Thursday, September 20, 2012

Fairview Fire District 2013 Budget Is a Record Breaker

The Fairview Fire District, already known for having the highest fire tax rate in Dutchess County and possibly the highest fire tax rate in New York State, has posted on its website a draft 2013 budget that  breaks many of its own records for high fire taxes. Although this budget is still only preliminary, it is the starting point for a proposed 2013 budget which must be approved by Fairview's Board of Fire Commissioners at an open meeting on September 25. The tax effects of this budget can be described with three superlatives:
  1. The highest true value fire tax rate in this millennium, a whopping $6.63 per thousand dollars of market value.
  2. The highest tax rate increase in this millennium, a whopping 15.8 percent increase over last year's tax rate.
  3. The highest tax levy in this millennium, and almost certainly the highest tax levy in Fairview's history, at $3,277,000.
Tax Levy Increase

If there's any good news here, it's the fact that the budget does not call for the highest tax levy increase in this millennium. It only calls for the second highest tax levy increase in this millennium, at 14.7 percent. The highest was set in 2008, at 20.9 percent. This parameter is the one that New York State's new “tax cap” law tries to limit to two percent. Of course, the two percent tax cap doesn't really affect fire districts.

Fairview's Tax History

The following chart shows Fairview's tax rate history. The 2013 bar is yellow to indicate that it is only a preliminary value, not yet approved by the Board of Fire Commissioners.

If you find charts like this useful, you can find similar ones for Fairview's market value and tax levy, as well as the yearly increases in each, and the data they are derived from, in my document Fairview Fire District Property Tax Data.

Fairview's Tax Rate Is Nearly 1/3 the School Tax Rate

Most property taxpayers in the Fairview Fire District also pay Hyde Park school taxes — the largest single tax on property tax bills. The Fairview fire tax is the second largest tax on property tax bills. Fairview's fire tax rate is 32 percent as high as the 2012-2013 Hyde Park school tax rate, even though the Hyde Park School District has its own list of superlatives, including the highest tax rate in this millennium. But that's another story.

Reserve Funds Unfunded — Again

Regular readers of this blog are aware that the Fairview Fire District has not been setting aside sufficient funds for future obligations in recent years. Fairview's 2010 budget contributed $143,000 to the reserve funds, roughly half of what should be contributed each year to finance long-term obligations. In 2011 and 2012 nothing was contributed to the reserve funds. The draft 2013 budget continues this short-sighted practice of contributing nothing to the reserve funds. So even with the exceptionally large tax rate increases of 2012 and 2013 (proposed), Fairview is getting further and further away from a sound fiscal footing. As I see it, even as Fairview's tax rates go through the roof, Fairview's long term financial crisis is deepening.

It Gets Even Worse

Perhaps you're thinking you've now heard all the Bad News® about the draft 2013 budget. But you haven't. Last year, Fairview's treasurer presented and Fairview's board of fire commissioners approved a budget document containing many flaws, including two contradictory tax rates, both of which were wrong. Fairview's board was clearly indifferent to whether the budget numbers presented to the public — or to themselves — made any sense.

I figured that this year, with two new board members, consideration would be given to avoiding the same kinds of embarrassing mistakes that were made last year. But I've clearly underestimated the ability of commissioners to create even more confusion than before. My analysis of presentation flaws in the draft 2013 budget is the subject of a forthcoming post.

UPDATE 11/1/2012 — Budget for 2013 is Finalized

At yesterday's Fairview Fire Commissioners meeting, the Board approved a final 2013 budget, unaltered from the above-described draft budget. Commissioners Ginny Buechele and Bob Gephard expressed “regrets” about the tax increase, but the vote was unanimous.

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