Saturday, October 13, 2012

Hyde Park School District Tax Rate Is Highest in Millennium

Five years after the 2008 global economic meltdown, the effects are still being felt here in Dutchess County. Property values are continuing to drop. For the latest assessment rolls (July 1, 2012), Dutchess County's taxable market value dropped 3.9 percent over last year. That's a greater drop than the previous year's, and only a fraction of a percent less than the average yearly drop of the last four years. So the trend of falling property values continues unabated.

My recent post Dutchess County Gov't 2013 Tax Rate Likely To Be Highest in Millennium shows this trend and how, all other things being equal, it leads to rising tax rates. Of course, all other things aren't equal — all other things are worse also. The meltdown means that government services will actually cost more, while delivering less. Dutchess County Government's 2013 true value tax rate will almost certainly be the highest in this millennium (so far). High tax rates are burdensome for property taxpayers because the tax rate is essentially the proportion of a taxpayer's wealth, as measured by the taxable market value of his/her property, that is paid in tax.

Hyde Park School District's Market Value

So much for the big picture in Dutchess County. For smaller local government taxing authorities (towns, villages, cities, school districts, and special districts), we are seeing the same effects of continually decreasing property values, record-breaking tax levies, and worst of all, record-breaking tax rates. This post examines these effects for the Hyde Park School District. For the latest assessment rolls, the Hyde Park School District's taxable market value has dropped only 3.1 percent since last year, compared with 3.9 percent for Dutchess County as a whole.

District's Tax Levy

The Hyde Park School District's tax levy has increased every year of this millennium, even in the face of a recently decreasing tax base. The District's 2012 tax levy of $54.2 million is the highest in this millennium, and almost certainly the highest in the history of the District. Not only that, but the following chart shows that the District's 2012 tax levy increase of 2.7 percent is the second highest since the meltdown began.

Data for 2012 is from a presentation Tax Levy Calculations, Rates by Hyde Park School District Assistant Superintendent for Business Wayne Kurlander to the Board of Education on August 23, 2012. Data for earlier years is from the yearly tax rate pamphlets published by the Dutchess County Real Property Tax Service Agency.

District's Tax Rate

Here's the really bad news: The Hyde Park School District's 2012 true value tax rate of $20.42 per thousand dollars of market value is the highest in this millennium — exceeding $20 for the first time — as shown in the following chart:

This means that Hyde Park School District taxpayers are paying a greater proportion of their wealth, as measured by the taxable market value of their property, than at any previous time in this millennium. The second highest tax rate occurred in 2000, when property values were only about half of what they are now.

The following chart shows that the 2012 Hyde Park School District's tax rate increase of 6.0 percent is the second highest in this millennium. (The highest, in 2010, was mainly caused by a whopping 13.1 decrease in the District's taxable market value.)

If you find these charts useful, you can find more of them and the accompanying numerical data in my report Hyde Park School District Tax Data.

Hyde Park School District's Tax Presentation is Misleading

The Hyde Park School District has not explained its current tax parameters in historical perspective, at least not according to the Tax Levy Calculations, Rates presentation by Kurlander mentioned above. Stakeholders have no way of knowing from Kurlander's presentation that property owners are being taxed at a higher rate than ever in this millennium.

It is understandable that the District may not want to emphasize such dire facts. Unfortunately, Kurlander's presentation does not simply leave out important information. It actively promotes a misleading picture which confounds the ability of taxpayers, the board of education itself, and other stakeholders to properly understand the changes in the school district's property values and tax rate from last year to this year. This misleading picture was uncritically reported by the Poughkeepsie Journal, in a successful attempt to create a sense of unfairness where no unfairness actually exists.

I will have more to say about Kurlander's presentation in a forthcoming post.

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