Pawling School District Promulgates Misleading Tax Information — Again

On August 24, 2015, Pawling School District Assistant Superintendent for Finance Neysa Sensenig presented 2015-2016 Tax Rates to the school board, after which the Board approved a resolution to set the 2015-16 tax levy to the same amount as last year's tax levy. In other words, this year's tax levy increase is zero. This sounds like good news.  However, Sensenig's presentation omitted the bad news about this year's Pawling School District tax:

• The 2015 aggregate tax rate is $26.77 per thousand dollars of market value, the highest for the District in this century.
• This tax rate will most likely be the second highest 2015 tax rate of any school district in Dutchess County (after Spackenkill).
• The 2015 tax rate increase is 12.17 percent, the second highest tax rate increase for the District in the last decade. (The 2010 tax rate increase was 19.0 percent.)  

In my view, the public is mislead by the omission of this crucial bad news. It's especially ironic that a presentation entitled 2015-2016 Tax Rates didn't actually include the aggregate tax rate or its increase. But it's worse than that. Sensenig's presentation also commits mistakes in representing changes in tax rates for municipal segments (towns), and it presents data that makes no sense. These mistakes indicate that Sensenig does not understand how to properly manipulate property tax data in the presence of fractional value assessing — even though the issue had already been explained in one of my recent blog posts. It would not surprise me if Pawling's Board of Education also does not understand this issue.

Aggregate Tax Rate — Missing

Let's start with the most basic of questions: How steeply is the Pawling School District taxing its tax base for the 2015-2016 year? That is, what is the District's aggregate tax rate — the District's tax levy divided by the District's taxable market value? (In case you don't know why this tax rate is so important, see The Tax Rate Is All That Matters.)

In fairness, the 2015-2016 Tax Rates presentation actually does contain the District's aggregate tax rate, but it is so obscured that, for all practical purposes, it's not accessible. You won't find the aggregate tax rate in the main PowerPoint part of the presentation (the first 9 pages of the PDF), where the most important information is expected. You'll only find the aggregate tax rate immersed in a tax calculation chart comprising 6 rows and 11 columns of numbers, on page 13 of the PDF. It's shown in the last row of column 9 as  26.76701, and rounded just below it as 26.77. The chart does not clearly identify what this number represents, nor does it clearly indicate the units of measure, but it's actually $26.77 dollars per thousand dollars of market value (what Sensenig calls “full value assessment”). A glance at the Pawling School District Tax History shows that this is the highest tax rate for the District in over a decade. In fact, it's actually the highest tax rate for the Pawling School District in this century.

Aggregate Tax Rate Increase — Missing

Next question: How does the Pawling School District's 2015 tax rate of $26.77 compare with that of last year? That is, what is the percent increase in the tax rate? The 2015-2016 Tax Rates presentation does not answer this question.

One could calculate the percent increase from the presentation if the presentation contained last year's tax rate. One might think that one could get last year's tax rate from the same tax calculation sheet (page 13 of the PDF). That's because Column 10 on that sheet — the very next column after the 2015 rates — claims to contain the 2014 rates. And indeed it does, except that the given 2014 aggregate tax rate (the TOTALS line of column 10) is the wrong value. It is given as 26.882174, and rounded just below it as 26.88. The correct value — the 2014 tax levy divided by the 2014 taxable market value — is $23.86, as can be seen from the Pawling School District Tax History. Comparing the correct tax rates shows that the Pawling School tax rate has increased a whopping 12.17 percent for the 2015-2016 year. This is the second greatest tax rate increase in the history of the Pawling School District since 2000. It is also a far greater increase than that of any school district in Dutchess County last year. (Spackenkill had the greatest tax rate increase last year, at “only” 6.9 percent.) See 2014 School District Tax Rate Rankings.

Wait a minute, you might say. How can the Pawling School District's tax rate increase 12.17 percent, when the tax levy increased zero percent? Well, the tax rate measures how steeply taxpayers' wealth is taxed, and taxpayers' wealth — measured by the taxable market value of property — decreased 10.85 percent in the last year. The biggest component of this market value decrease is in the Town of Pawling, where the taxable market value dropped 11.51 percent.

But how could it be that Pawling's taxable market value dropped 11.51 percent since last year? The Pawling municipal segment's taxable assessed value is $522 million, a value that has hardly budged at all in the last 5 years. Right, but the Town of Pawling's equalization rate has been steadily increasing since 2009, and it incurred a dramatic increase this year, from 44.86 percent to 50.69 percent. Market value is assessed value divided by equalization rate.

One must understand that property tax in New York State (and in most other states) is based on market value, not on assessed value, despite what many property owners — and apparently many government officials — seem to believe. Fractional value assessing, that is, assessing property at an equalization rate other than 100 percent, is a Really Bad Idea, exactly because of its confounding effect on the public, and even on public officials. For more on this, see Full Value versus Fractional Value Assessing — A Comparison. Unfortunately, the Town of Pawling is still one of the few remaining towns in Dutchess County which practices fractional value assessing.

The presentation's tax calculation chart's stated tax rate increase (last row of column 11 on page 13 of the PDF) of -0.43 percent — essentially a small decrease — makes no sense. When the tax levy remains constant and the taxable market value decreases, the tax rate must increase.

Pawling School officials may have intentionally avoided reporting the aggregate tax rate and its increase, since these parameters are the ones that show how bad the situation really is for taxpayers. The officials can get away with this because the public has such a poor understanding of property taxes. For more on this, see The Dirty Little Secret of Property Taxes.

Municipal Segment Tax Rate Increases Are Wrong

Under ordinary circumstances, the Pawling School District's aggregate tax rate is also the rate at which each taxpayer will be billed, and the aggregate tax rate increase is also the tax rate increase each taxpayer will see. This is how property taxes work under ordinary circumstances for a school district like Pawling which utilizes neither the homestead tax option nor the apportionment option. (For detailed discussion of these options, see page 4 of 2014 School District Tax Rate Rankings.)

However, the circumstances in the Pawling School District were not ordinary last year, and they aren't ordinary this year either. Last year, the District committed an apportionment mistake, underbilling taxpayers in the Town of Pawling and overbilling taxpayers in the four other municipal segments. Pawling taxpayers paid at a low-ball rate, while all other taxpayers paid at a high-ball rate. Thus, Pawling taxpayers saw a low-ball tax rate increase, while all other taxpayers saw a high-ball tax rate increase. All this is explained in detail here.

The good news is that the 2015-2016 Tax Rates presentation correctly compensates this year for last year's apportionment mistake. That is, the extra quarter million dollars mistakenly billed to municipal segments other than the Town of Pawling last year have been correctly apportioned back to Town of Pawling taxpayers this year, thus overbilling Town of Pawling taxpayers this year by the same amount they were underbilled last year. Because of last year's mistake and this year's compensation for last year's mistake, the aggregate tax rate and aggregate tax rate increase once again will not describe what any taxpayers will experience.

The bad news is that the 2015-2016 Tax Rates presentation for municipal segments' tax rates (table on page 6) is misleading, and its tax rate increases are just plain wrong. (Same with the table on page 5.) The problem is that the tax rates in columns 2 and 3 of the presentation are the rates per thousand dollars of assessed value, which makes no sense in this context. Tax rates per thousand dollars of assessed value cannot be compared when they have different equalization rates, for the same reason that assessed values cannot be added when they have different equalization rates. Comparison can only be made when tax rates are equalized — converted to a market value basis — as in the following table:

Pawling School District Tax Rate Increases
Municipal Segment	Tax Rate per $K of Market Value		Percent Tax Rate Increase
	2014	2015	Correct Value	Presentation
Beekman	$26.88	$23.68	-11.93%	-11.93%
Dover	$26.88	$23.75	-11.66%	-11.27%
East Fishkill	$26.88	$23.66	-11.97%	-11.97%
Pawling	$23.65	$27.01	14.24%	1.10%
Patterson	$26.88	$23.67	-11.93%	-11.07%
Aggregate	$23.86	$26.77	12.17%	-0.43%

Notice that Sensenig's calculation of percent tax rate increase (last column) gives the correct value (green background) for Beekman and East Fishkill. That's because Beekman and East Fishkill have the same equalization rate (100%) for 2014 and 2015. Dover and Pawling's equalization rates changed from 2014 to 2015, which is why the presentation's results are incorrect (red background). The more the equalization rate changes, the more difference it makes. Pawling's equalization rate changed dramatically, as already noted, so the presentation's result is way off. Taxpayers in the Pawling municipal segment will see a 14.24 percent tax rate increase this year, not the 1.10 percent increase shown in the presentation. (Regarding Patterson, which has been at 100% equalization rate for many years, it's not clear why the presentation shows its 2014 tax rate as $26.62 rather than $26.88, thereby getting an incorrect tax rate increase.)

Overconfident Officials Unintentionally Mislead a Gullible Public

On August 21, 2015, I emailed Pawling School District Assistant Superintendent for Finance Neysa Sensenig, copying the Pawling School Board, saying that she, and possible the Board, misunderstands some property tax concepts. I included a link to my recent blog post, which provides evidence of this misunderstanding. Part of this evidence is that she added assessed values with different equalization rates, producing a garbage result. My email seems to have had no effect, since Ms. Sensenig repeated the same mistake on page 13 of the presentation PDF (bottom of first column). The mistake was compounded with the presentation's incorrect municipal segment tax rate increases. The public interest is not well served by the Pawling School District's 2015-2016 Tax Rates presentation, which omits the aggregate tax rate and its increase, which promulgates incorrect municipal segment tax rate increases, and which repeats easily-omitted calculations that produce garbage results.

I wish I could report that the Pawling School District is the only local taxing jurisdiction in Dutchess County to misunderstand fractional value assessing, resulting in the promulgation of misleading tax information. Unfortunately, the Hyde Park School District, the Town of Hyde Park, the Town of Pleasant Valley, the Fairview Fire District, and even the Poughkeepsie Journal have made similar mistakes. The officials responsible for these mistakes include at least three CPAs, none of whom seemed able to grasp that they had made a mistake even when confronted with the evidence. The officials responsible for these past mistakes have generally been so confident of their basic numeracy skills that they saw no need to check their work — or my critique of their work — with an authoritative third party, such as the good folks at the Dutchess County Real Property Tax Service Agency or the New York State Department of Taxation and Finance. Now overconfident officials at the Pawling School District have joined this list of errant number crunchers.

Pawling School District's 2014 Tax Apportionment Mistake — School District Viewpoint

This third of three posts on the Pawling School District describes the immediate cause of the 2014 tax apportionment mistake by the Pawling School District. But looking deeper, the Pawling School Board's 8/29/2014 Resolution to confirm tax rolls and authorize tax levy provides evidence that the District's Assistant Superintendent for Finance and possibly also the School Board misunderstands some property tax concepts. Suggestions to improve the Resolution for this year are provided at the end of this post. The first post presents the recent history of the Pawling School District's property taxes. The second post describes in detail how the District's mistake affected taxpayers.

The previous post showed how property taxpayers in the Beekman, Dover, East Fishkill, and Patterson municipal segments of the Pawling School District saw a whopping 18.6 percent increase in their school taxes in 2014 (compared with 2013), when they should have seen a 5.3 percent increase. Meanwhile, taxpayers in the Pawling municipal segment saw only a 4.4 percent increase, when they should have seen a 5.3 percent increase. This unequal distribution of the tax levy by the Pawling School District violates New York State Real Property Tax Law.

OK, so how did this mistake come about in the first place? The explanation is very simple. It involves something I'm loathe to mention: the dreaded equalization rate. Not because equalization rate is difficult to understand, but because so few people seem comfortable with the concept. Readers not comfortable with the idea of equalization rate are encouraged to review it, for example by reading my “assessing” blog post Full Value versus Fractional Value Assessing — A Comparison, to which I will refer frequently in what follows.

Equalization Rate Versus Level of Assessment

One detail not fully explored in my assessing post is the relationship between equalization rate and level of assessment. Both terms refer to the ratio of assessed value to market value (also known as full value, true value, etc.). The only difference is who determines this ratio and when. In an assessing unit that practices fractional value assessing, the local assessor sets the level of assessment according to her analysis of market conditions before finalizing and certifying the yearly assessment (generally on July 1 of each year). A few weeks thereafter, the New York State Office of Real Property Services (ORPS) sets the equalization rate for the assessing unit. The State's determination of the equalization rate essentially overrides the local assessor's determination of the level of assessment, if they are different. This fact encourages local assessors to coordinate with the State before setting their level of assessment, so that it will not be changed by the State. That way, property owners won't be jerked around by the government, being told by their local assessor on July 1 that the market value of their property is a certain amount, and then effectively being told a few weeks later by the State that, no, the market value of their property is really a different amount. More to the point, this principle applies not just to individual property owners, but to entire towns and municipal segments. Most often, such coordination is successful, and the State essentially just endorses the level of assessment set by the local assessor.

Pawling's History of Level of Assessment and Equalization Rate

The Town of Pawling is one of the few assessing units in Dutchess County that still practices fractional value assessing. The State has accepted the Pawling Assessor's level of assessment every year since 2004 — except for 2013 and 2014, which are shown in the following table:

Town of Pawling
Year	Level of Assessment	Equalization Rate	Date Established
2013	48.92%	43.31%	7/23/2013
2014	51.00%	44.86%	7/28/2014

(Pawling's equalization rate history can be found in the ORPS database by selecting Dutchess, then Town of Pawling, then Current equalization information.) The fact that the State adjusted the Pawling assessor's estimate downward in 2013 and 2014 simply means that the State determined that the market value of the Town of Pawling is greater than what the Pawling Assessor said it was in those years. This in itself is not a problem.

Pawling School District Apportionment Calculation

Each year, when the Pawling School District's Assistant Superintendent for Finance performs the tax apportionment calculation, she simply uses the State's equalization rate for Pawling (as with all other municipal segments) to compute the market value of each municipal segment. My analysis shows that the Pawling School District has had a flawless record in this regard for every year between 2004 and 2013, apportioning the tax levy to each municipal segment correctly down to the dollar. Yes, even in 2013, when the State adjusted Pawling's assessments, the correct calculation was done.

Equalization Rate Not Used in 2014

My analysis also shows that in 2014, the state equalization rate of 44.86 percent for Pawling was not used, but Pawling's level of assessment of 51.00 percent was mistakenly used instead. Pawling School District Assistant Superintendent for Finance Neysa Sensenig, who prepared the Pawling School District Board of Education's 8/28/2014 Resolution to confirm tax rolls and authorize tax levy, told me she has accepted responsibility for making this mistake, and that the facts of the matter are well known to all interested parties. She is adamant that she will not be making this mistake again. In addition, a plan is in place — coordinated with the State Office of Real Property Services — to adjust the 2015 Pawling School District's tax apportionment to compensate for the 2014 mistake. Presumably this will be done by adding an excess tax levy of $253,697 to the Pawling municipal segment, and subtracting the same amount from the tax levy of the other municipal segments, essentially just the reverse of what happened in 2014, as described in my previous post.

8/29/2014 Resolution is Flawed

These remedies are good news — as far as they go. However, the Pawling School Board's 8/29/2014 Resolution provides evidence that Ms. Sensenig and possibly also the School Board misunderstand some property tax concepts. The remainder of this post describes this evidence, and suggests how improvements can be made.

Resolution Table Heading Phrase “By Towns” is Gratuitous

Let's start off easy: The headings of the last three columns of the Resolution's table end in the phrase “... by Towns”. This phrase seems gratuitous in the present context, and seems especially inapplicable to the last row called “Total”. More on that last row below. In what follows, I'll assume “by Towns” has been removed.

Total Assessed Valuations — NOT

The heading for Column 3 is labeled “Total Assessed Valuations”, but that's not what the values are. The values are Taxable Assessed Valuations. Total assessed valuations would be larger values, because they would include tax exempt property such as schools, churches, government buildings, etc., which play no role in property tax apportionment. In what follows, I'll assume this heading is changed to “Taxable Assessed Valuations”.

Equalized Tax Rate — NOT

The heading for Column 4 is labeled “Equalized Tax Rate”, but that's not what the values are. Equalized tax rate is just another way of saying true value tax rate, full value tax rate, etc. If the values had been equalized tax rates, they would all be equal to $26.88217 per thousand dollars of market value. The values in Column 4 are actually un-equalized, or conventional tax rate, measured in dollars per thousand dollars of assessed value. The difference between market value and assessed value is exactly the difference between equalized tax rate and un-equalized tax rate. For further clarification, see my assessing post.

Total for “Taxable Assessed Valuations” is Garbage

There just isn't a polite way to say this: The value 594,770,851 in the last row of column 3 is garbage, or to borrow a phrase, it's not even wrong. Yes, the numbers are added correctly. The problem is that adding these numbers doesn't make any sense. Referring again to my assessing post, the “total” of column 3 is like saying you paid 28,000 Indian rupees for an iPad, and you paid 40,000 Japanese yen for another iPad, so you bought two iPads for 68,000 — what?

You might think, well, all the numbers in Column 3 are dollars, right? Wrong! That's just what's so convoluted about the whole concept of fractional value assessing. Assessed values are conventionally labeled as “dollars”, but they aren't really dollars. They're actually discounted dollars in which the discounts are the equalization rates. Assessed values with different equalization rates (as in Column 3) cannot be added together, any more than prices in Indian rupees and Japanese yen can be added together. It only makes sense to add prices after they have been converted to a common currency. Similarly, it only makes sense to add property values after they have been converted to a “common currency”. The obvious “common currency” for property values is market value, which is assessed value divided by equalization rate.

Summary of Suggested Changes

The above suggested improvements in the table of the Pawling School Board's 8/29/2014 Resolution can be summarized as follows:

1. Change the heading for Column 3 to Taxable Assessed Valuations.
2. Change the heading for Column 4 to Tax Rate, or even better, Tax Rate Per Thousand Dollars of Assessed Value. While you're at it, you might as well get rid of the word “equalized” in the line beginning “Therefore be it resolved ...”.
3. Simplify the heading for Column 4 as simply Tax Levy.
4. Get rid of the total value in the last row of Column 3. Just get rid of it. 

Pawling School District's 2014 Tax Apportionment Mistake — Taxpayer Viewpoint

This second of three posts on the Pawling School District (I'd originally hoped to complete this topic in two posts) describes how the 2014 tax apportionment mistake by the Pawling School District affects taxpayers. Briefly, this mistake caused property tax bills to overstate or understate the amount of tax due, depending upon the town in which the property lies. The first post presented the recent history of the Pawling School District's property taxes. A forthcoming post will discuss the apportionment mistake from the school district's viewpoint.

When Pawling School District taxpayers examined their tax bills in September, 2014, a few of them were surprised to find that their true value tax rates had increased a whopping 18.6 percent since 2013. But most others found that their true value tax rates had only increased a more modest 4.4 percent. Both these increases were mistakes. Although the District's total tax levy of $29,799,211 is as intended by the school board, the distribution of this tax among taxpayers was incorrect for all taxpayers. All taxpayers should have seen a true value tax rate increase of 5.3 percent. This post describes in detail the effect of this mistake on taxpayers.

Municipal Segments

The first thing to understand is that, like most school districts in Dutchess County, the Pawling School District comprises portions of more than one town. In addition to most of the Town of Pawling, the Pawling School District includes small portions of the Towns of Beekman, Dover, East Fishkill, and even the Town of Patterson in Putnam County. One might think that all of the Town of Pawling is included in the Pawling School District, but even that isn't true. Fully $6.3 million of taxable market value in the Town of Pawling (as of the July 1, 2014 assessments) is in the Arlington School District — not the Pawling School District. For taxing purposes, the various portions of Towns within a school district are sometimes referred to as municipal segments.

Tax Levy Should Be Proportional to Taxable Market Value

The second thing to understand is that New York State Real Property Tax Law requires the Pawling School District to distribute or apportion its tax levy (the amount it bills property taxpayers) among its municipal segments in such a way that all taxpayers are billed at the same true value tax rate. True value tax rate is simply the tax levy divided by the taxable market value of the property (not the taxable assessed value). Another way of saying this is that all taxpayers are to be billed in proportion to the value of their property on the open market (after accounting for STAR and other similar exemptions), with the same proportion being used everywhere in the District.

Town of Pawling Versus Other Towns

The following table shows what happened in 2014 with apportionment in the Pawling School District. Most of the data for Columns 2,  3, and 5 was derived from the tax rate pamphlets provided by Dutchess County's Real Property Tax Service Agency. However, data for the Patterson municipal segment is not available from this source. Pawling School District Assistant Superintendent for Finance Neysa Sensenig graciously provided me with the Patterson assessed value and tax levy data needed for these columns.

2014 Pawling School District Tax Levy Apportionment
Municipal Segments	Percent Taxable Market Value	Percent Tax Levy	Tax Rate Per $K of Market Value	Percent Tax Rate Increase	Excess Tax Rate Per $K of Market Value	Excess Tax Levy	Percent Excess Tax
Pawling	93.3%	92.4%	$23.65	4.4%	-$0.22	-$253,697	-0.9%
all others	6.7%	7.6%	$26.88	18.6%	$3.02	$253,697	12.6%
All	100%	100%	$23.86	5.3%	$0	$0	0%

As might be expected, most of the Pawling School District's tax base — in fact 93.3 percent — is in the Town of Pawling, with the remainder — 6.7 percent — divided among the 4 other municipal segments, as shown in Column 2 of the above table. If the Pawling School District's apportionment had been figured correctly, the percentages of tax levy billed to the Town of Pawling versus the other municipal segments (Column 3) would have been the same as in Column 2, namely 93.3 percent and 6.7 percent, respectively.

Tax Levy Mismatch With Taxable Market Value Shows Apportionment Mistake

But Column 3 is not the same as Column 2, indicating an apportionment mistake in violation of New York State Real Property Tax Law. Only 92.4 percent of the tax levy was distributed to the Pawling municipal segment, with the remaining 7.6 percent distributed to the other municipal segments. It turns out that within these other municipal segments, all taxpayers were billed at the same true value tax rate — they just weren't billed at the same tax rate as the Town of Pawling's taxpayers.

When a Dog Wags Its Tail ...

So instead of all taxpayers being billed at the aggregate $23.86 rate (last row of Column 4), the Pawling taxpayers were billed at only $23.65, while all others were billed at $26.88 (Column 4). Column 5 shows that instead of all taxpayers seeing a 5.3 percent tax rate increase, Pawling taxpayers saw only a 4.4 percent tax rate increase, while all others saw a whopping 18.6 percent increase. Why this disproportionate effect? When a dog wags its tail, the dog shakes a little bit, but the tail shakes a whole lot. The Town of Pawling is the dog; the other municipal segments are the tail.

Excess Tax Rate

Another way to look at the disproportionate effect of the apportionment mistake is to compare the true value tax rates of the municipal segments to what they should have been. Column 6 shows that Town of Pawling taxpayers got a small break of $0.22 off their tax rate, whereas all the other municipal segments saw an extra tax based on a rate of $3.02 per thousand dollars of market value. This extra tax can be compared with the 2014 $3.65 tax rate for the Dutchess County Government, which all these property taxpayers paid the previous spring. So it's as if these taxpayers had to pay the equivalent of 83 percent of a second Dutchess County Government tax in the same year.

Excess Tax Levy

Column 7 shows yet another way to measure the mistake: $253,697 — fully a quarter million dollars of tax — was mistakenly shifted from the many (Town of Pawling) to the few (other municipal segments). This shift represents only 0.9 percent of the tax in the Town of Pawling, but 12.6 percent of the tax in the other municipal segments, as shown in Column 8. Just more manifestations of the dog wagging its tail.

What would correct apportionment have looked like?

Had it not been for the apportionment mistake, that is, if Column 3 were equal to Column 2, then all the entries in Columns 4 through 8 for “Pawling” and “all others” would have been the same as in the last row (“All”) of those columns.

OK, so how did this mistake come about in the first place? That is the subject of a forthcoming post.

Pawling School District Tax History

This first of two posts on the Pawling School District presents the recent history of the District's property taxes. A subsequent post will describe the 2014 tax apportionment mistake committed by the Pawling School District, in violation of New York State Real Property Tax Law, which caused property tax bills to overstate or understate the amount of tax due, depending upon the town in which the property lies.

The following table summarizes the Pawling School District's recent tax history. Most of the data for this table was derived from the tax rate pamphlets provided by Dutchess County's Real Property Tax Service Agency. However, data for the portion of the Pawling School District in the Town of Patterson (Putnam County) is not available from this source. Pawling School District Assistant Superintendent for Finance Neysa Sensenig graciously provided me with the Patterson assessed value and tax levy data needed to complete this table.

Pawling School District
Year of Tax Bill	Taxable Market Value		Tax Levy		Tax Rate
	Market Value	Percent Increase	Tax Levy	Percent Increase	Tax Rate per $K of Market Value	Percent Increase
2004	$1,217,637,391		$19,689,971		$16.17
2005	$1,404,750,438	15.4%	$21,805,618	10.7%	$15.52	-4.0%
2006	$1,556,342,677	10.8%	$23,219,196	6.5%	$14.92	-3.9%
2007	$1,717,266,533	10.3%	$24,787,813	6.8%	$14.43	-3.2%
2008	$1,794,131,769	4.5%	$26,262,727	6.0%	$14.64	1.4%
2009	$1,708,746,526	-4.8%	$27,545,191	4.9%	$16.12	10.1%
2010	$1,457,903,591	-14.7%	$27,975,658	1.6%	$19.19	19.0%
2011	$1,399,836,368	-4.0%	$29,338,567	4.9%	$20.96	9.2%
2012	$1,381,982,151	-1.3%	$29,629,238	1.0%	$21.44	2.3%
2013	$1,289,459,789	-6.7%	$29,219,136	-1.4%	$22.66	5.7%
2014	$1,248,731,004	-3.2%	$29,799,211	2.0%	$23.86	5.3%

Taxable Market Value

It is helpful to visualize the Pawling School District's taxable market value (column 2 of the above table) as a chart. The chart below shows clearly the increase in property values through 2008, followed by the economic meltdown which has decreased property values every year since then. The Pawling School District's experience follows that of Dutchess County as a whole (see first chart in my recent post Dutchess County Gov't Tax Rate Keeps Climbing), and indeed that of most of New York State, and even most of the country. Note that the Pawling School District's taxable market value for the 2014 tax is only slightly (2.6%) greater than that for 2004.

This same data can be visualized in terms of the yearly increase in taxable market value (column 3 of the above table):

It should be noted that all these market values lag tax bills by a year and three months. For example, for tax bills to be paid on October 2, 2014, the corresponding market values are as of July 1, 2013.

Tax Levy

The Pawling School District's tax levy — the total amount billed to property taxpayers (column 4 in the above table) — can be visualized as follows:

Although the Pawling School District's tax base (taxable market value) increased only 2.6 percent in the last decade, the above chart shows the tax levy increasing 51.3 percent in the same time period. The tax levy has increased every year, except for a 1.4 percent decrease from 2012 to 2013, as shown in the following chart (column 5 of the above table):

Tax Rate

As I have written many times before in this space, tax rate, that is, true value tax rate expressed in dollars per thousand dollars of market value, is a useful way of comparing taxes among jurisdictions, among years, and even among different kinds of property taxes. For a given year, tax rate (column 6 of the above table) is simply tax levy divided by taxable market value. The following chart depicts Pawling School District tax rate for each of the last 11 years: 

True value tax rate measures how steeply your personal wealth, as measured by the taxable market value of your property, is being taxed. The above chart shows that your wealth has been taxed more steeply every year since 2007 — just before the economic meltdown. Tax rates for the years 2000 through 2003 (not displayed in this post) are mostly higher than for 2004, but never higher than $17.41. This means that in 2010, your wealth was taxed at a steeper rate than ever before in this millennium. Since then, the tax rate has increased every year. The following chart (column 7 of the above table) shows the tax rate changes in more detail:

All tax rates in this post describe both how steeply the Pawling School District taxes its tax base and how steeply property owners are taxed (after accounting for STAR and other similar exemptions). That's because the Pawling School District utilizes neither the homestead tax option nor the apportionment option (for explanation of these options, see my 2014 School District Tax Rate Rankings).

Well, actually, this isn't quite true for 2014. The 2014 tax rate only describes how  steeply the Pawling School District taxes its tax base. It does not describe how steeply property owners were taxed in 2014. That's because in 2014, the Pawling School District made a mistake in apportioning the tax levy, which caused property tax bills to overstate or understate the amount of tax due, depending upon the town in which the property lies. This mistake, which violates New York State Real Property Tax Law, will be described in detail in a forthcoming post.

Careful readers will notice a slight discrepancy between the Pawling School District's aggregate tax rate of $23.86 reported here and the $23.82 rate reported last month in my 2014 School District Tax Rate Rankings). That's because last month's tax rates did not take into account the Town of Patterson segment of the Pawling School District. Ordinarily, the Town of Patterson's taxes should make no difference in the tax rate. It's only because of Pawling's 2014 apportionment error that the difference appears. This post's aggregate tax rate of $23.86 is correct. Similarly, this post's 2014 tax rate increase of 5.3 percent is correct, not the 5.1 percent reported last month. These small corrections do not affect last month's school district rankings.

The author is grateful to Pawling School District Assistant Superintendent for Finance Neysa Sensenig for her kindnesses in accommodating my requests for data and other information.

School District Tax Rate Rankings

In April of 2011, I posted a series of articles comparing the tax rates of all school districts in Dutchess County. On April 28, 2011, I consolidated these articles into an 18-page report called School District Tax Rate Comparisons.

In 2012, the New York State property tax cap went into effect. The tax cap, which was intended to limit the increases in property taxes by local governments, was supported by taxpayers, but opposed by local governments, especially by school districts.

My new 19-page report, 2014 School District Tax Rate Rankings, updates the tax rate comparisons of four years ago with the most recent school tax information. Main results:

• School tax rates have dramatically increased since four years ago, due to both tax levy increases and property value decreases.
• Relative rankings of school tax rates have hardly changed since four years ago.
• Year-to-year school tax rate increases are dramatically lower than four years ago. This slowed growth may be due to the property tax cap.

Like the earlier report, the 2014 report provides detailed tax rate information for every school district in Dutchess County in both tabular and chart form, in a format allowing easy comparisons to be made. The report explains how the homestead tax option, the apportionment option, and STAR exemptions complicate school district tax rate comparisons. Separate comparisons are provided from the viewpoint of school districts and taxpayers — both homes and businesses.

Hyde Park School District Promulgates Misleading Tax Information

When it comes to understanding how property taxes work, it is amazing how many government officials who should know better get it wrong. The problem is always the same: The errant officials erroneously believe that assessed values have intrinsic meaning, when in reality assessed values mean nothing with respect to property tax until converted to market values using the appropriate equalization rates. At least three local municipalities have made this mistake, as documented here, here, and here. Now the Hyde Park School District can be added to this list of notoriety.

On August 23, 2012, Hyde Park School District Assistant Superintendent for Business Wayne Kurlander presented Tax Levy Calculations, Rates to the Board of Education. Unfortunately, this presentation gives a misleading picture of changes in the school district's property values and tax rate. Even more unfortunately, the Poughkeepsie Journal has uncritically reported the claims in Kurlander's presentation, leading to a sense of unfairness where no unfairness actually exists.

Tax Rate Change Calculation Mistake

Kurlander's “Tax Rate Changes” table on page 5 of his presentation calculates a year-to-year difference of $0.78 (column 4) between Hyde Park's tax rates per thousand dollars of assessed value. This calculation makes no sense, because Hyde Park's equalization rates are different (54% versus 56%) for the two years being compared. It would be like subtracting 50 miles per hour from 100 kilometers per hour, and getting 50 “something” per hour. A meaningful calculation requires that the two tax rates first be converted to comparable units before subtraction. An obvious way to do this is to multiply each tax rate by its corresponding equalization rate, thus yielding true value tax rates.

Since the $0.78 difference makes no sense, neither does the 2.21% rate change (column 5). When the correct calculation is performed, Hyde Park's true value tax rate change is of course 6.00% — the same as for all the other towns!

The Poughkeepsie Journal took Kurlander's flawed calculation to formulate a misleading headline, Some in Hyde Park face 6% tax hike (August 30, page 1 of Mid-Hudson section). In reality, it's not “some”, it's “all”. The story's subtitle is also misleading: Assessed value drop forces school board to hike 4 towns' rates. In reality, it's not “4 towns'” but “all 5 towns'” in the Hyde Park School District. The story's lead sentence is unambiguous: “School tax rates for most town homeowners will increase by 2.2 percent this school year.” This statement is flat out false. A correct statement would read, “School tax rates for all homeowners will increase by 6 percent this school year.” Of course, none of the corrected statements sound as sensational as the incorrect and misleading ones. But in the newspaper's defense, Journal reporter John Davis did nothing more than uncritically elaborate Kurlander's presentation.

Superintendent's Statement is Incorrect

Kurlander is not the only Hyde Park School District official who misunderstands how tax rates work. Hyde Park School Superintendent Greer Fischer is quoted in the Poughkeepsie Journal story as saying, “That it's been 16 years since the Town of Hyde Park has gone through an assessment does make for a disparity in the rate changes.”

No, it does not. There is no disparity in the rate changes this year, and there hasn't been a disparity in the rate changes in the last ten years. Each year, all five towns in the Hyde Park School District have paid the same true value tax rate. In other words, every property owner in the District pays the same proportion of his property’s taxable market value, regardless of Town. This simple fact is a basic principle of New York State Real Property Tax Law. Another way to state this basic principle is as follows: Two properties in different Towns with the same taxable market value will pay the same Hyde Park school tax. This statement is true this year, it was true last year, and it's been true for each of the last 10 years. Since the tax rates are the same in all the Towns, so are the tax rate changes. That's why my recent post Hyde Park School District Tax Rate Is Highest in Millennium lists only one tax rate and only one tax rate change for each year.

Assessed Value Change Calculation Mistake

Kurlander's “Comparison of Taxable Assessed Values” table on page 12 of his presentation makes a similar conceptual error: The Hyde Park entry (second row) compares assessed values from two different years with different equalization rates. The listed percent change of -0.48% for Hyde Park makes no sense, for the same reason that comparing pounds to kilograms makes no sense. A meaningful calculation requires that the assessed values first be converted to comparable units. An obvious way to do this is to divide each assessed value by its corresponding equalization rate, thus yielding taxable market value. When the correct calculation is performed, Hyde Park's percent change is -4.04%, not -0.48%.

Meaningful Tax Information is Essential

My purpose in all property tax investigations is not to embarrass government officials, but to assure that property owners, residents, government officials, and other stakeholders have meaningful, accurate information about taxes. So I was glad when Kurlander granted me the opportunity to meet with him and Hyde Park School District Treasurer Linda Steinberg on September 7. Although we had a lengthy and cordial interchange, I was not able to convince Kurlander that he had made any mistake. At Kurlander's request, I promptly emailed them all my backup calculations. Unfortunately, I've heard nothing from him since then, despite numerous contact attempts. I will update this post to reflect any meaningful Hyde Park School District feedback.

UPDATE 11/5/2012 - District May Change Tax Message

I'm pleased to report that a prominent member of the Hyde Park School District Board of Education has come to understand that the District's current way of explaining school tax is problematic, and that a more consistent, coherent, and technically accurate approach is needed. I'm hopeful that I won't need to write a post such as this on the Hyde Park School District next year.

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.

BOCES Is Indifferent to the Accuracy of its Property Tax Data

Every year, the Dutchess County Board of Cooperative Educational Services (BOCES) publishes two comprehensive documents, a Contract Analysis book and a Fact Book, both for assisting school district administrators in their budgeting processes and in negotiating with labor unions.  Each document consists almost exclusively of tabulations comparing numerous parameters for the 13 school districts in Dutchess County. 

• Contract Analysis 2010-2011, published January 2011, is a 157-page document, most of whose tables relate to salaries and benefits of school district employees.  However, a 35-page section called Financial contains district-wide tables related to budgets, costs per student, costs per expense category, and, yes, property tax information, including assessed values, tax levies, and tax rates.  Naturally, that's the part I've focused on.
• Dutchess County Fact Book 2005-2006 through 2009-2010, published January 2011, is a 69-page document containing additional financial information, including more extensive property tax tables than appear in the Contract Analysis book.

In examining the above documents, I looked first at the current school district true value tax rates for the 13 school districts in Dutchess County, listed on page 144 of the Contract Analysis PDF (page 32 of the Financial section).  Comparing with my own analysis, I noticed significant discrepancies in 4 districts:  Beacon, Millbrook, Poughkeepsie, and Spackenkill.  The BOCES rates are lower than mine by 5 percent or more in most cases.  My report BOCES Tax Rate Variances documents these discrepancies in detail.  I sent this report to BOCES Assistant Superintendent for Business Services Linda Poleski, with the hope that she would review my analysis and determine whether the issues I raised about the accuracy of BOCES current true value tax rates could be substantiated.  Ms. Poleski graciously accepted my report, and within a few days informed me that BOCES has confirmed that all my tax rates are correct, and has adjusted its records accordingly.

OK, so far so good.  Encouraged by this initial interaction, I examined additional BOCES property tax tables, and found a significant number of additional discrepancies:

• True Tax Rates – Historical table on page 147 (page 35 of the Financial section) of the Contract Analysis book contains tax rates for every school district going back a decade.  Although most of the tax rates in this table agree with my analysis, a significant number did not agree.  I found at least one disagreement in every year, and at least one disagreement in each of 8 school districts.  For the Poughkeepsie school district, there was no agreement in any year.  For the 2000-2001 school year, there was no agreement in any school district.  A number of disagreements exceeded 5 percent.
• Total Property Value on page 19 of the Fact Book PDF (numbered page 13) contains true value taxable assessments for each school district in 2009 and 2010.  Of the 26 assessments, 12 agree with my analysis and 14 do not — more than half.  Most BOCES assessments are a few percent greater than mine, but 4 assessments are over 10 percent greater than mine.  The disagreements are especially puzzling since these numbers are used to compute the true value tax rates, for which we have much more agreement.
• Comparison of Property taxes for 2005-06 to 2009-10 on page 15 of the Fact Book PDF (numbered page 9) contains the tax levies for these years for each school district.  The 2009 tax levies also appear on page 116 of the Contract Analysis PDF (page 4 of the Financial section).  I found no agreement at all between any of this data and my analysis.  Typically, BOCES data was on the order of 10 percent lower than mine, a very large variance.  Once again, this disagreement is especially puzzling since these numbers are used to compute the true value tax rates, for which we have substantial agreement.

I documented these discrepancies in Other BOCES Property Tax Variances, which I sent to Ms. Poleski on April 11.  I had some confidence that these new issues would be taken seriously, since BOCES had already accepted my previous discussion as being both responsible and accurate.  Unfortunately, after a number of conversations with Ms. Poleski it became clear that BOCES will not attempt to determine whether the new issues I raised regarding BOCES property tax tables are valid.  Ms. Poleski also stated that BOCES “will not go back and correct previous years”.  My conclusion from these interactions is that BOCES is indifferent to whether the property tax data in their two publications is accurate.

In summary, BOCES property tax data has been brought into serious question, and these questions have not been answered.  School district administrators may want to avoid relying on this data for their budget processes and union negotiations.

School District Tax Rate Comparisons

I've consolidated my recent posts on Dutchess County's 2010 school district tax rates into an 18-page PDF document, School District Tax Rate Comparisons.  This document includes not only all the information in my last three posts, but it also contains the tax rate information in tabular form.  In addition, it includes information on tax rate increases since 2009, in both chart and tabular form.

School Tax Rate Rankings — Taxpayer Viewpoint

Which property taxpayers in Dutchess County pay the highest school tax rate?  The lowest?  Where does your property stand in the school district rankings?  Here are the answers.

The first thing to understand is that the answers are different for homes (homestead properties) than they are for businesses (non-homestead properties).  That's because 5 of Dutchess County's 13 school districts — Arlington, Beacon, Poughkeepsie, Spackenkill, and Wappingers — tax their home properties at lower true value rates than their business properties.  The second thing to understand is that in the Arlington, Beacon, and Wappingers School Districts, properties are taxed at different rates depending not only upon whether they are homestead properties, but also upon which town the property lies in.  For more details on these points, see School Tax Rate Comparisons — Two Viewpoints.

School Tax Rankings for Homes

The following chart shows the 2010 true value school tax rates for homes in Dutchess County.  For the 5 school districts using the homestead tax option, the homestead tax rates are shown.  The primary data source is the Dutchess County Real Property Tax Service Agency's 2011 Tax Rate Pamphlet.  To improve clarity, I've grouped Arlington's municipal segments (Towns) with nearly the same true value tax rate into a single bar.

As the chart shows, first place for homesteads goes to the Hyde Park segment of the Arlington School District.  Homesteads in this segment pay the highest true value tax rate of any homes in Dutchess County — by far.  Arlington's Hyde Park rate of $22.02 is 15 percent higher than for second place Pawling, and almost double that of “last place” Poughkeepsie.  The reason for the exceptionally high tax rate in the Hyde Park segment of Arlington is that this segment contains a large number of farms with partial tax exemptions.  It turns out that the Hyde Park segment of Arlington contains only a few dozen homestead properties.  Thus, only a few taxpayers are affected, presumably not enough taxpayers to mount an effective complaint.

Apart from the anomalous Hyde Park segment of Arlington, with its exorbitant $22 tax rate, school tax rates for homes in Dutchess County can be seen to be split between high-rate districts (Arlington, Pawling, Hyde Park, Red Hook, Dover, and Spackenkill, in the range of about $17 to $19), and low-rate districts (Rhinebeck, Beacon, Wappingers, Webutuck, Pine Plains, Millbrook, and Poughkeepsie, in the range $11 to $14).

Although Poughkeepsie has the lowest homestead school tax rate in Dutchess County, Poughkeepsie gets a greater proportion of its funding from sources other than school taxes of any school district in Dutchess County.

School Tax Rankings for Businesses

The following chart shows the 2010 true value school tax rates for businesses in Dutchess County.  For the 5 school districts using the homestead tax option, the non-homestead tax rates are shown.  Once again, I've grouped segments with nearly the same true value tax rate into a single bar for clarity:

The chart shows first place for non-homestead tax rates going to Spackenkill by a landslide, with a bank-breaking $38.02 tax rate.  To put Spackenkill's sky-high tax rate in perspective, it is more than double Hyde Park's 4-th place rate of $18.60, and more than triple Webutuck's $11.92.  The primary business properties in the Spackenkill school district have historically belonged to IBM Corp., which has been willing in the past to pay exorbitant school taxes into a district where many of its professional employees lived.

Way “behind” Spackenkill, but still easily capturing second place is Arlington, in the $23.50 to $27 range, depending upon segment.  Trailing considerably after Arlington is a large pack of school districts in the $16.50 to $19 range.  The remaining five school districts — Millbrook, Pine Plains, Webutuck, Poughkeepsie, and Rhinebeck — managed to keep their commercial school tax rates at the low end, between $11 and $14.  Of these five, all except Poughkeepsie have the same tax rate for homes and businesses.

How should these rankings be interpreted?

The rankings in this post compare how steeply homes and businesses are taxed by school districts in Dutchess County.  The first chart can be used to determine the relative school tax bills for homes in Dutchess County in 2010.  For example, if you own a home in the Hyde Park segment of the Arlington School District, your 2010 school tax bill was almost double that of a home with the same taxable market value in the City of Poughkeepsie.  Similarly, the second chart shows that if you own a commercial property in the Spackenkill School District, your 2010 school tax bill was more than triple that of a commercial property with the same taxable market value in the Webutuck, Pine Plains, or Millbrook School Districts.

In summary, these charts show how steeply school districts tax their properties — from the taxpayer's point of view.  These charts are not appropriate for comparing how steeply the various school districts tax their tax base on average, because many school districts tax different properties at different rates.  For this latter comparison, see School Tax Rate Rankings — School District Viewpoint.

Out of County School Districts

A small number of Dutchess County property owners do not pay school taxes to any of the Dutchess County school districts listed above.  Instead, they pay to so-called “out-of-county” school districts Carmel, Haldane, or Taconic Hills.  The 2010 true value tax rate for the Taconic Hills School District is only $10.07, making it the lowest school tax rate for Dutchess County home or business property taxpayers.  At the other extreme, the 2010 true value tax rate for the Carmel School District is $20.34, placing it second only to the Hyde Park segment of Arlington for homes, and third only to Spackenkill and Arlington for businesses.  Finally, the Haldane School District's $14.75 tax rate places it between the low-rate and high-rate districts for both homes and businesses.

School Tax Rate Rankings — School District Viewpoint

Which school district in Dutchess County has the highest tax rate? The lowest? Where does your school district stand in the rankings?  You're about to find out.

The winner by a landslide is the Spackenkill School District, whose 2010 aggregate tax rate of $24.75 per thousand dollars of market value is way “ahead” of second-place Arlington. Before we go any further, it's crucial to understand the meaning of the rankings in this post.  The most important thing to know is that these rankings are from the school district point of view.  The aggregate tax rates in this post measure how steeply each school district taxes its tax base.  These rates are useful to understand how school districts compare with each other, tax-wise.  They are generally not appropriate for comparing the taxes paid by individual taxpayers, because in some school districts, different taxpayers pay at different rates.  Subsequent posts will present rankings from the taxpayer viewpoint.  For more on school district versus taxpayer tax rates, see School Tax Rate Comparisons — Two Viewpoints.

Here are the aggregate tax rates for the 13 school districts in Dutchess County, which I compiled primarily from data in Dutchess County Real Property Tax Service Agency's 2011 Tax Rate Pamphlet.

The school districts' aggregate tax rates fall roughly into 4 groups:  low, medium, high, and almost-off-the-chart.  The low ranking districts include Millbrook — lowest of all in Dutchess County — Pine Plains, Webutuck, and Poughkeepsie.  The medium group include Wappingers, Rhinebeck, and Beacon.  The high group — the largest group — includes Dover, Red Hook, Hyde Park, Pawling, and Arlington.  Spackenkill comprises it's own almost-off-the-chart group.

How should these rankings be interpreted?

Probably narrowly.  It is fair to say that these rankings compare how steeply each school district taxes its tax base.  But aggregate tax rate is only one of a number of objective metrics for evaluating school district financial performance.  Although most school districts in Dutchess County get the bulk of their funding from the tax levy, the proportion of other funding varies considerably from one district to another.  A few districts — such as Poughkeepsie, in the low group — get less than a third of their funding from the tax levy.

Even if aggregate tax rate were a reliable measure of a school district's financial performance, does a low tax rate mean that the school district is short-changing its students and staff, or does it mean that the district is using its funds more efficiently than other districts?  Does a high tax rate mean the school is superior, or that it is more wasteful?  There's really no end to such imponderable questions.  Depending upon how one wants to look at it, there are many additional useful ways of measuring school district financial performance.  (Examples:  cost per student, market value per student, etc.)

BOCES Corrects Its Tax Rates

School officials and others who are familiar with the Dutchess County Board of Cooperative Educational Services (BOCES) publication Contract Analysis 2010-2011 may notice some discrepancies between that publication's table, True Value Tax Rates for 2010-11 on page 32 of the Financial section, and my ranking chart above.  The data should be the same, because both are measuring the same thing.  Although most of the data in the BOCES table agrees with mine to the penny, I found 4 school districts with substantial disagreement:  The BOCES table's tax rates for Beacon, Millbrook, Poughkeepsie, and Spackenkill are lower than mine by 5 percent or more in most cases.  After consulting with a senior BOCES official about these discrepancies, I'm happy to report that BOCES has accepted all my tax rates as correct, and has adjusted its records accordingly.  BOCES has earned my thanks for its gracious and prompt handling of my inquiries.

School Tax Rate Comparisons — Two Viewpoints

I'm beginning a series of posts on school district tax rates in Dutchess County.  School taxes are by far the largest single property tax for most taxpayers.  In fact, property owners often pay more in school taxes than in all other property taxes combined.  Another way of saying this is that the school tax rate is greater than the sum of all the other tax rates (town, county, fire, library, etc.) for a typical taxpayer. 

Comparison Requires True Value Tax Rates

In order to properly compare tax rates — any tax rates — the tax rates must be expressed in dollars per thousand dollars of market value, as I have explained countless times in this blog (for example, here, here, and here).  Tax rates expressed in terms of market value rather than assessed value are sometimes called true value tax rates.

True value tax rates are useful for comparing school tax rates with town, county, fire, and library tax rates, as above, and they are also useful for our main focus here, which is comparing various school tax rates with each other.  Comparison of school tax rates arises in a number of useful contexts, including comparisons among school districts, comparisons in the same district among years, and comparisons within the same district (or even different districts) among taxpayers.  We will investigate all of these contexts in this series of posts.

School District Viewpoint versus Taxpayer Viewpoint

It is important to understand that in Dutchess County, school tax rate comparisons should be conducted in two different ways, depending upon the purpose or viewpoint of the comparison.  These two viewpoints are the taxing authority viewpoint (in this case, the school district viewpoint) and the taxpayer viewpoint.  These seemingly similar viewpoints can be described by the following two sets of questions:

Q1 (School District Viewpoint):  How steeply does each school district tax its tax base?  Which school district in Dutchess County has the highest tax rate?  The lowest?  Where does your school district stand in the ratings?

Q2 (Taxpayer Viewpoint):  How steeply are property owners taxed by their school district?  Which property owners in Dutchess County pay school taxes at the highest rate?  The lowest?  Where does your property stand in the ratings?

If every school district taxed all their property owners at the same true value tax rate within the district, the above two sets of questions would have the same answers.  Unfortunately, this is not quite the case.  Of the 13 school districts in Dutchess County, 8 school districts tax all their property owners at the same true value tax rate within the district.  The remaining 5 school districts have a more complex taxing structure, taxing different property owners at different rates.  These different rates occur for two different reasons, homestead tax option and apportionment option.

School District	Tax Rate Structure
Dover Hyde Park Millbrook Pawling Pine Plains Red Hook Rhinebeck Webutuck	Single tax rate
Poughkeepsie Spackenkill	Homestead tax option
Arlington Beacon Wappingers	Homestead tax option Apportionment option

(I've chosen to ignore for the most part the small regions in Dutchess County lying in the out-of-county Carmel, Haldane, and Taconic Hills school districts.)

Homestead Tax Option

Under New York State Real Property Tax Law, school districts and certain other taxing authorities can opt to classify the taxable properties in their jurisdiction into two separate classes.  Properties in the homestead class (essentially homes) are taxed at a relatively low rate, while properties in the non-homestead class (essentially businesses and commercial properties) are taxed at a higher rate.  The Poughkeepsie, Spackenkill, Arlington, Beacon, and Wappingers school districts utilize the homestead tax option, as shown in the above table.  In these five school districts, a property's true value tax rate depends upon whether the property is classified as a homestead or a non-homestead property.

Apportionment Option

Nearly all school districts in Dutchess County comprise portions of more than one town.  (The only exceptions are Poughkeepsie and Spackenkill.)  The portion of a school district lying in a particular town is called a municipal segment.  Ordinarily, property taxing authorities in New York State are required to apportion their tax levy among municipal segments in such a way that all properties (or all properties of a given property class, if the homestead tax option is used) are taxed at the same true value tax rate.

However, for school districts, New York State Real Property Tax Law provides an optional exception to this common-sense rule.  The exception permits school districts to apportion their tax levy among their municipal segments based on a different criterion than uniform true value tax rates.  Essentially, the tax levy is apportioned based on total market value, rather than on total taxable market value.  Only the Arlington, Beacon, and Wappingers school districts utilize this special apportionment option, as shown in the above table.  The important point here is that in these three school districts, a property's true value tax rate depends not only upon the property's class (homestead or non-homestead), but also upon which town (municipal segment) the property lies in.

School District	Number of Towns
Arlington	9
Beacon	3
Wappingers	5

OK, enough about real property tax law.  Here's how the two sets of comparison questions can be answered using various kinds of tax rates:

Aggregate Tax Rate

I define the aggregate tax rate for a school district to be simply its total tax levy divided by its total taxable market value.  The aggregate tax rate is a true value tax rate which measures how steeply a school district taxes its tax base.  Thus, the aggregate tax rate is appropriate for comparing school districts with each other (Q1).  If a school district taxes all its taxpayers at the same true value tax rate, as do 8 of the school districts in Dutchess County, then the aggregate tax rate is this rate.  If a school district taxes different taxpayers at different true value tax rates (5 school districts with homestead and/or apportionment options), then the aggregate tax rate is the average of those rates, weighted by the proportion of taxable market value in each taxing class and/or municipal jurisdiction.

Homestead and Non-Homestead Tax Rates

For a school district using the homestead tax option, the homestead tax rate is simply the portion of its total tax levy assigned to the homestead class, divided by the total taxable market value of its homestead class.  Thus the homestead tax rate is a true value tax rate.  The non-homestead tax rate is defined similarly.  For property owners in the Poughkeepsie and Spackenkill school districts, these rates are appropriate for measuring the steepness of their taxes, and comparing them with those of property owners elsewhere (Q2).

Segment Tax Rates

In the Arlington, Beacon, and Wappingers school districts, a property's school tax rate depends not only upon the property's class (homestead or non-homestead), but also upon which town (municipal segment) the property lies in.  I define the homestead segment tax rate for homestead properties in a municipal segment to be the portion of the homestead tax levy apportioned to homesteads in the municipal segment, divided by the taxable market value of homesteads in that municipal segment.  Thus the segment tax rate is a true value tax rate.  Non-homestead segment tax rate is defined similarly.   For property owners in the Arlington, Beacon, and Wappingers school districts, the segment tax rates are appropriate for measuring the steepness of their taxes, and comparing them with those of property owners elsewhere (Q2).

For example, in the Arlington School District, the 2010 homestead tax rate in the Town of LaGrange is $18.92 per thousand dollars of market value, while that in the Town of Poughkeepsie is $18.61.  This means that a homestead property in the Town of LaGrange paid 1.7 percent more Arlington school tax in 2010 than a homestead property with the same taxable market value in the Town of Poughkeepsie.

Ranking the School District Tax Rates

In subsequent posts, I'll present the rankings of Dutchess County school district tax rates, from both the school district and the taxpayer viewpoints.

Arlington School District Superintendent Continues Tax Levy Misstatement

Arlington School District update:  Superintendent's tax levy data is more correct now, but his key summary statement is still wrong.

Recent Post Highlights Data Errors and Key Misprint

My recent post Arlington School District Proposes Lowest Tax Levy Increase in Decade — NOT exposed the fact that Arlington School Superintendent Geoffrey Hicks used incorrect tax levy data to reach an incorrect conclusion in his 2011-2012 Budget Draft 2 presentation of February 15, 2011.  This incorrect conclusion was that the 2011-2012 budget proposal represented the lowest tax levy increase in 10 years.  In reality, it represents the second lowest tax levy increase.

As an aside to my main point, I made light of a ridiculous misprint on a key summary page, which unintentionally stated  

Lowest proposed tax levy in 10 years 

instead of  

Lowest proposed tax levy increase in 10 years

The proposal actually represents the highest proposed tax levy in 10 years, and almost certainly the highest in the history of the Arlington School District, not the lowest. 

My Contacts with Arlington Officials

Before posting, I worked closely with a senior Arlington official to correct some of Arlington's past tax levy data, though we were not able to resolve disparities from 2000 to 2004.  After posting, I emailed Hicks, to be sure he would have direct access to my post.

Revised Presentations Continue Misstatement

Hicks has now presented two revisions of the February budget draft, Arlington Central School District:  Community Budget Forum on March 12, and Arlington Central School District:  Budget Study Session on March 15.  Happily, both these revisions provide the partial correction to Hicks' chart of tax levy increase history.  This partial correction is enough to establish the correct conclusion that the proposal represents only the second lowest tax levy increase in a decade, not the lowest.  This correct conclusion is hinted at by the fact that the word “second” has been prepended to the main summary page bullet item, which in both of this week's drafts reads

Second lowest proposed tax levy in 13 years

So “second” was inserted, and “10” was changed to “13”, but the key term “increase” didn't make it into either revised draft.  So this twice-revised summary statement is still as wrong as it ever was.

Stakeholders May Be Mislead

I'm sure that Arlington's Board of Education and readers of this blog will easily understand the intended meaning of Hicks' key summary statement, despite the misprint.  But in my view, many of Arlington's less sophisticated stakeholders who read only Hicks' summary page will not catch the blunder, especially since it's now been repeated in three successive presentations.  It's unfortunate that Hicks has been unable to correctly communicate a key feature of the proposed 2011-12 budget — even after three tries.