Town of Pleasant Valley Increases Tax Rate 23.3 Percent

The headline on the front page of the November 20 Poughkeepsie Journal (print edition) reads, “Pleasant Valley OKs 2011 budget; tax rate rises 9.19%”.  So why does the title of this post say the increase is 23.3 percent?

If you're a regular reader of this blog, you already know the answer.  It's the same refrain I've written about numerous times in this blog, such as here, here, here, and here.  The 9.19% figure was arrived at by directly comparing the 2011 tax rate with the 2010 tax rate, with both rates measured in dollars per thousand dollars of assessed value.  Such a comparison makes no sense, because the two tax rates correspond to different equalization rates.  It would be like comparing today's Dow Jones industrial average, measured in dollars, with yesterday's, measured in Euros.

Correct Computation Requires Conversion

To compare tax rates in dollars per thousand dollars of assessed value, one must first convert them to dollars per thousand dollars of market value by multiplying them by their corresponding equalization rates.  Thus, Pleasant Valley's 2010 tax rate is $3.79 per thousand dollars of assessed value.  Multiplying this by the 2010 equalization rate of 52 percent yields a tax rate of $1.97 per thousand dollars of market value.  Similarly, the 2011 tax rate of $4.12 per thousand dollars of assessed value multiplied by the 2011 equalization rate of 59 percent yields a tax rate of $2.43 per thousand dollars of market value.  Now the converted tax rates, $1.97 and $2.43, can be directly compared, yielding a 23.3 percent increase.  (If you try this at home, be sure your input data and all calculations are good to at least 6 significant figures.  Otherwise, noticeable round-off errors can accumulate.)

Who's To Blame for Mistake?

This is by no means the first time that the Poughkeepsie Journal has published wildly inaccurate tax rate increases for jurisdictions with varying equalization rates.  In the past, I have had direct confirmation that  Poughkeepsie Journal reporters have performed the mistaken calculations.  However, in the Town of Hyde Park, it is clear that the municipality itself is primarily responsible for the mistaken calculations.  For Pleasant Valley, I have not yet been able to determine whether it is the Town or the Poughkeepsie Journal that is responsible for the mistake.  I'll post again when I find out.