Tuesday, September 6, 2011

Suggestions to Improve Fairview's Fire Tax Projections

As part of my continuing coverage of the crisis in the Fairview Fire District, this post is the third in a series stemming from my attempt to analyze the Budget Projections Spreadsheet presented at Fairview's May 26 meeting.

 As I reported recently, Fairview Fire District Treasurer James Passikoff developed a Budget Projections Spreadsheet which is flawed by some tax data that is incorrect, and some tax data that is meaningless garbage.  These flaws make it more difficult for the general public and even the Board of Fire Commissioners to understand what may happen to Fairview fire taxes in the next few years.  Unfortunately, even if these flaws are corrected, stakeholders will still have a difficult time understanding Fairview's financial status.  That's because the spreadsheet format contains a great deal of extraneous detail, so that it's very difficult to see the big picture.  What's needed is a simpler and cleaner presentation of the financial facts.  This post suggests some specific ways to improve this presentation.

The first order of business, in my view, is to get rid of the single spreadsheet form of presentation, and replace it with multiple tables and charts, each dealing with a major aspect of budgeting, such as income, expenses, reserve funds, taxes.  For now, here are my suggestions for tax-related projections:
  • Do not display any data involving assessed values or equalization rates.  This means not only assessed values directly, but also tax rates measured in dollars per thousand dollars of assessed value.  Assessed values and equalization rates are simply artifacts of the legacy way of collecting property taxes, and are not meaningful for planning purposes.  Replace these parameters with market values (also known as home values, true values, full values, etc.) and tax rates measured in dollars per thousand dollars of market value (also known as true value tax rates).  Once this is done, separate tax rates for Poughkeepsie and Hyde Park become redundant (because they're the same).  Replace these separate tax rates by a Fairview Fire District tax rate.
  • Do not display any parameters for the Hyde Park and Poughkeepsie portions of Fairview.  None of these parameters affect tax projections.
  • Display the year-to-year percent changes in taxable market value and tax levy, just as is done for tax rate.  These parameters are important for seeing trends.
  • Transpose the table of projections.  That way, long-term planning can be carried out for any number of years into the future — or past — while keeping a constant table width.
If all the above suggestions are accepted, the resulting table will appear something like this:

but with years extending more into the future and less into the past.  The above table is from page 1 of my May 23, 2011, report Fairview Fire District Property Tax Data.  The last 6 pages of this report display each column of the table in convenient chart form, showing trends at a glance.  For example, Fairview's tax rate trend (page 7) is as follows:

This report was published in conjunction with my blog post Fairview Fire District Tax Base Projected to Drop 2.7 Percent.


I would be happy to contribute my Microsoft® Excel workbook, used to generate the table and charts, for use by Fairview officials.  It can be modified easily to add future years and remove past years.  I would also be happy to work with Fairview officials to facilitate this.  In my view, the above style of presentation will be easier for may stakeholders to understand than that in the current budget projections spreadsheet.

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