Poughkeepsie Journal Fails Its Readers – Again

Once again, the Poughkeepsie Journal fails to properly inform its readers about property taxes.  There is an important story about property taxes, but the Journal fails to tell it. 

Today's front page feature story, Property taxes weigh heavily in Dutchess, by Joseph Spector, is full of numbers and statistics, but it fails to mention – fails to even mention – any tax rates or changes in tax rates.  This is just like having a story about high sales taxes and never mentioning any sales tax rates or changes in sales tax rates.  It makes it impossible for readers to understand what’s going on. 

School Tax Report is Misleading

As just one example of misleading reporting, the story refers to school officials saying that “the school-tax-levy increase in the current school year was 1.85 percent, the lowest in at least 10 years.”  This sounds like a bright spot in the tax picture – but it is not.  Dutchess County property values were down 5 percent in the current school year.  Therefore, school tax rates are up approximately 7 percent.  In other words, property owners paid 7 percent more of their wealth – as measured by the market value of their properties – to schools this year than they did last year.  Not a bright spot at all.

School officials aren’t stupid.  They deliberately talk about tax levy increases now, because that makes things sound better than they really are.  But the Poughkeepsie Journal has a duty to expose this deception by showing how school tax rates were stable in the past but are increasing now.  It's the tax rate that allows you to make a fair comparison with the past.

Comparison to Westchester is Misleading

Here’s a second example of misleading reporting:  The story asserts that “Westchester and Nassau counties … have the highest taxes in the state”.   It sounds like these counties have it worse than Dutchess.  But the Journal fails to point out that Westchester and Nassau also have the highest property values in the state.  If your property’s market value is greater, of course you’re going to pay more taxes!  Saying it another way, if you can afford to buy a house in Westchester, you can afford to pay the taxes.  But your tax rate could be the same as or lower then in Dutchess.  There’s no way to tell from this story.  It's the tax rate that allows you to make a fair comparison.

Journal Misses the Real Story

People belly-ached about property taxes ten years ago, and they're bellyaching about property taxes now.  The difference is that up until two years ago, property tax rates have been relatively stable, whereas now property tax rates are dramatically increasing.  Because property tax rates are starting to increase significantly for the first time in many years, complaints about property taxes are much more justifiable now than they were in the past.  This is the real story.  It's too bad the Journal hasn't told it.

Many of my previous Truth in Taxing posts to this blog describe a pattern of failure by the Poughkeepsie Journal to properly inform its readers about property tax issues.  To view these posts, click on label “Truth in Taxing” in the right column of this page.

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.

Ranking of Town Tax Rates

A recent post displayed the ranking of town tax rate increases in Dutchess County.  This post ranks the town tax rates themselves. The tax rate measures how steeply your wealth — as measured by the value of your property — is taxed.  Do you know how your town compares with other towns in Dutchess County?  Here's the ranking for 2010:

Town of Poughkeepsie

The Town of Poughkeepsie is in first place.  Its 2010 tax rate of $3.39 per thousand dollars of market value (for homesteads outside the City of Poughkeepsie) is the highest of all 20 towns in Dutchess County.  This means that if you own a home in the Town of Poughkeepsie, your wealth — as measured by the market value of your property — is taxed by the town at a higher rate than if your home were in any other town in Dutchess County.  The Town of Poughkeepsie had a tax rate increase of 3.5 percent in 2010, which is  lower than for most towns in the county.  But already in 2009, Poughkeepsie was safely ahead of the pack.  Not only was the Town of Poughkeepsie's 2009 tax rate higher than any other town's 2009 tax rate, but the Town of Poughkeepsie's 2009 tax rate is higher than any other town's 2010 tax rate.  In other words, no other town has “achieved” as high a tax rate in 2010 as the Town of Poughkeepsie did in 2009.

Towns of Pine Plains and North East

In 2009, the Town of North East had the second highest tax rate in Dutchess County, just edging out the Town of Pine Plains.  But North East is one of only two towns in Dutchess County which did not increase its tax rate this year, while Pine Plains' tax rate went up 9 percent — more than most towns in the county. The Pine Plains “surge” allowed it to “advance” to second place, leaving North East in third position.

Town of Pawling

The Town of Pawling, thanks to having the largest surge of all towns in Dutchess County, has pulled away from a tight cluster of moderately-high-tax-rate towns in 2009, to solidly secure fourth place, with fifth place Hyde Park a distant $0.33 lower.

Towns of Washington, Wappinger, and Fishkill

The towns of Washington, Wappinger, and Fishkill have held the prizes for lowest three town tax rates for at least the last two years.  The tax rate in the Town of Poughkeepsie is 3.2 times higher than the lowest tax rate, in the Town of Washington.  For the town tax you pay on one property in Poughkeepsie, you could pay the town tax on more than three same-valued properties in the Town of Washington.

Other Towns

Do you know how your town ranks relative to other Dutchess County towns in the tax rate sweepstakes?

Now you do.

Data:  The data for this post are from a table I compiled based on tax rate information from the county government's Real Property Tax Service Agency, as explained here.  For towns containing villages, I've compiled only the tax rates for outside the villages, marked with suffix “- o”.  For towns containing separate homestead and non-homestead (commercial) rates, I've compiled only the homestead rates, marked with suffix “- h”. 

For the record, here are the corresponding 2009 town tax rates:

Town of Pawling Tax Rate Increases 28.4 Percent

The Town of Pawling's 2010 property tax rate increased a whopping 28.4 percent over Pawling's 2009 tax rate.  Although all but two towns in Dutchess County increased their tax rates in 2010, Pawling's tax rate increase is by far the largest.  The second largest tax rate increase of 19.0 percent, in the Town of Milan, is 9.4 percent lower. Yesterday's post to this blog gives a complete ranking of 2010 town tax rate increases in Dutchess County.

Pawling is adversely affected by a downward trend in property values.  Pawling's taxable market value is down 5.1 percent for 2010 property tax bills.  But this fact does nothing to explain why Pawling's tax rate increase is higher than in other towns, because every town in Dutchess County has this problem.  Indeed, all of Dutchess County's taxable market value is down 5 percent.

The Three Causes of Pawling's Problem

I spoke with Town of Pawling Supervisor David Kelly to learn why Pawling's tax rate has increased so much more than other towns'. My understanding of our conversation is that Pawling's tax rate increase has three causes:

1. Library Referendum:  Voters in the Town of Pawling approved a library referendum last November — before Kelly took office — resulting in an additional tax levy for the town of $270,000 in 2010 (and similar amounts in future years).
2. 2009 Appropriated Fund Balance:   At the end of 2008, Pawling had an extra $200,000 unspent.  This appropriated fund balance was used to lower the 2009 tax rate.  This fortunate circumstance in 2009 has the effect of making the 2010 tax rate increase larger than it would otherwise have been.
3. Budget Items:  The Town of Pawling budgeted various items as needed to support town services.

One way to understand what all this means is with the following bar chart:

If Pawling taxpayers had the same tax rate as last year (no rate increase), the tax levy outside the Village of Pawling would have been $2,669,726, as shown by the bar on left.  The actual tax levy of $3,428,060, resulting in a 28.4 percent tax rate increase, is shown by the bar on right.  The green and orange portions of the bar on right represent the library referendum and 2009 appropriated fund balance contributions, prorated to exclude the 15.1 percent of these contributions that presumably would be paid by taxpayers in the Village of Pawling.

The Components of Pawling's Tax Rate Increase

The difference between the left and right bars can be seen more clearly in the following pie chart:

The percentages for each component show the contributions to the 28.4 percent tax rate increase.  (Rounding causes a small error in the sum.)  Comparing the above figures with the chart of 2010 town tax rate increases in my last post allows one to make the following observations:

1. Even if the library referendum had been rejected by voters, Pawling's tax rate increase would have been 19.9 percent — still the highest of any town in Dutchess County. So one cannot blame the library referendum alone for Pawling's top ranking in the tax increase contest.
2. If the library referendum had been rejected and the 2009 appropriated fund balance did not exist, Pawling's tax rate increase from budget items alone would have been 13.5 percent — the fifth highest tax rate increase of all 20 towns in Dutchess County.  So the budget items alone put Pawling in the top quarter of towns for tax increases.
3. If Town of Pawling officials had limited 2010 budgetary spending so as to avoid increasing the tax rate; that is, if the above “excess” budget items were zero instead of 13.5 percent, then the remaining library referendum and 2009 appropriated fund balance would still increase Pawling's tax rate by 15.0 percent.  In this case, Pawling would still have the fourth highest tax rate increase for towns in Dutchess County, placing Pawling in the top fifth.

To sum up, each of these three pieces of pie is so big that even one of them contributes a significant increase to Pawling's tax rate.  Pawling must now eat all three pieces. Property taxpayers will have a stomach ache.

Library Referendum Was a Bad Idea

I'm grateful to Supervisor Kelly for generously sharing his perspective on Pawling's property tax situation with me.  Kelly has argued, correctly in my view, that submitting the library proposal to a referendum was a bad idea, because voters approved a large expenditure without seeing the whole fiscal picture. Now the town is stuck with a tax rate increase which is way out of line — probably not what the voters intended.  The limited foresight of voters is a general problem with referenda, and a good reason to prefer the more comprehensive vision of the budget process.  Indeed, there are numerous reasons to avoid referenda.  An extreme case of tax referenda gone wild is the State of California, which has been brought to its knees by Proposition 13 and other unwise ballot initiatives.

Towns Increase Tax Rates

All but two of the twenty towns in Dutchess County have increased their tax rates in 2010, compared with 2009 rates.  This fact is Bad News for property taxpayers, because the tax rate measures how steeply your wealth — as measured by the value of your property — is taxed.  Do you know how much your town's tax rate has increased?  And do you know how your town stands relative to other towns in Dutchess County?  This post compares the town tax rate increases for Dutchess County.

First the Good News:  Two towns in Ductchess County held the line on taxes, or even decreased them:  The Town of North East has maintained essentially the same tax rate as last year, and the Town of Rhinebeck managed a small (0.4 percent) tax decrease.  Well, that's the end of the good news.

Data:  Most data for this post are from a table I compiled based on tax rate information from the county government's Real Property Tax Service Agency, as explained here.  For towns containing villages, I've compiled only the tax rates for outside the villages, marked with suffix “- o”.  For towns containing separate homestead and non-homestead (commercial) rates, I've compiled only the homestead rates, marked with suffix “- h”.  For the Towns of Beekman and Red Hook, I've augmented the official tax rate increases to more fairly indicate the effective tax rate increase, as described in detail below.

Now the bad, worse, and worst news:  The towns of Wappinger, Red Hook, Stanford, Poughkeepsie, Clinton, and Fishkill have tax rate increases of between 2 and 4 percent.  Not too bad.  The towns of Dover, Washington, East Fishkill, and Pine Plains have tax rate increases of between 5 and 10 percent.  Bad.  The towns of Amenia, LaGrange, Hyde Park, and Beekman have tax rate increases of between 12 and 15 percent.  Really bad.  The towns of Union Vale, Pleasant Valley, and Milan have tax rate increases of between 16 and 20 percent.  Worse than bad.  But the worst news of all is the Town of Pawling, which wins the bad-news contest with a whopping 28.4 percent tax rate increase.  I'll post separately about Pawling's situation.  Here are the results in chart form:

Town of Beekman's Cost Shifting 

Technically, the Town of Beekman's tax rate has decreased by 0.7 percent, as shown here.  However, this figure is misleading from a taxpayer's viewpoint, because beginning in 2010, Beekman has shifted the $319,800 cost of its ambulance service from the Town to the Beekman Fire District.  This means that the same taxpayers who paid for the ambulance service through Town taxes in 2009 now pay this cost through fire district taxes.  To determine the effective tax rate increase for Beekman's taxpayers, we need to add the $319,800 back into the Town's tax levy.  The result is an effective tax rate increase for the Town of Beekman of 14.6 percent, as shown in orange in the above chart.

If I were analyzing tax rate increases for fire districts (which I should probably do, considering the name of this blog), I'd observe that technically, the Beekman Fire District's tax rate has increased by 42.0 percent.  However, this figure is misleading from a taxpayer's viewpoint, because the same taxpayers who paid the “extra” $319,800 fire taxes in 2010 paid a similar cost in 2009 through their Town taxes.  So to be fair to the Beekman Fire District, the effective fire tax rate change is actually a small (0.7 percent) decrease.

Town of Red Hook's Cost Shifting 

Technically, the Town of Red Hook's tax rate has decreased by 10.5 percent, as shown here.  However, this figure is misleading from a taxpayer's viewpoint, because beginning in 2010, Red Hook has shifted the $145,000 cost of the Red Hook Library and the $125,00 cost of the Tivoli Library from the Town to two new library line items on the tax bill.  All property taxpayers in the Town of Red Hook pay both of these new library line items in addition to the Town line item, regardless of where in the Town they live.  You read that right.  (Just to confuse things further, these two new library line items are in addition to yet another Red Hook Library line item associated with the Rhinebeck School District. The Rhinebeck school district library line item has been paid by all Red Hook property taxpayers since 2005, along with their school taxes.)

This cost shifting means that the same taxpayers who paid for the Red Hook and Tivoli libraries through Town taxes in 2009 now pay this cost through separate line items on their tax bills.  To determine the effective tax rate increase for Town of Red Hook taxpayers, we need to add the two new library tax levies back into the Town's tax levy (after prorating to account for the villages).  The result is an effective tax rate increase for the Town of Red Hook of 2.4 percent, as shown in orange in the above chart.

Other Misleading Tax Rate Increases?

It's entirely possible that towns other than Beekman and Red Hook have their own cost shifting stories which make their nominal tax rate increases misleading.  I have not examined the situations in most towns.  Readers are encouraged to bring such situations to my attention.

Poughkeepsie Journal's Tax Rate Increase Table Is Flawed

To the Poughkeepsie Journal's credit, it published a feature story on January 11-th tabulating the tax rate increases of all Dutchess County towns.  Unfortunately, numerous mistakes in this tabulation, documented here, here, and here, make the Journal's tabulation unreliable.  This post attempts to correct the record.

Why are property taxes going up?

Thoughtful observers will probably not even be asking this question.  The 2008 economic meltdown was global and comprehensive.  It has worsened economic life in 97 different ways for taxpayers, workers, businesses, and, yes, local governments.  As I see it, local governments are just additional victims of the 2008 economic meltdown.

Poughkeepsie Journal's Mistakes in Gathering Tax Data

This is the third of three blog posts on the Poughkeepsie Journal's January 11 feature story Most cities, towns cut spending, raise taxes to balance the books by reporter John Davis.  That story contained a city/town tax table and sidebar (in the print edition only, unfortunately) with mistakes in each of these three steps:

1. Get accurate data.
2. Determine the correct way to analyze the data.
3. Do the arithmetic correctly.

My first blog post, Poughkeepsie Journal's Incorrect Tax Rate Analysis, discussed a serious error in Item 2 — Determining the correct way to analyze the data.  My second post discussed mistakes in Item 3 — Doing the arithmetic correctly.  This post discusses mistakes in Item 1 — Getting accurate data.

What Is the Most Authoritative Source for Property Tax Data?

According to the Dutchess County Charter, the county government's Real Property Tax Service Agency (RPTSA) is responsible for preparing tax rates for the county, towns, and special districts.  RPTSA also prepares property tax bills and tax rolls.  The fact that the RPTSA prepares all these documents means that the tax data published each year by the RPTSA corresponds exactly to the taxes paid by property owners.  So if you want the tax rate increases actually paid by property owners in any Dutchess County town or city, you use the RPTSA data.

Town/City Tax Rates Using RPTSA Data

I've used the RPTSA data to compile a table of tax rate changes for towns and cities in Dutchess County.  My table is here.  It wasn't hard to make.  You can easily make one yourself, or use the RPTSA website to check my work.  Here's what I did:

1. I copied the 2009 and 2010 tax levy, assessed value, and equalization rate data (orange column headings) from the RPTSA tax rate pamphlets.  
2. I calculated each tax rate per $K of assessed value by dividing the tax levy by the assessed value.  Next, I calculated the tax rate per $K of market value by multiplying the tax rate per $K of assessed value by the equalization rate.  Finally, I calculated the percent change in tax rate from the 2009 and 2010 tax rates per $K of market value. All my calculations (grey column headings) are to 15 significant figures, but results are displayed to only 3 or 4 significant figures for presentation.
3. I copied the Poughkeepsie Journal's tax rate increase (blue column heading) from their table.
4. I calculated the difference between my tax rate increase and the Poughkeepsie Journal's (grey column heading).

Note that I did not copy the tax rates from the RPTSA tax rate pamphlets, because the pamphlets only display these rates to the nearest cent.  By recalculating the tax rates from tax levies and assessed values, I got the high-precision tax rates necessary for accurate tax rate increases (and also necessary for accurate tax bills!).

Eight towns in Dutchess County contain villages with separate tax rates.  I've followed the Poughkeepsie Journal's lead in showing only the rates for outside the villages, marked with suffix “- o”.  (The Journal has only marked two of them.) Two towns and two cities have separate tax rates for homestead and non-homestead (commercial) properties.  I've shown only the homestead rates, marked with suffix “- h”.

Poughkeepsie Journal's Tax Data Is at Variance with RPTSA

There is little in common between the Poughkeepsie Journal's figures and the RPTSA figures.  The Journal's tax levy figures fail to match the RPTSA tax levy figures in all but two towns (Pine Plains and Stanford).  More importantly, the Journal's tax rate figures differ noticeably from the RPTSA tax rate figures in all but five towns (Beekman, Fishkill, LaGrange, North East, and Poughkeepsie).

It should be noted that the RPTSA had not yet published the 2010 tax rate pamphlet before the Poughkeepsie Journal's January 11 story was written.  However, the RPTSA had published the 2010 tax rolls, which contain the same high-precision 2010 tax rates.  So the essential data was available.

What Were the Sources of the Poughkeepsie Journal's Tax Data?

As noted in my previous two posts on this story, I have not been able to determine for sure where the Poughkeepsie Journal got its data, because Journal management has denied my request to speak with whoever prepared the story's tax table.  But the fact that there's so little in common between the Poughkeepsie Journal's table and the RPTSA's figures leads one to suspect that the Journal used other sources.

Other sources may include the websites of towns, which sometimes display property tax data.  In my experience, this data tends to be different from the RPTSA data, sometimes markedly.  There can be many legitimate reasons for these differences.  As just one example, the RPTSA sometimes must adjust tax levies submitted by towns to account for tax delinquencies from the previous year.

Cost Shifting

For a few towns, a formal comparison between 2009 and 2010 tax rates, as in my table, is misleading, because of cost shifting between town budgets and other government budgets.  When looking at tax rate increases, it makes more sense to take this cost shifting into account.  To the Poughkeepsie Journal's credit, its figures appear to take this cost shifting into account for the Town of Red Hook.  However, the Town of Beekman also has a significant cost shifting issue, which the Journal does not seem to have taken into account.

Summary of My Critiques

The Poughkeepsie Journal's January 11 feature story provided a table of tax rate and tax rate change information for all 20 of Dutchess County's towns as well as the cities of Beacon and Poughkeepsie (in the print edition only).  It's great that the Poughkeepsie Journal seeks to focus so much attention on these parameters, which are key to informing property taxpayers and government officials about what's happening with their taxes.  Unfortunately, the story's tax table is deeply flawed, so that the figures in the tax table cannot be relied upon.  My three posts about this story describe three different kinds of flaws.  This post describes the Poughkeepsie Journal's failure to start with authoritative tax data, my first post describes its failure to take into account changes in equalization rate, and my second post describes its failure to use high-precision arithmetic.  The cumulative effect of these mistakes is that almost every tax rate change in the Poughkeepsie Journal's story is inaccurate, in many cases by a large amount.  A different Poughkeepsie Journal reporter also failed to use high-precision arithmetic in a story a month earlier, as noted in this blog.  There would seem to be a need to improve the oversight of property tax reporting at the Poughkeepsie Journal.  I would certainly like to encourage this outcome.

Fairview Fire District Granted $45K for Consolidation Study

New York Secretary of State Lorraine Cortés-Vázquez today announced that the Fairview Fire District has been awarded a $45,000 Local Government Efficiency grant to study the feasibility of potential consolidation, merger, or cooperative agreement with one or more of its adjacent fire districts.  This grant is the latest in a series of initiatives at the state level in recent years designed to streamline local governments and reduce property taxes.  Cortés-Vázquez concurrently announced similar grants to four other local governments, none of which are fire districts.

Recent History of State Initiatives on Improving Local Governments

The recent state initiatives began in April 2007 with the creation of the New York State Commission on Local Government Efficiency and Competitiveness by Gov. Eliot Spitzer.  The final report of this Commision, in April 2008, emphasized local government consolidation as a principal means to improve efficiency and reduce costs.  New York State law at that time made it almost impossible for local governments to consolidate.  Since then, New York State Attorney General Andrew Cuomo began promoting changes to state law to facilitate consolidation and dissolution of local governments.  Last summer, a new state law — the New N.Y. Government Reorganization and Citizen Empowerment Act — was enacted, making it substantially easier for fire districts like Fairview to consolidate or dissolve.  This law goes into effect in March 21, 2010.

Good News for Fairview Taxpayers

Today's announcement is good news for the Fairview Fire District, which has the highest fire tax rate in Dutchess County, and possibly the highest fire tax rate in New York State.  Many Fairview officials and taxpayers have been receptive to the idea of consolidation and improved efficiency.  The study which this grant will support is a necessary and significant step towards achieving some kind of restructuring that could significantly lower fire taxes for Fairview property owners.

Many thanks to Virginia Buechele for alerting me to today's announcement.

Poughkeepsie Journal Commits Roundoff Error — Again

This is the second of three blog posts on the Poughkeepsie Journal's January 11 feature story Most cities, towns cut spending, raise taxes to balance the books by reporter John Davis.  That story contained a tax table and sidebar (in the print edition only, unfortunately) with mistakes in each of these three steps:

1. Get accurate data.
2. Determine the correct way to analyze the data.
3. Do the arithmetic correctly.

My first blog post, Poughkeepsie Journal's Incorrect Tax Rate Analysis, discussed a serious error in Item 2 — Determining the correct way to analyze the data.  This post discusses a mistake in Item 3 — Doing the arithmetic correctly.  A third post on Item 1 — Getting accurate data — is in preparation.

Round-Off Error

The last column of the story's tax table lists the percent change in the tax rate of Towns and Cities from 2009 to 2010.  The percent change in the tax rate is the key measure of whether taxpayers' property is being taxed at a higher or lower rate, and by how much.  For example, in the Town of Fishkill, the Poughkeepsie Journal's story lists the tax rate increase as 4.13 percent.  Unfortunately, this figure is inaccurate because the Poughkeepsie Journal calculated the tax rate increase using the rounded tax rates of $1.21 and $1.26 per thousand for 2009 and 2010.  If they'd used the more precise tax rates of $1.213139 and $1.260599 per thousand — the rates used to compute individual tax bills, they would have found the tax rate increase for the Town of Fishkill to be “only” 3.91 percent.  The small difference between 4.13 and 3.91 probably matters to Fishkill government officials, who might prefer to say that the tax increase is “only 3.9 percent”, rather than “over 4 percent”.

Round-off errors like this appear not just for the Town of Fishkill, but appear systematically for every one of the 25 towns and cities in the story's table.  The round-off errors are random in direction, and can just as well understate the tax rate increase as overstate it.

Last Two Significant Figures are Garbage

Another way to characterize the Poughkeepsie Journal's mistake is to say that the table displayed more significant figures for tax rate changes than can be supported by their input data.  The table displayed tax rate changes to one hundredth of a percent, while the accuracy of the tax rates only supports tax rate changes to the nearest percent.  In other words, the last two digits in the table's display of tax rate change are garbage.

This Is Not the First Time

This is not the first time the Poughkeepsie Journal has used rounded tax rates to calculate inaccurate tax rate changes, and not the first time I've written about it.  On December 11 — one month to the day before the towns-and-cities story — the Journal published a story on the Dutchess County tax rate stating that the tax rate increase was 14.6 percent, when it was actually 14.3 percent.  Reporter Jenny Lee-Adrian confirmed that her calculation used rounded tax rates.  My post Poughkeepsie Journal Gets It Almost Right discussed the problem of using rounded tax rates, and described two ways the mistake could be avoided in the future.

Restricted Contact with Poughkeepsie Journal

Every tax rate change listed in the Journal's table is consistent with the interpretation that it was calculated using the rounded tax rates displayed in the table.  However, I haven't been able to confirm with the Journal exactly what they did.  As noted in my previous post, Poughkeepsie Journal management stands by their figures, and has denied my request to speak with whoever prepared the story's tax table.  Without direct confirmation, there is always the risk that my interpretation of the Poughkeepsie Journal's table is incorrect.  I'm frankly surprised and disappointed that the Poughkeepsie Journal would choose such an oppositional response.  I would have much preferred a collaborative dialog in which all parties focus on how best to inform property taxpayers and residents about tax issues.

Poughkeepsie Journal's Incorrect Tax Rate Analysis

I hoped last month that my series of posts on Truth-in-Taxing was finished.  However, yesterday's front page feature story in the Poughkeepsie Journal, Most cities, towns cut spending, raise taxes to balance the books, by reporter John Davis, grabbed my attention for two opposing reasons:

First, the positive reason:  This story clearly shows that property taxes in most Dutchess County communities are going up significantly, even as spending is decreasing.  A table on the page 2 continuation lists every city and town in Dutchess County (and even three towns in Ulster County), and shows that most 2010 budgets are going down compared with 2009, while most tax rates are going up.  The “At a glance” sidebar scorecard on page 1 states that only 4 communities in Dutchess will have decreasing tax rates, 16 will increase, and 2 will be unchanged.  It’s great to see this comprehensive town-by-town listing, and to show the dire trend that I predicted months ago.  (Note to web surfers:  Unfortunately, the table and sidebar appear only in the story’s print edition – not on the Journal’s website.)

Now the negative reason:  The story is marred by a series of mistakes in collecting and analyzing the tax data.  The most serious of these mistakes causes the tax rate increases in seven towns to be substantially understated.  In other words, the situation for taxpayers is even worse than the Poughkeepsie Journal claims.

Mistakes?  What Mistakes?

There are three steps to compiling a table such as the one in this story:

1. Get accurate data.
2. Determine the correct way to analyze the data.
3. Do the arithmetic correctly.

Unfortunately, the Poughkeepsie Journal seems to have made mistakes in all three of these steps.  This post will limit itself to discussing the most serious of these mistakes – Item 2 – Determining the correct way to analyze the data.  In a subsequent post I’ll discuss mistakes in Items 1 and 3.

The Analytical Mistake

In order to compare two tax rates, such as for example the Town of Clinton’s 2009 and 2010 tax rates, the two tax rates must first be expressed in comparable units.  When tax rates are expressed in dollars per thousand dollars of assessed value, as they are in the story’s table, the units are comparable only if the equalization rates corresponding to the two tax years are the same.  For the Town of Clinton, and for six other towns in Dutchess County, the equalization rates changed (in fact, all went up) from 2009 to 2010.  For these seven towns, the tax rates first need to be converted to comparable units (typically, dollars per thousand dollars of market value) by multiplying them by their respective equalization rates.  Only then does it make sense to calculate the percent change between the two tax rates.  The Poughkeepsie Journal failed to make this necessary conversion.  Therefore, the table's tax rate changes for these towns are too small, by an amount proportional to the equalization rate change.

Tax Rate Increases

The following table lists the seven Dutchess County towns for which the equalization rate changed from 2009 to 2010, together with the tax rate increases calculated by the Poughkeepsie Journal, and by my analysis:

Town	Pok. Journal	My Analysis
Clinton	-37.32%	3.8%
Dover	0.00%	5.6%
Hyde Park	9.77%	12.2%
Pawling (Out)	22.82%	28.4%
Pine Plains	6.49%	9.0%
Pleasant Valley	8.29%	17.2%
Stanford	-0.88%	3.1%

In the most extreme case, the Poughkeepsie Journal reported a very unlikely 37 percent tax rate decrease for the Town of Clinton, whereas the actual change was an almost 4 percent tax rate increase.   Similarly, the actual tax rate increase in the Town of Pleasant Valley is more than twice what the Poughkeepsie Journal reported.  More generally, two tax rate changes reported as negative, and one as zero, are all actually positive.  Thus, the scorecard for Dutchess County is that only 2 communities in Dutchess have decreasing tax rates, 19 have increases, and 1 remains unchanged.

Poughkeepsie Journal's Response

In preparing this post, I attempted to check first with the Poughkeepsie Journal regarding my findings.  My hope was to be able to report here that the Poughkeepsie Journal acknowledged their mistake, and will presumably avoid it in the future.  Unfortunately, Poughkeepsie Journal management stands by their figures, and has denied my request to speak with whoever prepared the story's tax table.

 

Acknowledgment

Many thanks to the excellent staff at the Dutchess County Real Property Tax Service Agency for assistance in this investigation.

Apology to Poughkeepsie Journal

I’ve written three blog posts this month critical of Poughkeepsie Journal reporter Jenny Lee-Adrian's coverage of the 2010 Dutchess County budget.  These three posts were in response to Lee-Adrian’s stories of December 10, 11, and 17.  The last of my three posts, Poughkeepsie Journal's Fuzzy Math, accused Lee-Adrian of imprecise arithmetic resulting in the publication of inaccurate tax rate increases.  It turns out that the math in the December 17 story was not fuzzy, and the numbers in the December 17 story are accurate after all.  I'm truly sorry to have mistakenly accused the Journal and Lee-Adrian of these errors.

How Did My Mistake Happen?

Short answer:  Faulty assumptions and failure to check them; a chance editorial simplification.
Long answer:  Keep reading.

December 10 Story

The first of my three posts, County Legislature Increases Tax Rate 14.3 Percent, criticized Lee-Adrian’s December 10 story because it didn’t mention tax rates or tax rate increases at all.  This post was very similar to half a dozen earlier posts I'd written on other local government jurisdictions, advocating for prominent coverage of tax rate increases by the Poughkeepsie Journal. 

December 11 Story

Lee-Adrian’s December 11 story included tax rates and the tax rate increase for the December 8 amendments by the Dutchess County Legislature.  The second of my three posts, Poughkeepsie Journal Gets It Almost Right, criticized this story because the included 14.6 percent tax rate increase was inaccurate.  Lee-Adrian had used rounded tax rates for her calculation of the tax rate increase, thus introducing errors.  In my conversation with Lee-Adrian before writing my second post, I suggested that she should use high precision tax data for her rate calculations, and to only round off for presentation, in order to avoid inaccuracies.  My suggestion was not accepted, and our conversation ended awkwardly.

Authoritative Source for Tax Levy

It’s worth noting that Lee-Adrian and I had both obtained the tax levy related to the legislative amendments from the same source:  Fred Knapp, assistant to Legislative Chairman Roger Higgins. Knapp is keeper of the numbers for the Legislature, according to Higgins.  In other words, our source for the tax levy was the key staff person designated by the Legislative Chairman as maintaining the tax data for the legislative branch of Dutchess County Government.  Since the tax levy pertains to the legislative amendments, for which the legislature is presumably the final arbiter, I assumed that the County Legislature is the most authoritative official source for the tax levy resulting from the legislative amendments.

My assumption was faulty.  The budget office in the executive branch of county government is much better equipped than the legislature to account for the detailed implications of legislative amendments to the budget.  It turns out the tax levy increase given to me by Knapp, though expressed to the exact dollar, was actually inaccurate by about $400,000, or 5 percent.  This fact comes into play in act three.

December 17 Story

Lee-Adrian’s December 17 story included tax levy and the tax rate increase for the December 8 legislative amendments, just as did the December 11 story, but there were some obvious differences in the numbers.  While the December 11 story stated the tax rate increase as being 14.6 percent, the December 17 story stated that the increase was 13.9 percent.  While the December 11 story gave the tax levy as “$103.4 million”, the December 17 story gave the tax levy as “103 million”.

My Incorrect Assumptions

Upon reviewing the December 17 story before writing the third of my three posts, Poughkeepsie Journal's Fuzzy Math, I assumed that Lee-Adrian was continuing to use rounded arithmetic on the same tax levy we’d both obtained from Knapp.  All the numbers in her December 17 story seemed consistent with these assumptions.  For example, I assumed that the “$103 million” tax levy was just Knapp’s $103,412,049 rounded to three significant figures.

My assumptions were wrong, despite the fact that they yielded a self-consistent explanation of Lee-Adrian’s December 17 story.  Lee-Adrian was no longer using the tax levy of $103,412,049 with which we’d both started, but a more authoritative tax levy of $102,996,772 provided by the budget office a few days earlier.  She also used high precision arithmetic on this new data.

The new tax levy displayed to four significant figures would have been “$103.0 million”.  If it had been displayed this way, I would have seen right away that she was using a different tax levy than the “$103.4 million” of her previous story.  This would have completely changed my understanding of what Lee-Adrian was doing.  It wasn’t until Lee-Adrian published a follow-up story on December 19 with the exact tax levy that I learned of my mistaken assumptions.  But it’s understandable that “$103.0 million” could have been edited to read “$103 million”.  The chance for such an editorial simplification arises only once in ten times.

Lessons Learned

1. I should have attempted to check my assumptions with Lee-Adrian before posting my incorrect analysis of her December 17 story.  I should not have allowed my discomfort with our earlier conversation to govern my decision to bypass this important step.
2. The budget office is a more authoritative source for county tax levy information than the county legislature.

Time to Declare Victory?

I've written over a dozen posts since September on the subject of Truth in Taxing, arguing that from the viewpoint of property taxpayers and other members of the public, the most important measure of property taxes is the tax rate and changes in the tax rate.  In this time of declining property values, government officials will strenuously avoid mentioning tax rates, because changes in the tax rate would show their budgets in the worst possible light.  I've suggested that news sources such as the Poughkeepsie Journal should make the importance of tax rate changes clear to their readers.  This can be accomplished by putting the tax rate increase in the headline, in the lead sentence, and in the sidebar information — not burying it in the tenth paragraph, or omitting it entirely.

Noticeable Improvement in Poughkeepsie Journal's Coverage
 
When I wrote Poughkeepsie Journal Fails Truth-in-Taxing Test two months ago, most recent Poughkeepsie Journal stories related to property taxes had not provided truth in taxing disclosures.  Since then, there's been a noticeable improvement.  Two weeks ago, reporter Jenny Lee-Adrian's stories on the Dutchess County's budget began to prominently mention tax rates and changes in tax rates.  Yesterday, reporter Michael Woyton's story, “Beacon tax rate up by 10% despite cuts in spending”, makes the tax rate increase the main story.  Even readers who just glance at these two stories can't miss the fact that taxes for Dutchess County and City of Beacon are going up.  My hearty congratulations to the Poughkeepsie Journal, Lee-Adrian, and Woyton for doing a great job of informing the public about what's really happening with property taxes.  I'm very pleased to see what's looking like a trend of significantly improved coverage.

Minor Criticism

Just one small criticism of Woyton's story:  Some readers may be puzzled that the Beacon tax rate could be going up while spending is down.  If the story had mentioned the fact that property values are going down, these readers might have understood better.

Should I Take Credit for Poughkeepsie Journal's Improved Coverage?

Short answer:  I haven't the faintest idea.
Long answer:  I wouldn't even be asking this question, except that I received a serious inquiry about this.  I have had a relatively small amount of direct communication with some Poughkeepsie Journal reporters.  Most of their responses to my critiques of the Journal's coverage were ambivalent at best.  I certainly haven't received any indication that my arguments would affect their reporting.

My view is that this is not an important question to answer.  To me, the important thing is that the Poughkeepsie Journal seems to have made a significant improvement in coverage of property tax matters.  Although this occurred after many of my blog posts, correlation does not imply causation.

Do I Owe the Poughkeepsie Journal an Apology?
 
My most recent post, Poughkeepsie Journal's Fuzzy Math, accused reporter Jenny Lee-Adrian of using a rounded tax levy to calculate an inaccurate tax rate and tax rate increase in a December 17 story on the County budget.  It turns out that the math was not fuzzy, and the numbers in this story may be accurate after all.  So I owe the Poughkeepsie Journal (and Lee-Adrian) an apology, right?

Maybe.  Like most things in life, the reality is more complicated than these simple facts would suggest.  I'm currently investigating how it happened that I got it wrong.  I will post an explanation to this blog as soon as possible.  Hopefully, that will be the last post I'll be moved to write on the subject of Truth in Taxing.

Poughkeepsie Journal's Fuzzy Math

The criticisms of the Poughkeepsie Journal and of reporter Jenny Lee-Adrian in this post are incorrect, and are hereby retracted.  For details, see Apology to Poughkeepsie Journal.


Be careful what you wish for. 

These words came to mind when I read today's front page story by Jenny Lee-Adrian in the Poughkeepsie Journal, “Steinhaus, Legislature plans differ on tax rates” (Online headline differs from print edition.)  There it is, right on the front page!  Everything I've been advocating for!  Tax rates in the headline.  Tax rate increase in the lead sentence.  And tax rates even in the caption of a photo of Dutchess County Executive William Steinhaus, the caption informing readers that property tax would increase even under his original budget.  Best of all, the print edition includes a large table comparing the Legislature's amended budget with the result of recent Steinhaus vetoes. The column titles feature the tax rate increases in huge typefont, so they can't be missed, even by the casual reader.  You can hardly pick up the paper without seeing “13.9%” and “9.2%”.

This is just what I've been advocating for many months now in this blog (and in direct communications with Poughkeepsie Journal reporters).  The tax rate and the tax rate increase is the story, and I'm very glad that the Poughkeepsie Journal finally gets it.

Lee-Adrian's Calculations Are Inaccurate — Again

I wish I could stop here, with congratulations to the Poughkeepsie Journal, and drinks all around.  Unfortunately, the story is marred by inaccurate tax rate calculations by the Poughkeepsie Journal.  When I advocated for reporting on tax rate increases, it never occurred to me to say, “And by the way, when you publish those tax rate increases, consider publishing accurate ones.”  But I guess I should have.

Actually, I did.  I had a long telephone conversation on December 14 with Lee-Adrian regarding her December 11 story containing an amended county tax rate increase of 14.6 percent.  This rate increase is inaccurate because she used rounded tax rates.  I encouraged Lee-Adrian to use high precision tax data for her rate calculations, and to only round off for presentation, in order to avoid inaccuracies.  My recent post Poughkeepsie Journal Gets It Almost Right documents my analysis in more detail.

For today's story, Lee-Adrian apparently decided to recalculate the amended tax information already published.  This time, instead of using rounded tax rates, she used a rounded tax levy of $103,000,000, instead of the actual value of $103,412,049.  This made matters worse than before.

The thing is, when you start your calculation with rounded values, you introduce an error proportional to the difference between the rounded value and the unrounded value.  In this particular case, the rounded tax levy is nearly half a percent different from the exact value, thus introducing considerable inaccuracy.  Lee-Adrian's calculations using the rounded tax levy resulted in the following inaccuracies, all of which appear in today's story:

1. “The Legislature budget's property tax levy would increase 8.9 percent.”  The correct value is 9.3 percent.
2. “Under that budget, the property tax rate could increase 13.9 percent in 2010 ...”  The correct value is 14.3 percent, as I stated in this blog a week ago.
   
3. “... to $2.89 per $1,000 of assessed value.”  The correct value is $2.91.  Lee-Adrian had already published this correct value in her December 11 story.  Why did she think she should change it?
   

Today's Story Gets Some Tax Information Right — By Accident

Today's story also contains corresponding tax information regarding the effect of the Steinhaus vetoes, culminating in the statement that “the property tax rate could increase 9.2 percent”.  Are all these numbers inaccurate also?  No.  Although Lee-Adrian presumably used the rounded tax levy of $98.8 million, it just so happens that the rounded tax levy differs from the true tax levy in this case by less than one part in ten thousand.  This good luck allows all the published results regarding the Steinhaus vetoes to be correct.

Who Is Responsible For the Calculated Tax Information?

The December 11 story stated that the (inaccurate) 14.6 percent tax rate increase was provided by the Legislative staff, but Lee-Adrian confirmed to me that she calculated it herself.  Today's story states the following:

The Journal calculated the 2010 property-tax rates for the Legislature budget and a budget with vetoes based on numbers Steinhaus released Tuesday. Legislature staff confirmed the 2010 tax rates were correct. The County Executive's Office did not respond.

I spoke today with Fred Knapp, assistant to Legislative Chairman Roger Higgins.  My understanding of our conversation is that Knapp had indeed spoken with Lee-Adrian about these tax numbers, but that he did not confirm the correctness of her calculations.  Knapp seemed to be well aware of the necessity of preserving precision in tax rate calculations, and he graciously provided me with the exact tax levy changes needed to perform the high-precision calculations.

Credibility Gap

It hardly needs saying that the credibility of the Poughkeepsie Journal suffers if it publishes two different tax rate increases (14.6 percent and 13.9 percent) for the same amended budget, and both numbers are wrong.  This is especially true since it just isn't that hard to get it right.  I'm extremely pleased to see that the Poughkeepsie Journal has finally published the County tax rate increase information.  But is it too much to ask that they publish the correct numbers?

Poughkeepsie Journal Gets It Almost Right

A front-page story in the December 11-th Poughkeepsie Journal by reporter Jenny Lee-Adrian, headlined “Taxpayers fume over planned rate hike,” on property taxes for Dutchess County Government, focuses attention where it belongs:  On the tax rate and the tax rate increase.  This story is a marked improvement over most of the Poughkeepsie Journal's past coverage of local property tax issues, of which I have been highly critical.  In my post Poughkeepsie Journal Fails Truth-in-Taxing Test, I state:

Readers of the Poughkeepsie Journal need the tax rate and change in tax rate in order to understand the essence of what's happening. This means they need the change in the tax rate in the headline itself, in the lead sentence, and possibly also in the sidebar information — not buried in the tenth paragraph, or omitted entirely.

Lee-Adrian's story comes closer to meeting this standard than any other local property tax story I've seen in the Poughkeepsie Journal in recent months, though there is still some room for improvement.

1. The headline alludes to the fact that the planned tax rate would increase.  Good.  Even better would be to mention the amount (percent) of tax rate increase in the headline.
2. The lead sentence is, “Amid an economy in crisis, Dutchess County residents are outraged their county property tax rate would increase by 14.6 percent next year.” [emphasis added]  Lee-Adrian gets full credit for stating the tax rate increase in the lead sentence.  Unfortunately for readers, the actual percent increase is 14.3.  Although her story claims that the 14.6 value was provided by “the Legislative staff,” Lee-Adrian has confirmed that she calculated the percent increase herself, and that she used rounded tax rates.  Using rounded tax rates introduces noticeable inaccuracies.  This is why the tax rate increase in her story is inaccurate.  My calculation uses the high-precision tax rates that would be used to compute individual tax bills.
   
3. The sidebar information (in the print edition) displays the property tax rates, not only for 2009 and the amended 2010 tax years, but even for tax years going back to 2006.  It even displays the budgets and property tax levies for all years.  Good, and good.  Even better would be to display the tax rate increases (percents) from one year to the next.  In my view, the tax rate increases are more important than, for example, the tax levy information that is included in the sidebar.
   
4. The story mentions the fact that the original Steinhaus budget increases the tax rate “... from $2.54 in 2009 to $2.66 per $1,000 of assessed value in 2010.”  This is a key piece of information when comparing to the county legislature's amendments, and it's good that it appears in the story.  Unfortunately, this quote is buried in the 14-th paragraph of the story, on the second page continuation in both the print and web editions.  Even more important than this quote is the fact that the Steinhaus budget represents a 4.6 percent increase in the tax rate.  This crucial fact appears nowhere in this story (and as far as I know, in no other Poughkeepsie Journal story).   In my view, readers should have been informed upfront that while the legislative amendments yield a tax rate increase of 14.3 percent, Steinhaus' original budget yields a tax rate increase of 4.6 percent.
   

How To Encourage Publication of Tax Rate Increases?

A possible outcome of my criticism of Lee-Adrian's tax rate increase calculation (Item 2 above) is that Poughkeepsie Journal reporters (if they read my blog) will be discouraged from publishing property tax rate increases.  This would achieve the exact opposite of my purpose.  I can think of two obvious ways to avoid this outcome:

1. Reporters can calculate tax rate increases correctly, just by using high-precision tax rates.  A high-precision tax rate is simply the exact tax levy divided by the exact market value.  And be sure to retain all significant figures in the quotient!
2. Reporters can request public officials to do this calculation for them.  However, reporters should be prepared for significant resistance on the part of public officials, because the officials know that tax rate information puts the tax situation in the most unfavorable light in a time of decreasing property values.  Officials much prefer to focus on tax levies and typical tax bills, which make the tax situation seem not as bad as it really is.

My hope is that the Poughkeepsie Journal will employ some combination of the above methods to provide its readers with tax rate increase data essential to an informed public.

County Legislature Increases Tax Rate 14.3 Percent

A front-page story in today's Poughkeepsie Journal by reporter Jenny Lee-Adrian, headlined “Legislature OKs Budget, Raises Property Tax Levy”, features a prominent diagram (in the print edition) with the following contents:

• What Steinhaus Proposed:  0% property tax levy increase
• What County Legislature Changed:  9.4% property tax levy increase

So why does the title of this post say “14.3 percent”?  If you've been following this blog the last few months, you already know the answer.  It's because the Poughkeepsie Journal (and Steinhaus, and the legislators) are talking about tax levy, and I'm talking about tax rate.  As I've argued repeatedly in this blog, the most important thing for taxpayers is the tax rate.  The tax levy is just smoke, designed to make the increase seem smaller than it really is.  If I were writing this news story, my diagram would say:

• What Steinhaus Proposed:  4.6% property tax rate increase
• What County Legislature Changed:  14.3% property tax rate increase

Both property tax rate increases are with respect to the 2009 tax rate of $2.54 per thousand dollars of market value.  Steinhaus' proposed 2010 tax rate is $2.66, and the legislature's is $2.91.  These numbers are easy to compute from the property tax levies mentioned in the story.  As I mentioned in my earlier post on this subject, the reason the tax rates increase more than the tax levies is that the market value of Dutchess County has decreased by four and a half percent in the last year.

One can hardly blame the politicians for trying to put the best face on a bad situation, but the Poughkeepsie Journal could do a better job of informing its readers.  Property taxpayers are in for a lot worse news than they'd think by reading the Poughkeepsie Journal.

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.

Proposed County Budget Increases Tax Rate 4.6 Percent

If you've been following reports about the Dutchess County 2010 Tentative Budget, you probably know that Dutchess County Executive William Steinhaus' plan freezes the 2010 property tax levy at the 2009 level.  This plan makes it sound as though taxes won't be going up. Great news for property taxpayers in these difficult economic times, right?
 
Wrong! In reality, the plan calls for a 4.6 percent increase in the property tax rate, from $2.54 to $2.66 per thousand dollars of market value.  And the tax rate is all that matters.  You can verify the 2009 and projected 2010 tax rates yourself from the County's table, Property Tax Levy & Rate.  (For details, see below.)  The tax rate increase occurs because even though the tax levy holds steady, the market value of Dutchess County has fallen four and a half percent in the last year.

Why haven't you heard about the Dutchess County tax rate increase before?  Because government officials don't want to talk about it.  Better to talk about the tax levy, or the typical tax bill, since they make the tax hike sound smaller than it really is.  It's just one more example of the dirty little secret of property taxes. I've written about this secret so many times in this blog that I've lost count.  For a summary of how the Poughkeepsie Journal has failed to pick up on this story in half a dozen local jurisdictions (each of which I've blogged about separately), see Poughkeepsie Journal Fails Truth-in-Taxing Test.

Steinhaus Press Release Misleads

It's understandable that Steinhaus would not want to mention the 4.6 percent tax rate increase in his budget.    But it's disingenuous for him to introduce tax rates into a misleading characterization of opponents' proposals.  In a December 4 press release, Steinhaus is quoted  as saying:

County legislators must now make the final choice either to focus on satisfying requests for more spending from special interest groups and raise county property taxes nearly 22 percent to fund all of these programs, or they can choose to control spending to keep property taxes flat.

This statement is more than a little misleading.  The 22 percent number is correct only if it refers to the total increase in the property tax rate from 2009, including both the 4.6 percent increase in the Steinhaus budget and the legislators' additions, which alone comprise only a 16 percent increase.  The “keep property taxes flat” cannot refer to any tax rate, because the tax rate is not flat under Steinhaus' budget. So it's not 22 versus zero.  It's either 22 versus 4.6, or 16 versus zero.  Take your pick.

The Steinhaus press release concludes with the following statement:

Last year, the Democrat Majority adopted a budget that raised county property taxes an unprecedented 11% to respond to special interest demands.  County property taxpayers simply cannot afford a 22% tax increase again this year.

One can determine from the Property Tax Levy & Rate that the county property tax rate increased 11 percent from 2008 to 2009.  Whether county taxpayers can afford a 22 percent tax (rate) increase again this year is debatable.  However, Steinhaus apparently thinks they can afford a 4.6 percent tax rate increase, because that's what he's proposing.

Verifying the Tax Rate Increase:  In the table, Property Tax Levy & Rate, note that “True Value Assessments” is another name for “market value”.  The property tax rate is simply the property tax levy divided by the market value and multiplied by $1,000.  The property tax rates in this table are measured in dollars per thousand dollars of market value.  You should ignore the misleading note at the bottom of this table, 

Comparisons of rates from year to year are not valid because of equalization rate adjustments.  

Comparisons of these county property tax rates from year to year are perfectly valid. Furthermore, equalization rate adjustments have no effect on any of the numbers in this table.  I have determined that this misleading statement has appeared in County budget documents for many years, unchallenged until my conversations today with County officials.  I am happy to report that Dutchess County Director of Real Property Tax Service Agency Kathy Myers has assured me she will work with the Budget Office to “clarify” this statement in future years.

Fairview Fire Tax Dollars at Work

The Fairview Firefighters Union, IAFF Local 2623, invited me to participate in a live fire training drill at the Dutchess County Fire Training Center on November 12. I had the opportunity to go into a burning building to rescue a victim (fortunately, a dummy), and to fight the fire.  A respirator — and very close supervision by Fairview's finest — kept my body and soul together.  I also got to climb the Department's 100 foot ladder.  The photo shows me flanked by my two excellent guides, Fire Captain Chris Maeder and Union President Rob Ridley.
 
Safety and Risk

Although I felt pretty safe in the controlled training situation, it was obvious that firefighters could be at significant risk in a real emergency.  For me, the training session was only an adventure, but for firefighters, it's a way to lower their risk and increase their effectiveness when on a call.  Participating in these exercises increased my respect for the dangerous job firefighters do every day.

What Does All This Have To Do With Fire Taxes?

Two things:

1. Fairview firefighters are highly trained professionals (or in some cases highly trained volunteers).  Their compensation is the main component of the fire tax levy in predominantly career fire districts such as Fairview.  Our fire tax dollars primarily pay the people who save our lives and property.
   
2. Fairview firefighters use a great deal of specialized equipment to fight fires, to rescue victims, and to keep firefighters safe.  On any given call, only a small fraction of this equipment is used, but different calls will use different equipment.  The effectiveness of the fire department on a given call depends in part on having the right tool for the job at hand, as well as knowing how to use it. These tools cost money.  Most of this money comes from the local fire tax levy, although some expensive equipment, such as the “jaws of life”, is paid by other sources, such as federal or state grants. 
   

House Fire

By chance, I happened to witness a Fairview Fire Department team responding to a house fire last evening.  It took only 3 minutes after dispatch for this team to appear at the house with a fire truck, and only a few more minutes to get the fire under control.  This rapid response prevented major damage to the residence.  The rapid response was possible only because the team was already at the fire house, ready to go.  In other words, it was only because of Fairview's 24x7 career (paid) staff that this house incurred minor damage.  If it were necessary to wait for volunteers to arrive from other locations, this house would most likely have suffered major damage.

What Do Our Fire Tax Dollars Buy?

Fire tax is a hopelessly dry and geeky topic.  It's just a bunch of numbers on a piece of paper, or in cyberspace.  My report advocating consolidation shows dramatic differences in fire tax rates among fire districts in Dutchess County, with Fairview having the highest fire tax rate.  But what do the dramatically different fire tax rates buy?  Do higher fire tax rates tend to provide better protection than lower ones?  How much better?  What does “better protection” really mean?  The training drill and the house fire allowed me to touch and feel what the Fairview fire tax dollars buy:  Fairview fire taxes buy the ability to contain some fires in their early stages, limiting the threat to human life and the damage to property. 

Based on what I've seen and experienced, it is quite plausible to me that fire districts with low tax rates (typically staffed predominantly by volunteers) may tend to have longer response times to emergencies, and therefore less favorable outcomes.  In other words, you get what you pay for.  Is the high level of service in Fairview worth the high cost?  Undoubtedly, different taxpayers will answer this question differently.  This is the beginning of a new aspect of learning about fire districts for me.  I would like to see how things work in a predominantly volunteer fire district, in order to compare and contrast.