeepsie Journal's result, I'll post again to this blog.

  7. Response to Ginny: "Any explanation for the difference between PoJo's 14.6 percent increase in the tax rate and your 14.3 percent increase in the tax rate?"

    Yes: The Journal's calculation used rounded tax rates, which introduce inaccuracies. For the full story, see Item 2 of my blog post at 8:41 P.M. today.

  8. The "official inputs" used to compute the 14.3 percent tax rate increase were from the legislature, and were apparently only an estimate. The county budget office later refined the tax levy, yielding a tax rate increase of 13.9 percent. For details, see


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