Pace Study's Analysis of Fairview Fire Tax Rate is Flawed

Pace University's Michaelian Institute for Public Policy and Management released its 189 page Fairview Fire District Consolidation and Efficiency Study final report on June 12. This work, known locally as the Pace Study, examines the feasibility of Fairview consolidating with one or more neighboring fire districts. Pace Study Principal Investigator Michael Genito will present this work at a public meeting this evening, according to the Pace Study website.

In spite of the central importance of tax rates to fiscal analysis, the final report devotes only three sentences and one chart to Fairview's past and future tax rates. Unfortunately, these three sentences, which pertain to average yearly tax rate increase and projection to 2017, are incorrect. Also, the chart contains some incorrect data and an incorrect linear approximation. When I presented my analysis to Genito, he readily concurred that all these statements and the chart are flawed.

Flawed Final Report Passage

The flawed information, on page 175 of the final report PDF (labeled page 167), is as follows:

The Fairview Fire District tax rate has increased on average 4.4% each year from 2008 through 2012. A linear regression of the past five years going forward indicates that by 2017 the tax rate would approximate $6.50 per $1,000 taxable assessed valuation. As such, and all things being equal, the median home would expect to see their fire service property tax to rise from $1,321 per year to $1,502 in 2017.

The above chart, copied from the final report, is confusingly labeled “Tax Rate per $1,000 Assessed Value”, but it is clear from context that this data is really tax rate per thousand dollars of market value, otherwise known as true value tax rate. This is the appropriate kind of tax rate for this analysis.

2008 Fairview Fire Tax Rate Is Incorrect

The key flaw is that the 2008 tax rate in the above chart is incorrect. Fairview's effective 2008 tax rate is $5.16, whereas the above chart shows it to be approximately $4.83. The final report's error in Fairview's 2008 tax rate leads to all the other errors in this passage, as will be explained below.

Genito's Blunder

How did Genito come to make this error? He apparently took an unwarranted shortcut. Instead of dividing Fairview's tax levy by Fairview's market value (the correct method, and the definition of true value tax rate), he took the Poughkeepsie portion of Fairview's tax levy and divided it by the Poughkeepsie portion of Fairview's market value. Under ordinary circumstances, such as between 2009 and 2012, Genito's method would give the same — or nearly the same — result as the correct method. Unfortunately, Fairview's circumstances in 2008 were far from ordinary.

Inequitable Apportionment

Long-time followers of my work know that for every year from 2001 to 2008, apportionment of Fairview's fire tax levy between Poughkeepsie and Hyde Park has been inequitable, resulting in different true value tax rates for the Poughkeepsie and Hyde  Park segments, in violation of New York State Real Property Tax Law. In 2008, the Poughkeepsie segment had a true value tax rate of $4.83 — the number on Genito's chart — but the Hyde Park segment had a whopping true value tax rate of $5.96. All these facts were documented in detail four years ago here, and especially here.

Corrected Chart

In order to fairly graph tax rates, the Y-axis should ordinarily begin at zero dollars. Genito's chart begins the Y-axis at $2, presumably to better visualize small changes in tax rate. The following chart, using the corrected 2008 value, takes this decision further, beginning the Y-axis at $5. This way, small changes in tax rate can be seen even better.

Although the final report's chart includes a straight line approximation to the data and an extrapolation to 2017, such analyses are not appropriate to the corrected data. That's because the corrected data simply does not fit a straight line well enough to justify such an approximation. The corrected data cannot meaningfully be used to linearly extrapolate Fairview fire tax rate out even one year — let alone five years. Once again, Genito concurs with this judgement, which is supported by generally accepted criteria for goodness of fit to a straight line. What this means is that there is simply no basis to support the second and third sentences in the final report's passage, which project 2017 values.

Fairview's Tax Rate Has Been Trending Down Until 2012

We know that taxes are always going up, right? Well, not in Fairview. Examination of the corrected chart between 2008 and 2011 shows that Fairview's yearly tax rate change has been downward twice and upward only once. Even the single upward change from 2010 to 2011 leaves Fairview's tax rate lower than it was in 2008. A standard linear approximation to Fairview's 2008—2011 tax rate would show a decreasing tax rate, not an increasing one.

Fairview's Tax Rate Has Been Approximately Constant — Until 2012

Fairview's downward trend in the 2008—2011 time period is actually quite small. It would probably make more sense to approximate Fairview's tax rate during this time period as a constant value. With such an approximation, Fairview's 2008—2011 tax rate is $5.10 plus or minus 1.2 percent for every year in this interval. The 2011 tax rate is equal to this constant value to within 0.2 percent.

Fairview's 2012 Tax Rate Breaks the Pattern

This pattern of constant tax rate is broken in 2012, where the tax rate soars 12 percent from its historical value of $5.10. It is this break from the pattern that makes it infeasible to predict future tax rates. Another way to look at it is that there is no way one could have predicted Fairview's 2012 tax rate by extrapolation from the previous 4 years.

Average Yearly Tax Rate Increase Is Misleading

What about the first sentence in the final report's passage (average tax rate increase of 4.4 percent per year)? This statistic depends crucially on the 2008 value. With the corrected value, the average tax rate increase is only 2.6 percent per year, not 4.4 percent. Thus the passage's first sentence is incorrect.

Of course, even the corrected sentence is of dubious value. Averages can be deceiving. Why mention a formally correct “average increase” when the tax rate actually decreases as often as it increases. A man drowned in a river whose “average” depth was 6 inches. But he was in the 10-foot part. For the average yearly tax rate increase, essentially all of the tax rate increase during the 5-year period occurred in the last year.

Flawed Passage Is Best Removed

According to Genito, the report's inclusion of the above-quoted passage stemmed from a request by Fairview officials (the “Study Committee”) for a projection based on a 5-year history. Now that Genito has accepted my correction, he and I seem to agree that no future projection can be justified by the data. As I see it, the average tax rate increase is misleading as well, and is best omitted. The only part of the flawed passage that could be of positive value is the corrected chart. This chart is certainly useful for understanding Fairview's fiscal situation, but such an understanding appears to be outside the scope of this report.

Joel Miller Just Can't Get Fairview Facts Straight

“Everyone is entitled to his own opinion, but not his own facts.” Daniel Patrick Moynihan

Try as he might, New York State Assemblyman Joel Miller just can't get his facts right regarding the Fairview Fire District. On his first try, in a Poughkeepsie Journal Valley Views article on April 22, 2012, he wrote

Fairview alone had fire district tax rates nearly 10 times higher than 27 other towns in Dutchess County in 2010.

I pointed out in Joel Miller's Flawed Legislation for Fire District Budget Empowerment that there are only 20 towns in Dutchess County, and that even if he meant “fire districts” instead of “towns” (which would have made more sense), his statement is still not even close to correct.

Flawed Staff Work

In preparation for that blog post, I spoke with the staffer for Miller who had generated this misstatement. This staffer had already reviewed some of my own reports, including The Big Three Fire Districts of Dutchess County. It became clear to me that this staffer was not well prepared to interpret quantitative information, and the staffer readily conceded as much. My instinct was that if Miller were to release a corrected statement, it might also be wrong. Because I genuinely wanted facts to be correctly stated, I suggested a corrected statement, and I offered to preview any proposed new statement about Fairview. I never heard from Miller or any of his staffers about this matter.

My instinct turned out to be correct. On April 26, Miller sent a press release to each Fairview Fire Commissioner. This press release was essentially a rewording of his Valley Views article, except that the incorrect statement about Fairview was replaced by a new incorrect statement about Fairview:

Fairview alone had fire district tax rates nearly eight times higher than 30 other fire districts in Dutchess County in 2010.

The irony is that the above statement appears to be a mis-quote of a statement in my own report, which reads

Fairview’s tax rate is nearly eight times the average of the non-big-three districts.

Apparently the staffer thought the word “average” in my statement didn't really mean anything important, and could just be omitted! But as most European high school students know, an average of a bunch of numbers must be smaller than some of the numbers being averaged. In fact, for ordinary data like tax rates, roughly half the numbers can be expected to be greater than the average. Maybe even much greater.

And so it is in this case. Half the non-big-three fire districts had tax rates greater than the average of the non-big-three, and half had tax rates less than the average. So Fairview's tax rate was eight times higher than only 14 other fire districts — not 30 other fire districts.

Incidentally, “30 other fire districts” in Miller's statement is wrong too. There were only 30 fire districts in the whole analysis, and the big three fire districts were excluded from this average, so there could only be 27 non-big-three districts. The (weighted) average of these 27 was greater than 14 of these districts, and smaller than 13 of these districts, as one would expect. For five of these districts, Fairview was only about four times higher — not 8 times higher as Miller claimed.

Miller Has Been Ambivalent About Accuracy

This post isn't about flawed staff work. The principal is responsible for the work of his staff. If Miller had any doubt whether his staff could handle the fire tax rate issue, the doubt was resolved the first time the mistake was made. At that point, Miller knew — or should have known — that his staff didn't know what they were doing on this issue, and so were unlikely to make a proper correction on their own. Miller could have arranged for an independent review of his proposed “correction” before it was released. (I would have been glad to accommodate.)

But this post isn't just about fire taxes either. Joel Miller represents 6 of Dutchess County's 20 towns in the New York State Assembly. Yet he allowed himself to write “27 other towns in Dutchess County,” a gaffe that he or any member of his staff could easily have corrected without knowing anything about fire tax rates.

Taken together, these mistakes show Miller to have been ambivalent about the accuracy of his factual statements. Such lapses affect his credibility.

The Big Three Tax Exempt Institutions of Fairview

This is the third in a recent series of posts about the crisis in the Fairview Fire District.  Fairview's long-term crisis is that it has not set aside sufficient funds to pay for future obligations.  If Fairview cannot increase its income, it will be forced to take the drastic step of reducing service.  Reducing service would increase risk to life and property in measurable ways, and it would also increase insurance rates for all property owners in Fairview.

Approximately 95 percent of Fairview's income comes from the fire tax levy.  But simply increasing the tax levy is problematic for two reasons:

1. Fairview's fire tax rate is already the highest in Dutchess County, and one of the highest in New York State.  With the continuing drop in property values, Fairview's 2012 fire tax rate is projected to increase 2.8 percent even if the tax levy is held constant.  The resulting true value fire tax rate will be $5.25 per thousand dollars of market value — the highest in a decade.  Fairview property owners have argued that the fire tax is already too high.
2.  If Gov. Cuomo's 2 percent tax cap becomes law, it may be difficult or impossible for Fairview to substantially increase the fire tax levy.

Payments In Lieu Of Taxes (PILOTs)

For these reasons, it makes sense for Fairview to look beyond the tax levy to other sources of income.  A longstanding proposal is to ask Fairview's tax exempt institutions for Payments In Lieu Of Taxes (PILOTs).  Tax exempt institutions represent 48 percent of Fairview's total market value.  Indeed, these exempt properties represent a major reason for Fairview's high tax rate.  Accordingly, this post focuses on Fairview's tax exempt institutions.

The Big Three

The following pie chart shows the components of Fairview's tax exempt market value, which I compiled from the tentative assessment rolls applicable to the 2012 tax bill:

Note that this chart differs only slightly from the 2010 chart published on page 11 of The Big Three Fire Districts of Dutchess County.  Marist College, St. Francis Hospital, and Dutchess Community College can be called the big three tax exempt institutions of Fairview.  Together, they comprise more than three quarters of Fairview's exempt market value:

Institution	Market Value	Percent
Marist College	$218,248,000	42.1%
St. Francis Hospital	$120,114,500	23.2%
Dutchess Community College	$56,007,500	10.8%
all others	$123,527,889	23.9%
Total:	$517,897,889	100%

In the last few years, the general trend of property values in Dutchess County has been downward, and this trend has continued for 2012. Thus, St. Francis Hospital's tax exempt market value is down 9 percent from 2010, and Dutchess Community College's is down 4 percent. Most parcels of Marist College are down 4 to 8 percent; however, one of Marist's parcels increased in value from $274,000 to $17.8 million due to the construction of residence halls.  The net effect is that Marist College's exempt market value has increased by 3 percent from 2010.

Hudson River Psychiatric Center

The fourth largest tax exempt institution in Fairview is the Hudson River Psychiatric Center (HRPC).  However, this is destined to change soon.  The New York State Office of Mental Health has recently announced that it will close Hudson River Psychiatric Center by October 1, 2011.  Once HRPC is gone, the big three tax exempt institutions will dominate Fairview's tax exempt landscape even further.

PILOTs From the Big Three

Marist College has been contributing PILOTs to the Fairview Fire District every year for a number of years.  The yearly contribution amount has been trending upward, with the most recent yearly contribution being $125,000.  But to put this number into perspective, if Marist College were entirely taxable (instead of almost entirely tax exempt), its annual Fairview fire tax would exceed one million dollars.  To the best of my knowledge, St. Francis Hospital has not contributed PILOTs in recent years.  However, it has contributed some services to the fire district with monetary value per year in the low 5-figure range.  I believe Dutchess Community College has occasionally contributed one-time PILOTs to Fairview in the low 5-figure range.

Can the Big Three Save Fairview?

The Fairview Fire District faces a long-term financial crisis which, if not resolved, could result in reduced services to all Fairview property owners and residents.  These reduced services have quantifiable costs:  All property owners would see increased insurance rates.  There are also unquantifiable costs in reduced safety, resulting in greater risk of injuries and deaths.  The Big Three Tax Exempt Institutions of Fairview may feel these costs more than some other stakeholders.  It may be in their self-interest to avoid these costs by bailing out the fire district with new or increased PILOTs.

Fairview Fire District Is in Crisis

On Thursday, May 26, 2011, the Fairview Fire District Board of Fire Commissioners combined Budget and Long Range Planning Committees held a remarkable public workshop meeting at the Fairview Fire House.  The picture of Fairview's status painted at this meeting is nothing short of dire.  This meeting marks a major turning point in Fairview's history.  To put this turning point into perspective, it helps to know Fairview's previous turning point:

Fairview's Previous Turning Point

On April 24, 2008, over 400 residents of the Fairview Fire District attended a meeting of Fairview's Board of Fire Commissioners to express their outrage at the exorbitant Fairview fire tax.  Fairview's fire tax rate had for years been the highest by far of any fire district in Dutchess County, and one of the highest in New York State.  That meeting marked the beginning of increased involvement by Fairview's residents (including me) in Fire District matters.  In the following three years, voters turned out in extraordinary numbers to elect three newcomers to the Board of Fire Commissioners, Jill Line, Bob Gephard, and Joe Petito.  These newcomers replaced veterans who had run Fairview for years, if not decades.  In my view, this is an inspirational story of democracy in action, a counterexample to the common lament that politicians who displease us are entrenched, and that there's nothing we can do about it.  The fact is that a surprisingly small group of dedicated Fairview taxpayers and residents was able to replace the veterans with newcomers who were believed to better represent the interests of Fairview's residents.

Public Workshop Meeting

This week's public workshop meeting was billed as an attempt to “discuss with the residents the status of the District”.  I had commended Mr. Gephard beforehand for initiating and leading the long range planning committee, and for arranging for this public workshop meeting.  As I saw it, openness about long range planning helps all stakeholders see what possible futures may look like, and allows the public to influence decisions before things get really bad.  At worst, this exercise does no harm.  I did not realize beforehand the critical situation that would be revealed at the meeting. That fact, in my view, makes Bob's contributions even more important than I'd originally thought.

Advance publicity for the meeting was minimal, and it gave no clue that two bombshells would be dropped at the meeting.  This is probably why less than a dozen residents attended, mostly the regulars at monthly commissioners meetings.  However, many other stakeholders were present, including career and volunteer firefighters, Fairview Board Chairperson Jill Line, Fairview Treasurer Jim Passikoff, and various other officials.  In the end, perhaps 30 people were there, including about half a dozen presenters.

Commissioner Gephard, Firefighter Mark Bendel, and others presented two hours of detail on the financial and operational status of the district, followed by an hour of questions and comments from the floor.  A serious difficulty, in my view, was that there was precious little in the way of summary of the main points by the presenters, particularly in the financial area.  I have frankly struggled to divine what the main issues are.  What follows is my best understanding of the main points.  I likely haven't got everything right here, and I welcome corrections and clarifications.

So What's the Crisis?

There are actually two crises, an immediate one, and a long-term one:

1. The immediate crisis is that the fire station has become understaffed, and that the firefighters are greatly overstressed.
2. The long-term crisis is that the fire district has not been setting aside sufficient funds for future obligations.  When these costs come due, the District will not have the funds to pay them.

The problem is that it may not be wise to attempt to solve the immediate crisis without knowing how the long-term crisis will be solved.

Short Term Staffing Crisis

Mr. Bendel's presentation on the immediate crisis was particularly effective.  Bendel explained that the fire station must be staffed by 4 career firefighters at all times (24x7) in order to maintain Fairview's level of service in the District.  This staffing level requires at least 16 career firefighters.  Unfortunately, in recent months 3 firefighters have left the District (retirement and transfer), and one more is unavailable because of injury.  To continue Fairview's level of service, the remaining firefighters have been working overtime (mostly at straight-time pay) for a number of months.  Although the financial cost of this arrangement is minimal, the stress on firefighters is extreme, and unsustainable.

The District cannot simply reduce the fire station staffing from 4 per shift to 3, even temporarily, without major repercussions.  Mr. Bendel explained that having only 3 firefighters available to fight a structure fire would dramatically reduce the level of service, resulting in significant increases in risk to both life and property.  Not only that, but the reduced level of service would cause all property insurance rates in the fire district to increase considerably.  All stakeholders would be substantially affected by a reduced level of service.   

A decision to reduce the level of service amounts to a game-changing dismantling of part of Fairview's mission.  The Fairview Fire Commissioners would presumably ask for input from all major stakeholders before authorizing a reduced level of service.  This public meeting appears to be the beginning of such an inquiry.

Long Term Financial Crisis

In recent years, Fairview's budgets have not set aside sufficient funds for future maintenance and replacement of apparatus and equipment and other future obligations.  The money that should have been set aside was used instead to decrease the fire tax burden.  The result is that Fairview's fire tax rate has remained remarkably steady at just over $5.00 per thousand dollars of market value since the economic meltdown of 2008, despite falling property values.  See the chart on page 7 of Fairview Fire District Property Tax Data.  Fairview's steady tax rate on that chart is in sharp contrast to that of the other of the big three fire districts of Dutchess County — Arlington and LaGrange.  The tax rates of both these fire districts have been climbing steadily since 2008.  I had seen Fairview's constant tax rate in recent years as the result of prudent management.  In reality, it has been just the opposite.  Fairview has essentially been “robbing Peter to pay Paul” by not setting aside money for future needs. 

What are Fairview's choices at this point to solving its financial crisis?

1. Decrease the budget.  However, this cannot be done without reducing staffing, because staffing is the primary cost in the budget.  Reducing staffing cannot be done without major safety and insurance repercussions, as described above.
2. Increase the fire tax levy significantly.  However, a strong case can be made that the fire taxes are already as high as can be tolerated.  Many would argue that the tax rate is higher than can be tolerated, although it's been at about the same $5.00 rate for nearly a decade.  On the other hand, Fairview's tax rate was $6.07 in 2001 and $5.73 in 2002.  See Fairview Fire District Property Tax Data. So a painful argument could still be made that there's room to increase the tax rate by almost $1.00.  Even so, would that be enough?  On the third hand, if Gov. Cuomo's two percent tax cap applies to fire districts, this choice is entirely off the table.
3. Obtain significant and sustained funding from sources other than property tax. 

The most obvious place to turn for funding is Marist College, St. Frances Hospital, Dutchess Community College, and the other not-for-profit institutions in Fairview which are exempt from fire tax.  Tax exempt properties make up 48 percent of Fairview's market value.  In the past, these institutions have provided only very limited support.  But the circumstances may be different now.  If these institutions do not contribute substantial payments in lieu of taxes (PILOTs), they may be faced with a substantial degradation in services from Fairview, resulting in increased risk to their property (and the lives of their students, patients, and employees) and increased insurance premiums at the same time.  These considerations may persuade these institutions that it is in their interest to increase their support to Fairview.

Tying the Two Crises Together

How much time does Fairview have to resolve these crises?  The staffing crisis is clearly urgent, and cannot be allowed to continue any longer than necessary.  However, simply adding staff now to solve the immediate crisis would only make sense if the financial crisis can be solved by finding more income, a strategy which is not certain of success at this point.  If Fairview replaces staff now, and then fails to secure more income, Fairview will need to decrease staffing after all.  It might not be prudent for Fairview to bring on more staff now without some assurance that it can be paid for. 

Fairview is indeed in a very difficult position.  It is by no means certain that Fairview can continue to provide the level of service that it has in the past.  Resolving this crisis will require continued openness by the new Board of Fire Commissioners, as well as the cooperation of all other stakeholders.  Even then, it will require skill, creativity, and perhaps even some good luck.

The Big Three Fire Districts of Dutchess County

Of the 30 fire districts and fire protection districts in Dutchess County, I call the Arlington, LaGrange, and Fairview fire districts the big three fire districts. They are the big three in two different ways:

• They have the three highest tax levies.
• They have the three highest tax rates.

I've just posted a report to my sister website Fairview Fire Tax about the big three.  This report compiles current and retrospective information about tax levies, tax rates, market values, and exempt percents for the big three fire districts into a series of 24 bar charts, 8 tables, and 4 pie charts, with analytical commentary.  Bar charts include a ten-year history of market values, tax levies, and tax rates, and annual changes in these values.  Some highlights of the report:

• Fairview has the highest fire tax rate in Dutchess County.  However, if fire taxes were billed universally – to tax exempt as well as to taxable properties – Arlington would have the highest universal tax rate, with Fairview second.  Economies of scale should have favored Arlington’s universal tax rate, since Arlington is four times larger than Fairview, both in total market value and number of fire stations.  Yet Arlington’s universal fire tax rate is 30 percent greater than Fairview’s.
• From 2001 to 2008, the tax rates of all the big three fire districts have decreased.  With the economic meltdown, 2009 and 2010 tax rates in Arlington and LaGrange (but not Fairview) have significantly increased. In 2008, Fairview’s tax rate was 61 percent larger than Arlington’s, but in 2010, Fairview’s tax rate has become only 20 percent larger than Arlington’s.
• Nearly half of Fairview’s market value is tax exempt. Fairview’s exempt percent has been 47.7 percent plus or minus 0.2 percent in each of the last three years, when adjustment is made for a 2008 tax assessment blunder by the Town of Poughkeepsie Assessor's office.
• If the City of Poughkeepsie’s fire department were a fire district, it would be in the Big Three, both for its equivalent tax levy and its equivalent tax rate.

The big three are high priced fire districts.   But high priced fire districts also tend to be high quality-of-service fire districts.

Fairview's 2008 Exempt Percent Understated due to Assessment Blunder

A $120 million blunder by the Town of Poughkeepsie Assessor's office in 2007 caused the Fairview Fire District's official 2008 exempt percent to understate the true exempt percent.  The true portion of Fairview's market value that was exempt from fire taxes in 2008 is not 41.7 percent as I reported, and as confirmed by a Dutchess County official.  The true portion is probably near 47.9 percent, an increase of 6.2 percent.

Background

The Fairview Fire District has the highest fire tax rate of any fire district in Dutchess County, and possibly the highest in New York State.  Until nearly two years ago, a widely-quoted reason given for Fairview's high tax rate is that 70 to 80 percent of Fairview's market value is tax exempt.  My report, Tax Exempt Properties in Fairview posted to my Fairview Fire Tax website on June 18, 2008, showed this reason to be an urban myth.  My analysis showed that for the 2008 fire tax year, only 41.7 percent of Fairview's market value was tax exempt.  This result was later confirmed by Kathleen Myers, Director of Dutchess County's Real Property Tax Service Agency. 

Fairview's 2008 exempt percent had some practical importance.  At the time my report was posted, State Senator Stephen Saland and State Assemblyman Joel Miller were sponsoring bills intended to benefit fire districts with very high exempt percents.  Also, Dutchess County Legislator James C. Doxsey was sponsoring a related resolution.  All these efforts ended after my report was posted, because Fairview would not have been eligible to benefit from any of them. 

41.7 Percent Figure Has Been Unchallenged

There has been no credible challenge to the assertion that 41.7 percent of Fairview's market value for the 2008 fire tax year is tax exempt.  And how could there be?  After all, the 41.7 figure is based on a primary source of data — the 2007 assessment roll for the Fairview Fire District — the same data used in the preparation of 2008 fire tax bills.  Each assessor signs an oath every year certifying that all properties have been assessed at a uniform percentage of market value.  There simply isn't a more authoritative basis for calculating Fairview's exempt percent.  There would seem to have been no reasonable basis for questioning the 41.7 percent figure.

There is now.

There's Been a Mistake

A mistake has been made which substantially affects Fairview's exempt percent for the 2008 fire tax year.  In 2007, the Town of Poughkeepsie Assessor's Office contracted with Queens property assessment consulting firm MJW Consulting to assist it in a town-wide reassessment of properties, including most of the Fairview Fire District.  At the time, various other municipalities in the Hudson Valley had also contracted with MJW Consulting.  The Town of Poughkeepsie and many other municipalities cut ties with MJW Consulting in 2008 following allegations about the firm's performance.  But during the contract MJW Consulting reassessed many properties in Fairview, including a property with parcel ID 134689-6162-09-072632-0000.  MJW Consulting assessed this parcel, which contained a small house and other structures, at $190,500, apparently ignoring the value of these other structures.  What were the “other structures” on this parcel?  These other structures were most of the main buildings of the St. Francis Hospital complex, whose market value the previous year was over $140 million.  Oops!

Town of Poughkeepsie Assessor Kathleen Taber apparently folded MJW Consulting's assessments into the 2007 assessment roll without running a sanity check on the data.  In other words, Taber certified the 2007 assessment roll with most of the assessed value of St. Francis Hospital omitted.  For the next assessment roll, Taber found and corrected the blunder.  But it was too late to correct the 2007 assessment roll.  The blunder only affects analyses of Fairview for the 2008 fire tax year (2007 assessment roll) — both mine and Kathleen Myers'.  It certainly makes sense to adjust these analyses to correct for this blunder.

Correcting for the Blunder

According to Kathleen Taber, a reasonable guess for the assessed value of the main St. Francis property for the 2008 fire tax year is around $120 million — more than 600 times the official assessed value for that year.  Adjusting my 2008 analysis of Tax Exempt Properties in Fairview using this corrected estimate for the main St. Francis parcel shows that 47.9 percent of Fairview's market value was tax exempt for the 2008 fire tax year.  This figure happens to be the same as Fairview's exempt percent for the 2010 fire tax year, and less than half a percent more than Fairview's 2009 figure of 47.5.  In summary, Fairview's exempt percent has held remarkably steady in the last three years, ranging from 47.5 to 47.9. 

The corrected St. Francis assessment also affects the ranking of the tax exempt institutions in Fairview.  My 2008 report Tax Exempt Properties in Fairview listed St. Francis Hospital as the fourth largest not-for-profit institution in Fairview, after Marist College, Dutchess Community College, and Hudson River Psychiatric Center.  After correcting for the assessment blunder, St. Francis Hospital easily moves up to second place, with market value substantially greater than that of Dutchess Community College.

My forthcoming report, The Big Three Fire Districts of Dutchess County, provides more details of Fairview's exempt percent and up-to-date ranking figures.

Acknowledgment:  I'm grateful to Town of Poughkeepsie Assessor Kathleen Taber for patiently answering a series of email inquiries regarding the main St. Francis parcel.

Gephard Elected Fairview Fire Commissioner

The election held today for commissioner in the Fairview Fire District was officially uncontested, in the sense that only one name was on the ballot (Bob Gephard).  However, there have been persistent rumors of a secret write-in campaign, and the results appear to validate this rumor:  Of the 141 votes cast, Gephard received 110 votes, or 78 percent, and write-in “candidate” John Anspach received 29 votes, or 21 percent.  Of the remaining 2 votes, one was blank and the other was written in as “Robert L. Rogers”.  I obtained these results this evening as an official poll watcher for Gephard.

In my view, what is significant about these results is the large number of votes cast in an uncontested election, and the relatively large percentage of the votes for a single write-in “candidate”.  To better understand these results, it's necessary to know the recent history of the Fairview Fire District.

2008 Election
 
Fire district elections typically have very small turnouts, and the Fairview Fire District has been no exception — until 2008.  In early 2008, an advocacy group called Fairness for Fairview formed, and became instrumental in bringing over 400 angry residents and taxpayers to the April 24, 2008, Fairview Fire Commissioners meeting.  Most of these residents and taxpayers had no previous knowledge about fire district governance.  All they knew was that their taxes were sky high. (I was one of these residents/taxpayers.)  In the months following the April 24 meeting, some of the more outspoken residents and taxpayers continued to show up at commissioners meetings.  These newly interested residents/taxpayers continued to challenge the commissioners, who were all veterans with years or decades of experience running the fire district.  These challenges culminated in the 2008 election between incumbent Dick Martineau and resident/taxpayer Jill Line.  Line was seen as representing “newcomers” to Fairview Fire District (FFD) governance, that is, residents not previously associated with FFD.

To put the 2008 election into perspective, you need to understand that in 2007, Fairview had an uncontested election in which only 22 voters turned out. These voters tended to be the 5 commissioners and many of the firefighters and officers of the district. In the 2008 election, incumbent Martineau received 79 votes — more than three and a half times the entire voter turnout the previous year.  Martineau's total represented a concerted effort by supporters of the veteran commissioners to prevent a shift in power to the newcomers. But Martineau's support was no match for the wrath of the newcomers. A massive outpouring of voters gave Line 190 votes, or 70 percent of all votes cast.  Line's total almost certainly would have been even greater, except for the fact that dozens of voters turned away upon encountering long lines.  Many who stayed to vote stood on line for an hour or more.

2009 Election

In my view, the 2009 election shows a continuation of the conflicts between supporters of veteran commissioners and supporters of the newcomers.  Gephard is seen as representing the newcomers, while Anspach is seen as representing the veterans.  Indeed, Anspach has served on the board of fire commissioners for 30 years, including at least the last 5 as chairman.  For me and many others who've come to learn about FFD only recently, Anspach represents the heart and soul of the old guard, for better or for worse, depending on your point of view.  With Anspach leaving the board, there will be a significant power vacuum.  (Anspach plans to continue his dedicated service as Fairview volunteer and chief safety officer.)

Some may theorize from the election results that Anspach has attempted to engineer a secret campaign to win reelection.  This theory makes no sense to me.  In the first place, if Anspach had wanted to continue as commissioner, the first thing he would have done would have been to get on the ballot.  As incumbent chairman of the board, he would have had a much better chance of reelection than as a write-in candidate.  In the second place, Anspach has consistently stated throughout the campaign that he will not challenge Gephard.  And in the third place, Anspach told me after the polls closed that he did not vote for himself!  Case closed.  In effect, Anspach has given Gephard his blessing to take over as a commissioner.

Still, the 29 votes for Anspach as a write-in candidate demands an explanation.  This number of votes is considerably more than the total number of votes in the uncontested 2007 election. In my view, these votes come from the same supporters of the veteran commissioners who attempted to reelect Martineau last year, and who fear the shift in power to the newcomers.  These supporters of the status quo agreed to write in Anspach's name despite his non-candidacy.  They could reasonably have hoped that with so many votes for Anspach, Gephard could fail to gain a majority.  After all, it is this group which controlled the election until 2008.

Gephard had the political sense to be wary that he might lose this election even though he was the only candidate on the ballot.  In my view, it is only because Gephard conducted an aggressive campaign, distributing fliers to most Fairview residents, and working hard to get out the vote, that he assured himself of victory.  I can believe that many of those who showed up to vote for Gephard today didn't know that the election was “uncontested”.  Considering the secret write-in campaign, maybe it wasn't.

2010 Election

In the contest between the veterans and the newcomers, the handwriting is on the wall. In the last two elections, it's newcomers 2, veterans 0.  Next year, Commissioner Tom Ashline's term expires.  If Ashline seeks reelection and is challenged by a newcomer, he might have a difficult time winning, simply because he will be seen as representing the veterans.  His best strategy may be to show voters now that he represents their interests, in hopes that no newcomer will become a candidate to challenge him.

Perfect Calm Averts Major Fairview Fire Tax Increase

You've heard of a perfect storm, and the calm before the storm, right? I figure a perfect calm must be the opposite of a perfect storm.

The Perfect Calm in Fairview

Earlier this year, Fairview Fire District Treasurer James Passikoff announced that the District had a $600,000 fund balance at the end of 2008. This amount represents roughly 20 percent of the 2008 budget. When asked how it was possible that such a large fraction of the 2008 budget went unspent, Passikoff explained that a combination of factors were involved. Many major uncertainties in cost estimates for 2008 all ended up on the low end of their range. Passikoff agreed that what happened in 2008 was “the opposite of a perfect storm”. In other words, a perfect calm. (No, I don't mean the perfume or the relaxation exercises.)

Tax Rate Remains Constant

The proposed 2010 budget for the Fairview Fire District allocates $450,000 of this $600,000 fund balance to reduce the tax levy for 2010 to $2,832,000. Since Fairview's market value for the 2010 tax year is $566,452,002, the result is a projected fire tax rate of $5.00 per thousand dollars of market value. This tax rate is almost 2 percent lower than Fairview's 2009 fire tax rate of $5.09. In summary, Fairview's projected 2010 fire tax rate continues a trend begun in 2003, in which Fairview's fire tax rate is essentially constant, within just a few percent of $5.00 per thousand dollars of market value.

Perfect Calm Averts Tax Rate Increase

But the continuation of this trend of constant fire tax rate into 2010 is due only to the infusion of $450,000 from 2008's perfect calm. Without this infusion, Fairview's tax levy would have been $3,282,000, resulting a tax rate of $5.79 per thousand dollars of market value. This tax rate is almost 14 percent higher than Fairview's 2009 fire tax rate of $5.09. In summary, without the perfect calm of 2008, Fairview's 2010 fire tax rate would have increased nearly 14 percent.

Future Tax Rate Increases Expected

It is reasonable to assume that the Fairview Fire District will not see another perfect calm anytime soon. In addition, market values in Fairview are continuing to drop, following a national trend. Therefore, in the absence of dramatic changes, Fairview fire tax rate seems destined for significant increases in future years. This prediction is consistent with the dirty little secret of property taxes.

Fairview already has the highest fire tax rate in Dutchess County, and possibly the highest in New York State. The current analysis suggests that without some dramatic changes, Fairview taxpayers will continue to suffer this burden for at least the next few years.

Acknowledgement: My thanks to Ginny Buechele for calculating the tax rate that would result without the $450,000 infusion.

Valerie Hail Versus the Fairview Fire District

There are no winners here, folks, in the battle between Hyde Park Town Councilwoman Valerie Hail and the Commissioners of the Fairview Fire District. Their dispute is about who should take credit for the dramatic (over 14 percent) drop in the fire tax rate in 2009 in the Hyde Park portion of the Fairview Fire District. Councilwoman Hail claims on her re-election web page that her primary accomplishment is that she “reduced 2009 Fairview Fire District taxes by 14.3%”. The Fairview Fire Commissioners, through their attorney, sent her a vehement — and I mean really vehement — open letter insisting that she had no hand in doing that.

The Commissioners are certainly right about Councilwoman Hail's role. Councilwoman Hail's claim is false, false, and false. There's no other way to say it, except maybe “baseless”. Her blatant fabrication deserves full denunciation.

That said, the irony for the Commissioners is that in calling attention to Councilwoman Hail's deceit, they must also confront their own embarrassing role in the 14 percent drop in fire tax rate. The lawyer's letter handles this artfully, by saying, “It was not you who reduced taxes. It was not you who reapportioned the valuations leading to the reduction in fire taxes in the Fairview Fire District portion of Hyde Park.”

More Blame than Credit

This carefully-worded statement is factually correct, but might lead many readers to the mistaken conclusion that whoever “reapportioned the valuations leading to the reduction in fire taxes” must be the person to be commended for the 14 percent drop in fire tax rate. The person who “reapportioned the valuations” for at least the last decade is James Passikoff, CPA, Treasurer of the Fairview Fire District. The lawyer's letter was careful not to state that Passikoff should be credited with the 14 percent drop in Hyde Park's tax rate, and for good reason: Not only is this conclusion wrong, it's backwards! Passikoff is to blame for overcharging Hyde Park taxpayers 15 percent in 2008, and lesser percentages in previous years, probably in violation of New York State's real property tax law. For 2009, Passikoff did not overcharge Hyde Park taxpayers, resulting in a 14 percent drop in Hyde Park's fire tax rate. The 2009 Hyde Park fire tax did not in any way compensate for Passikoff's previous mistakes; it merely meant that Passikoff did not make additional mistakes for the 2009 tax apportionment calculation. In other words, the 14 percent drop in Hyde Park's fire tax rate is due to the fact that fire tax overcharges stopped for Hyde Park in 2009.

Fire Commissioners' Role in Apportionment Mistakes

Under New York State law, the Fairview Fire Commissioners are ultimately responsible for everything that goes on in the Fairview Fire District. As is typical in fire districts, the Fairview Fire Commissioners delegate the responsibility for all financial and tax matters to the Treasurer of the Fire District. The Commissioners are responsible for electing or re-electing a Treasurer of the Fairview Fire District at the beginning of each year, and for setting his compensation during the fall budget process. When the Fairview Fire Commissioners learned of James Passikoff's apportionment mistakes in September 2008, they unanimously agreed not to re-elect him as Treasurer for 2009. Just kidding! What they actually did was to award him an 8.7 percent raise in the 2009 proposed budget. It was only after objections by taxpayer Beverly Allyn during the public hearing that Passikoff's raise was lowered to a smaller percentage in the final 2009 budget. (Full disclosure: Beverly Allyn is my wife.) The Commissioners unanimously voted to re-elect James Passikoff as Treasurer for 2009.

My Role in Uncovering This Mess

My own role in uncovering this mess, and in the 14 percent drop in Hyde Park's fire tax, has been publicly known for more than a year, and is documented in the Unfair Apportionment section of my companion website. Here's a brief summary: On July 29, 2008, after months of my own investigation, Beverly Allyn and I met with James Passikoff and Fairview Fire Chief Tory Gallante, in order for Passikoff to explain Fairview's 2008 apportionment calculation. Beverly and I documented a large number of separate mistakes of reasoning in Passikoff's procedure. On August 4, 2008, Beverly and I met with John Anspach, Chairman of the Board of Fairview Fire Commissioners to discuss our findings. Commissioner Anspach assured us at that meeting that the apportionment mistakes would no longer occur. I published my initial report, Unfairness in Fairview -- Inequitable Apportionment of the Fire Tax Levy, on September 11, 2008, (Document #5). A subsequent report predicted a 14.7 percent decrease in Hyde Park's 2009 fire tax rate.

Although my investigations revealed that responsibility for fair apportionment lies with the Fairview Fire District Board of Commissioners and its Treasurer, and that the inequitable apportionment was probably in violation of New York State's real property law, Commissioner Anspach made repeated public statements denying these findings, eventually insisting that his denials were based on advice from Fairview Fire District attorney Bill Spampinato. Commissioner Anspach's denials ended only after I documented my own conversation with Spampinato on October 23.

Why This Rant Now?

Valerie Hail's blatant falsehood in claiming credit for a 14 percent drop in Hyde Park's taxes gave the Fairview Fire Commissioners an opportunity to set the record straight, or at least to not further distort the record. Unfortunately, the commissioners chose a statement that's at best ambiguous:

“It was not you who reduced taxes. It was not you who reapportioned the valuations leading to the reduction in fire taxes in the Fairview Fire District portion of Hyde Park.”

This statement points not to a creditworthy party, as one would reasonably suppose, but to the blameworthy party, James Passikoff, Treasurer of the Fairview Fire District, whom the Commissioners have continued to support and even to reward. In my view, it is long past due for the Fairview Fire Commissioners to take responsibility for mistakes made on their watch, and to correct them — not to cover them up.

Joel Miller's Flawed Proposals for Funding Fire Districts

New York State Assemblyman Joel Miller's latest attempt to alleviate the burdens of property taxpayers in high-tax fire districts comprises three legislative proposals:

1. Allow fire districts to bill insurance companies.
2. Subsidize fire districts through county sales tax.
3. Subsidize fire districts by introducing a college student safety fee, whose cost would be passed through to New York State.

These proposals, documented in Miller's letter to New York State Assembly Minority Leader Brian Kolb, with cover letter to Mark Bendel, Vice President of the Fairview firefighters' union, are fundamentally flawed. Miller's proposals do not address the basic problem with fire and emergency services, which is that these services cost more than they need to. New York State's current system of fire districts and fire protection districts is inefficient and wasteful. At the same time, evolution of this system since its origin nearly a century ago has resulted in great disparities among districts in both costs to taxpayers and levels of service, with costs and service levels often not related.

Consolidation Provides Efficiency and Fairness

Many government officials and thoughtful observers have come to recognize that levels of service can be increased, total costs can be reduced, and costs can be distributed more equitably by consolidating small fire districts into larger ones. In today's economy, larger enterprises have substantial advantages over smaller ones. The businesses of fire protection and emergency service can benefit greatly from economies of scale. By consolidating fire districts, the region as a whole wins with better and more consistent levels of service, and more equitable funding of fire protection and emergency services. Property taxpayers also win with lower fire taxes on average, because the total cost of these services is less.

Although consolidation of fire districts has great public benefit, restrictive New York State laws have made consolidation an impractical option — until now. As part of an initiative to reform local governments by Attorney General Andrew Cuomo, revisions to New York State laws were put in place a few months ago, so that it is now feasible for local governments such as fire districts to consolidate. It has never been easier for fire districts to consolidate than it is now.

Miller's Proposals Simply Shift Costs

None of Miller's proposals reduce the actual cost of providing fire and emergency services, but simply shift current costs away from property taxpayers to other parties. But who are these “other parties”? With Miller's proposals, it is insurance companies, county governments, and New York State. Where do all these other parties get their money? From us, homeowners (insurance), consumers (sales tax), and wage earners (state income tax). So if Miller's proposals shift costs to these other parties, we will pay for them, one way or another, even if we see our fire tax rates decrease.

Miller's Proposals Add Costs

Not only do Miller's proposals not reduce costs for fire and emergency services, but they add costs for other parties. The administrative costs of billing insurance companies for health care is already a significant (and, many say, needless) drain on patient resources. If fire districts billed insurance companies as Miller proposes, another layer of unneeded complexity and extra expense is introduced. The same holds for Miller's safety fee proposal. Saying that the insurance companies and the State pay these extra costs is just saying that we're paying them indirectly.

County-Wide Consolidation

Regarding Miller's proposal to subsidize fire districts from the county sales tax, it's worth considering the logical extreme of this policy: Suppose that Dutchess County didn't just subsidize its fire districts, but instead paid the full amount of all fire taxes for all 30 fire districts in the county! In such case, the County would be wise to conclude that since it was paying for everything in the fire districts, it should control everything in the fire districts. (“Where money goes, power flows.”) That way, the County could make changes which would reduce costs and improve levels of service at the same time. In effect, we would have one county-wide system for fire and emergency services under the county executive.

But there's no need for a new law to achieve a county-wide system for fire and emergency services. Under current law, it would be feasible — and much preferable — to simply consolidate all 30 fire districts of Dutchess County into a single county-wide fire district under a set of fire commissioners.

Miller Should Facilitate Consolidation

Consolidation of all 30 fire districts — or even consolidation of a few fire districts — will take time and effort. But the end result will be reduction of waste, improvement of service, and alleviation of inequitable fire taxes. Instead of working to prop up the current byzantine system of fire districts by making it even more convoluted, Miller should use his influence to facilitate consolidation.

Fairview's New Tax-Exempt Myth

The Fairview Fire District has the highest fire tax rate in Dutchess County, and possibly the highest in New York State. (See Document #11 at my Fairview Fire Tax website.) The question is, “Why?”

Hint: It's not only because of Fairview's tax-exempt properties, and it's not even mainly because of Fairview's tax-exempt properties. How can that be? Read on.

Fairview's Old Tax-Exempt Myth

Fairview's old tax-exempt myth, widely believed until about a year ago, was that Fairview's fire taxes are so high because up to 80 percent of Fairview is tax exempt. That myth was busted by Document #1 at my Fairview Fire Tax website. That report shows that only 42 percent of Fairview's market value was tax exempt in 2008. For 2009, the figure is 47 percent, still less than half.

Fairview's New Tax-Exempt Myth

Since the old myth was busted, it now seems to have been replaced by a new myth: Fairview's fire taxes are so high because nearly half of Fairview is tax exempt. In other words, the reasoning is the same, but “up to 80 percent” is replaced by “nearly half”. This myth is stated as fact in a widely-circulated July 29, 2009, letter by New York State Assemblyman Joel Miller to Dutchess County Executive William Steinhaus. In a widely-circulated response to Miller's letter, Mark Bendel, Vice President of Fairview's Firefighter Union, appears to disagree with most of what Miller wrote. However, regarding Miller's assertion about the reason for Fairview's high taxes, Bendel writes, “You are absolutely right.” Thus, at least two public officials with divergent views believe the new myth. I suspect that many more officials believe likewise.

What's Wrong with Fairview's New Myth?

The best that can be said for the new myth is that it isn't all wrong. For a start, it is factually correct that nearly half the market value of Fairview is tax exempt. (No, it's not half the land that's tax exempt, as Miller claims. A quick glance at the map of Fairview on the Firefighter Union's website shows that only a quarter to a third of the land area (the yellow areas) is tax exempt. Anyway, it's the market value, not the land area, that matters for calculating fire tax rate.)

Secondly, it is true that with nearly half of Fairview's market value tax exempt, Fairview's fire tax rate is significantly higher than it would otherwise be. But Fairview's tax exempt properties are not the sole reason why Fairview's taxes are so high, and it is not clear that they are the most important reason. Document #12 at my Fairview Fire Tax website shows that even if all Fairview's tax exempt properties paid their “fair share” of fire tax, Fairview’s fire tax would still be the second highest in Dutchess County.

“Second highest fire tax rate in Dutchess County” does not sound to me like “problem solved”. It sounds more like “major problem”. Indeed, when Fairview's fire tax rate is adjusted in Document #12 for the assumption that all tax exempt properties pay their “fair share” of fire tax, the adjusted Fairview fire tax rate is still two and a half times greater than the weighted average fire tax rate for Dutchess County.

Here's another way of looking at it: Fairview's fire tax rate is 4.5 times higher than the average Dutchess County fire tax rate. Of that 4.5 times, only 1.8 times is accounted for by tax exempt properties. The other 2.5 times (these are multiplicative factors, not additive terms) must be attributed to other factors. So most of Fairview's high fire tax rate must be attributed to factors other than the existence of tax-exempt properties.

Why Is Fairview's Fire Tax So High?

So we're back to the original question: What factors other than tax exempt properties might account for Fairview's high fire tax? I don't really know for sure, but here's my guess: Fairview is a very small fire district. It has only one fire house. Nevertheless, Fairview still requires an accountant, a lawyer, a full-time secretary, a fire chief, and probably many fire-fighting resources I don't know about. Fairview cannot achieve the economies of scale that larger districts can. Knowledgeable readers are encouraged to post additional and more detailed factors.

Fairview/Poughkeepsie Tentative Assessments

Q: What does May 1 mean to a property tax junkie?
A: Tentative assessments are published.

That's right, Dutchess County's Parcel Access website was updated May 1 with the tentative assessments for all real properties in the County. Before the month is over, these tentative assessments will morph into the final assessed values used to figure your school taxes in September 2009, and your county/town/fire/... taxes in February 2010.

I've taken a very informal, very unscientific look at these tentative assessments for the Poughkeepsie portion of the Fairview Fire District. Well, hopefully not completely unscientific. I've picked 74 properties from Parcel Access, and compared their tentative assessments with last year's final assessed values, which were used to figure the 2008—2009 taxes. I choose these properties partly at random, and partly to explore identifiable portions of Fairview/Poughkeepsie such as Inwood Estates and Bradley Village.

Five Percent Downward Trending

Unless you've spent the last few years in another solar system, you know that property values in the United States have been decreasing. So naturally, property values (and therefore assessed values) in the Poughkeepsie part of Fairview have tended to decrease. To account for this downward trend in portions of the real estate market, the assessor decreases all assessments in that portion by a fixed percentage. Such an adjustment is sometimes called “trending”. According to my random sample, most residential properties in the Poughkeepsie part of Fairview have had their assessments trended down by five percent. In particular, the five percent decrease applies to Inwood Estates (Eagle Lane, Hawk Lane, Hawkins Street, and the contiguous houses on Inwood Avenue and Fulton Street), what I call “West of Inwood” (Lyford Street and Waldorf Place), Summet Avenue, Buckingham Avenue, Fairview Avenue, East Cedar Street, Oakdale Avenue, Chestnut Street, Eugene Court, portions of Violet Avenue, low numbered addresses on Woodlawn Avenue, and most likely other streets I haven't looked at.

Zero Percent Downward Trending

But you did notice that I wrote “portions”, didn't you? The most interesting discovery I made is that not all portions of Fairview/Poughkeepsie were trended downward by five percent. A few portions of Fairview/Poughkeepsie were trended downward by zero percent — in other words, their tentative assessments are unchanged from last year's final assessments. Most notable in this category is Bradley Village (Peter Cooper Drive, Van Wyck Drive, Styvestandt Drive, and contiguous parts of Violet Avenue), but also Inwood Lake (see below), Lakeview Avenue, and high numbered addresses on Woodlawn Avenue.

Disclaimers

Do not apply the above analysis to your own property unless you first understand the following two disclaimers:

1. If some event between July 1, 2007, and March 1, 2009, caused your property's value to change independently of market trends (you constructed an addition, or part of your house burned down) then all bets are off. Your tentative assessment should reflect this event, which will probably have more effect than general real estate market trends.
2. For most streets and areas mentioned above, I've only looked at a very small sample of properties. My extrapolations may be wrong. (This disclaimer is essentially your standard software license, “This may not work at all; too bad for you. And no matter what, I'm not responsible.”)
   

Inwood Lake

One very small piece of good news for Fairview property owners (unless your name is “Inwood Lake, LLC”) is the completion of the first eight (out of 52) condominiums on the Inwood Lake property (corner of Inwood Avenue and East Cedar Street). These eight developed parcels add $1.1 million to the tax rolls, thus shaving 0.3 percent off everyone else's taxes. (I said it was a small piece.) The remaining 44 parcels of undeveloped land have been trended at zero percent, as noted above. Unfortunately for Inwood Lake, LLC, none of these condos appear to have been sold, so the LLC is stuck with paying the taxes on this additional $1.1 million, as well as continuing to pay the tax on the $1.4 million of mostly-undeveloped land.

How Much Do these Tentative Assessments Affect Our Property Taxes?

For most properties, not very much. Most properties seem to have been trended down five percent; only relatively few stayed the same. If your property follows the main trend, you'll be paying pretty much the same share of the total tax levy as you did last year. This does not mean that your tax bills will be the same. Your tax bill will go up or down in proportion to how much the tax levy goes up or down. However, the 2009 Hyde Park school tax levy will be 1.16 percent greater than in 2008 (unless the school budget is defeated, in which case it will be “only” 0.52 percent greater). Either way, most properties can expect to pay one half to one percent more in school tax than last year.

But if your property is one of those few (primarily in Bradley Village) whose tentative assessment is the same as last year's assessed value, you'll be paying about five percent greater share of the total tax levy than you did last year. Once again, this does not mean that your tax bills will increase five percent. Your tax bill will go up or down in proportion to how much the tax levy goes up or down plus five percent. You'll be paying an additional five percent of tax that last year was paid by your neighbors. For example, your 2009 school tax payment should go up a good five percent from last year, regardless of whether the school budget passes.

What Can You Do?

Short answer: In most cases, nothing. You do know about death and taxes, right?

Long answer: The first thing to do is find out the tentative assessment of your property from Parcel Access. Then compare this to the Total Assessed Value of your property, as given on your 2008 school or 2009 County/Town tax bill. If the tentative assessment is down five percent, and you're happy with that, then see short answer. If they're equal, check to see if you fall into the “Bradley Village camp”. In other words, check to see whether similar properties on your street or adjacent streets have unchanged assessments from last year. You won't have their tax bills, but all real property assessments are public information. You can find last year's assessments in Document #13, which I've just added to my Fairview Fire Tax website (near bottom of web page). If this check shows your property to be in the Bradley Village camp, your best bet is the short answer.

If your property is not down five percent, and you're not in the Bradley Village camp, then you might want to consider “grieving” you tentative assessment. Or maybe just grieving. The New York State Office of Real Property Services has an excellent website, including complete grievance procedures.

Introduction to this Blog

Residents and property taxpayers in the Fairview Fire District of Dutchess County, New York, have been angry for many years — many decades, actually — over unusually high fire taxes. At the same time, shortages of both volunteers and money have challenged the Fairview Fire Department to maintain desired level of service in fire and emergency medical responses. Although my wife and I have lived in Fairview for twenty years, we only got involved in fire tax issues a year ago, as described on my companion Fairview Fire Tax website.

I began the Fairview Fire Tax website in June, 2008, because I perceived that there was a dearth of verifiable facts about Fairview's problem. As I began to investigate the issues, I found that the void in understanding was filled with much misinformation. For example, it was widely believed that the reason for Fairview's high fire taxes is that 80 percent of Fairview's market value is tax exempt. My first report showed that the figure was actually only 42 percent for 2008, and not much different in other recent years. See Document #1 at Fairview Fire Tax. So although 42 percent is still high, it's not high enough to explain more than a portion of Fairview's high fire tax. (See Document #12 at Fairview Fire Tax.)

In September and October of 2008, I posted a series of documents showing an unexpected aspect of Fairview's fire tax situation: An apportionment mistake by the Fairview Fire District in violation of New York State real property tax law caused Hyde Park property owners to pay more than their fair share of fire taxes in 2008. The beneficiaries of this mistake were the Poughkeepsie property owners in Fairview, who paid less than their fair share. Other apportionment mistakes, some benefiting Hyde Park over Poughkeepsie, occurred almost every year since 2001. As a result of my investigation, these mistakes are no longer occurring, beginning with 2009. See Document #5 through Document #10 at Fairview Fire Tax.

With these Fairview-specific issues out of the way, it was time to expand my view to fire taxes in all of Dutchess County. (In reality, this is the first thing I looked at, but the last thing I published.) I verified that Fairview has the highest fire tax rate in Dutchess County. In talking with many informed local officials, I found a consensus developing that the most promising long-term solution to Fairview's problems is to consolidate Fairview with other local fire districts. Document #11 at Fairview Fire Tax compares the fire tax rates for all fire districts in Dutchess County, and shows how they might be affected by county-wide consolidation.

Subscribe for Updates to Fairview Fire Tax Website

My plan is to use this blog for relatively short posts on fire tax issues which may be of interest to property taxpayers, residents, and officials of Dutchess County. I'll also post here to announce major updates to my Fairview Fire Tax website. Thus, readers can learn of updates to my Fairview Fire Tax website by subscribing to posts.