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Property taxes are not billed to all real properties, only to taxable properties. Some properties are exempt from taxes because they belong to the government or to not-for-profit institutions such as schools, hospitals, and churches. In most jurisdictions, exempt properties comprise only a small fraction of the total market value of the jurisdiction. Not so in the Fairview Fire District. Fairview is home to three large not-for-profit (NFP) institutions (Marist College, St. Frances Hospital, and Dutchess Community College) in addition to numerous smaller government and private institutions. For more details, see page 11 of The Big Three Fire Districts of Dutchess County. This might not be a problem for a large fire district, but Fairview is a very small district, comprising only 4.5 square miles. Therefore, the percent of Fairview's market value that is exempt from fire tax — Fairview's exempt percent — is large.
Although the NFPs pay no fire tax, they still account for about half of the fire and emergency service calls of the Fairview Fire District. Property taxpayers in Fairview pay not only their own share of fire tax, but they also pay the “NFP share”. Fairview's large exempt percent is a major factor in Fairview's high fire tax rate. Fairview has the highest fire tax rate in Dutchess County, and possibly the highest fire tax rate in New York State. Many property taxpayers in Fairview are understandably resentful of their high fire taxes, and they correctly attribute much of the cause to the fact that they are paying the NFP share. How large is the NFP share? That is, what percent of the Fairview Fire District's total market value is exempt from property tax? Briefly, how much is Fairview's exempt percent?
History of Exempt Percent Misstatement
Unfortunately, there has been a long history of misstatement of Fairview's exempt percent. I have traced these misstatements to two documents. The first document is a single-page undated anonymous sheet, probably from around 2005, claiming that Fairview is 77 percent exempt. All likely parties have disclaimed authorship of this document, and there seems no way to trace its conclusions to primary sources. Therefore, this document cannot be relied upon.
The second document is a 5-volume report, Land Use Analysis & Assessment Report, prepared for the Fairview Fire District by consultant company C. T. Male Associates in 2006. Only two sentences in this report refer to Fairview's exempt percent, and even these sentences discuss its value in quite a roundabout way. Unfortunately, Fairview officials incorrectly interpreted the circumlocutory language in the report to mean that Fairview is 73 percent exempt.
And so it was that by April of 2008, an urban legend had become established that 70 to 80 percent of Fairview's market value is tax exempt. Numbers in this range were widely quoted by Fairview officials, by residents, by the Poughkeepsie Journal, and even by state and county officials. By June of 2008, State Senator Stephen Saland, State Assemblyman Joel Miller, and Dutchess County legislator Jim Doxsey were all in the process of submitting legislation intended to alleviate the burden on property taxpayers in Fairview and any other fire districts with exempt percents of 50 or more. Fairview's exempt percent had clearly become a potent political weapon in attempts to obtain tax relief.
Busting the Urban Legend
It was at this time that I began my own investigation of Fairview's exempt percent. On June 18, 2008, I posted a 25-page report Tax Exempt Properties in Fairview to my newly-created website Fairview Fire Tax. This report showed that Fairview is 41.7 percent exempt. My result was independently confirmed in a memo issued by Dutchess County Real Property Tax Director Kathleen Myers. Thus, none of the state and county initiatives would have benefited Fairview as intended, because Fairview's exempt percent was not nearly so high.
Sen. Saland, Assemblyman Miller, and Legislator Doxsey were quick to recognize the legitimacy of my analysis and withdraw their bills. Although some local advocates initially responded to my report with skepticism and even hostility, my result eventually became generally accepted, and the urban legend gradually died away. But local officials were clearly embarrassed by their acceptance and promotion of wildly inaccurate exempt percents for Fairview, and they have become highly sensitive to any misstatements of Fairview's exempt percent.
Busting the Corrected Exempt Percent
Upon calculating Fairview's exempt percent for tax years 2009 and 2010, I found that the value had jumped up dramatically to 47.5 and 47.9 percent, respectively. Then in March 2010, I made a remarkable discovery: Fairview's exempt percent of 41.7 that I had calculated in 2008 is wrong! Well, 41.7 percent is still the “official” number since it is based on the official assessment roll for 2007. Therefore it is “right” by definition. However, it is still wrong by any reasonable judgment. That's because a blunder by the Town of Poughkeepsie Assessor's Office had caused $120 million in exempt property to be omitted from the official assessment roll for 2007! Correcting for this blunder causes Fairview's effective 2008 exempt percent to be 47.9.
Assuming this correction, Fairview's exempt percent has been about 47.7 percent plus or minus 0.2 percent for tax years 2008, 2009, and 2010. That's where things have stood ... until last month.
Pace Study Misstatement
The Fairview Fire District has contracted with Pace University's Michaelian Institute for Public Policy and Management to study the feasibility of Fairview consolidating with one or more neighboring fire districts. New York State awarded Fairview a $45,000 grant two years ago to pay for this study, known locally as “the Pace study”. On March 22, 2012, the study's Principal Investigator, Michael Genito, presented the Study's initial findings at a public meeting in the Town of Poughkeepsie's Town Hall. Page 9 of this presentation included the statement that in Fairview “55% of real property value is tax-exempt”. I was one of a number of people at the public meeting who thought the 55 percent figure seemed out of line with Fairview's recent history of exempt percents, which have all been close to 47.7 percent.
Still, my last calculation was two years old, and it was theoretically possible, though unlikely, that Genito's figure could be correct for 2012. However, it is not. After independently obtaining the latest tax assessment rolls from Dutchess County's Real Property Tax Service Agency, calculating Fairview's exempt percent, and comparing with Genito's calculations (which he generously provided me), I found that for the 2012 tax year, 51.7 percent of Fairview is tax exempt. I'm pleased to report that as of today, Genito concurs with this result, and plans to update the Pace study website accordingly.
Genito's primary mistake in calculating Fairview's exempt percent was that he simply added the assessed valuations of Hyde Park with those of Poughkeepsie, without first converting Hyde Park's assessed valuations to market value using the equalization rate. This is the same blunder that I found committed in another context by the Poughkeepsie Journal. But unlike the Poughkeepsie Journal, Genito immediately recognized his error once it was pointed out. After correcting for this error, Genito's calculation yields an exempt percent of 51.6, almost the correct value. The remaining 0.1 percent is accounted for by a technicality: Genito failed to include $1.75 million of exempt market value from two properties in Hyde Park that are only partially in the Fairview Fire District.
Fairview's Exempt Percent Has Substantially Increased
Although Fairview's current exempt percent is not as great as claimed in the Pace study's initial findings, it is still nevertheless substantially greater than Fairview's historical value of 47.7 percent. The obvious question is, Why? This topic will be the subject of a forthcoming post.
25 Haziran 2012 Pazartesi
Joel Miller's Flawed Legislation for Fire District Budget Empowerment
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New York State Assemblyman Joel Miller has introduced legislation to provide for public vote on fire district budgets in the November general election. Under current New York State law, fire district budgets are controlled by the district's board of fire commissioners. Miller's legislation A9762A, called the Fire District Budget Empowerment Act, shifts the approval of fire district budgets from the fire commissioners to the general public. Miller announced his popular vote initiative in an April 22, 2012, Valley Views article in the Poughkeepsie Journal.
Popular Vote on Budget Is Inconsistent With Other Local Governments
As I see it, popular vote on fire district budgets is a risky departure from most governance in this country. There is no public vote on the federal budget, there is no public vote on the New York State budget, there is no public vote on the Dutchess County budget, or on city or village budgets. Instead, the general public votes for representatives (government officials such as legislators, councilmen, etc.) who in turn decide on agency budgets. This is the principle of representative democracy, one of the foundations of this country. In the case of fire districts, the people vote for fire commissioners, who in turn control the budget.
Direct Democracy Is Seldom Used But Often Problematic
Miller's initiative is an example of direct democracy, in which policy decisions are made by popular vote, bypassing or overriding government officials. Direct democracy for economic decisions is used only sparingly in the United States. In California, many major economic decisions beginning with the infamous Proposition 13 have been made by popular vote, with disastrous results.
The founding fathers were very much opposed to direct democracy (also called “pure democracy”), according to Wikipedia. John Witherspoon, a signer of the Declaration of Independence, said, “Pure democracy cannot subsist long nor be carried far into the departments of state – it is very subject to caprice and the madness of popular rage.” The American colonists favored representative democracy — not direct democracy. That's why they said “No taxation without representation.” They didn't say “No taxation without popular vote.”
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government taxing authority in New York State, along with Towns, cities, villages, and counties. I know of no reason why fire districts should be governed differently than any of these other taxing authorities. In my view, fire districts should continue to use the same budget approval process as most other local taxing authorities.
Incorrect and Misleading Statements in Valley View Article
Miller's Valley View article contains misleading statements, and at least one statement that is just plain wrong. In the context of the Fairview Fire District's high fire tax rate, Miller writes:
Miller misleadingly writes, “This legislation will permit public participation in fire district budgets ...,” as if public participation in the fire district budget process doesn't already exist. But New York State law already requires a fire district to publicize its tentative budget and to hold a public hearing on the budget, during which public input is received. In this way again, state law provides for public participation in the fire district budget process just as it does in most other kinds of local government, including counties, cities, villages, and schools.
This Is My Opinion
Most of my previous posts have been nonpartisan, focusing on objective facts. This post (except for the last section) is clearly my own opinion. Therefore, it's marked with an “Opinion” label. As always, I welcome your reasoned comments.
Popular Vote on Budget Is Inconsistent With Other Local Governments
As I see it, popular vote on fire district budgets is a risky departure from most governance in this country. There is no public vote on the federal budget, there is no public vote on the New York State budget, there is no public vote on the Dutchess County budget, or on city or village budgets. Instead, the general public votes for representatives (government officials such as legislators, councilmen, etc.) who in turn decide on agency budgets. This is the principle of representative democracy, one of the foundations of this country. In the case of fire districts, the people vote for fire commissioners, who in turn control the budget.
Direct Democracy Is Seldom Used But Often Problematic
Miller's initiative is an example of direct democracy, in which policy decisions are made by popular vote, bypassing or overriding government officials. Direct democracy for economic decisions is used only sparingly in the United States. In California, many major economic decisions beginning with the infamous Proposition 13 have been made by popular vote, with disastrous results.
The founding fathers were very much opposed to direct democracy (also called “pure democracy”), according to Wikipedia. John Witherspoon, a signer of the Declaration of Independence, said, “Pure democracy cannot subsist long nor be carried far into the departments of state – it is very subject to caprice and the madness of popular rage.” The American colonists favored representative democracy — not direct democracy. That's why they said “No taxation without representation.” They didn't say “No taxation without popular vote.”
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government taxing authority in New York State, along with Towns, cities, villages, and counties. I know of no reason why fire districts should be governed differently than any of these other taxing authorities. In my view, fire districts should continue to use the same budget approval process as most other local taxing authorities.
Incorrect and Misleading Statements in Valley View Article
Miller's Valley View article contains misleading statements, and at least one statement that is just plain wrong. In the context of the Fairview Fire District's high fire tax rate, Miller writes:
Fairview alone had fire district tax rates nearly 10 times higher than 27 other towns in Dutchess County in 2010.This statement is absurd, since there are only 20 towns in Dutchess County. Well, perhaps Miller meant “fire districts” instead of “towns”, since there are about 31 fire districts in Dutchess County. I checked with Miller's office, and was assured that yes, that's what he meant. Well, wrong again! My tax rate analysis from 2009 shows (page 14) that Fairview's tax rate was 10 times higher than 13 other fire districts — not 27 other fire districts. Miller's research staffer has conceded that the Valley Views statement — even after changing “towns” to fire districts” — is incorrect.
Miller misleadingly writes, “This legislation will permit public participation in fire district budgets ...,” as if public participation in the fire district budget process doesn't already exist. But New York State law already requires a fire district to publicize its tentative budget and to hold a public hearing on the budget, during which public input is received. In this way again, state law provides for public participation in the fire district budget process just as it does in most other kinds of local government, including counties, cities, villages, and schools.
This Is My Opinion
Most of my previous posts have been nonpartisan, focusing on objective facts. This post (except for the last section) is clearly my own opinion. Therefore, it's marked with an “Opinion” label. As always, I welcome your reasoned comments.
Joel Miller Just Can't Get Fairview Facts Straight
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“Everyone is entitled to his own opinion, but not his own facts.” Daniel Patrick Moynihan
Try as he might, New York State Assemblyman Joel Miller just can't get his facts right regarding the Fairview Fire District. On his first try, in a Poughkeepsie Journal Valley Views article on April 22, 2012, he wrote
Flawed Staff Work
In preparation for that blog post, I spoke with the staffer for Miller who had generated this misstatement. This staffer had already reviewed some of my own reports, including The Big Three Fire Districts of Dutchess County. It became clear to me that this staffer was not well prepared to interpret quantitative information, and the staffer readily conceded as much. My instinct was that if Miller were to release a corrected statement, it might also be wrong. Because I genuinely wanted facts to be correctly stated, I suggested a corrected statement, and I offered to preview any proposed new statement about Fairview. I never heard from Miller or any of his staffers about this matter.
My instinct turned out to be correct. On April 26, Miller sent a press release to each Fairview Fire Commissioner. This press release was essentially a rewording of his Valley Views article, except that the incorrect statement about Fairview was replaced by a new incorrect statement about Fairview:
And so it is in this case. Half the non-big-three fire districts had tax rates greater than the average of the non-big-three, and half had tax rates less than the average. So Fairview's tax rate was eight times higher than only 14 other fire districts — not 30 other fire districts.
Incidentally, “30 other fire districts” in Miller's statement is wrong too. There were only 30 fire districts in the whole analysis, and the big three fire districts were excluded from this average, so there could only be 27 non-big-three districts. The (weighted) average of these 27 was greater than 14 of these districts, and smaller than 13 of these districts, as one would expect. For five of these districts, Fairview was only about four times higher — not 8 times higher as Miller claimed.
Miller Has Been Ambivalent About Accuracy
This post isn't about flawed staff work. The principal is responsible for the work of his staff. If Miller had any doubt whether his staff could handle the fire tax rate issue, the doubt was resolved the first time the mistake was made. At that point, Miller knew — or should have known — that his staff didn't know what they were doing on this issue, and so were unlikely to make a proper correction on their own. Miller could have arranged for an independent review of his proposed “correction” before it was released. (I would have been glad to accommodate.)
But this post isn't just about fire taxes either. Joel Miller represents 6 of Dutchess County's 20 towns in the New York State Assembly. Yet he allowed himself to write “27 other towns in Dutchess County,” a gaffe that he or any member of his staff could easily have corrected without knowing anything about fire tax rates.
Taken together, these mistakes show Miller to have been ambivalent about the accuracy of his factual statements. Such lapses affect his credibility.
Try as he might, New York State Assemblyman Joel Miller just can't get his facts right regarding the Fairview Fire District. On his first try, in a Poughkeepsie Journal Valley Views article on April 22, 2012, he wrote
Fairview alone had fire district tax rates nearly 10 times higher than 27 other towns in Dutchess County in 2010.I pointed out in Joel Miller's Flawed Legislation for Fire District Budget Empowerment that there are only 20 towns in Dutchess County, and that even if he meant “fire districts” instead of “towns” (which would have made more sense), his statement is still not even close to correct.
Flawed Staff Work
In preparation for that blog post, I spoke with the staffer for Miller who had generated this misstatement. This staffer had already reviewed some of my own reports, including The Big Three Fire Districts of Dutchess County. It became clear to me that this staffer was not well prepared to interpret quantitative information, and the staffer readily conceded as much. My instinct was that if Miller were to release a corrected statement, it might also be wrong. Because I genuinely wanted facts to be correctly stated, I suggested a corrected statement, and I offered to preview any proposed new statement about Fairview. I never heard from Miller or any of his staffers about this matter.
My instinct turned out to be correct. On April 26, Miller sent a press release to each Fairview Fire Commissioner. This press release was essentially a rewording of his Valley Views article, except that the incorrect statement about Fairview was replaced by a new incorrect statement about Fairview:
Fairview alone had fire district tax rates nearly eight times higher than 30 other fire districts in Dutchess County in 2010.The irony is that the above statement appears to be a mis-quote of a statement in my own report, which reads
Fairview’s tax rate is nearly eight times the average of the non-big-three districts.Apparently the staffer thought the word “average” in my statement didn't really mean anything important, and could just be omitted! But as most European high school students know, an average of a bunch of numbers must be smaller than some of the numbers being averaged. In fact, for ordinary data like tax rates, roughly half the numbers can be expected to be greater than the average. Maybe even much greater.
And so it is in this case. Half the non-big-three fire districts had tax rates greater than the average of the non-big-three, and half had tax rates less than the average. So Fairview's tax rate was eight times higher than only 14 other fire districts — not 30 other fire districts.
Incidentally, “30 other fire districts” in Miller's statement is wrong too. There were only 30 fire districts in the whole analysis, and the big three fire districts were excluded from this average, so there could only be 27 non-big-three districts. The (weighted) average of these 27 was greater than 14 of these districts, and smaller than 13 of these districts, as one would expect. For five of these districts, Fairview was only about four times higher — not 8 times higher as Miller claimed.
Miller Has Been Ambivalent About Accuracy
This post isn't about flawed staff work. The principal is responsible for the work of his staff. If Miller had any doubt whether his staff could handle the fire tax rate issue, the doubt was resolved the first time the mistake was made. At that point, Miller knew — or should have known — that his staff didn't know what they were doing on this issue, and so were unlikely to make a proper correction on their own. Miller could have arranged for an independent review of his proposed “correction” before it was released. (I would have been glad to accommodate.)
But this post isn't just about fire taxes either. Joel Miller represents 6 of Dutchess County's 20 towns in the New York State Assembly. Yet he allowed himself to write “27 other towns in Dutchess County,” a gaffe that he or any member of his staff could easily have corrected without knowing anything about fire tax rates.
Taken together, these mistakes show Miller to have been ambivalent about the accuracy of his factual statements. Such lapses affect his credibility.
Why Has Fairview's Exempt Percent Increased?
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The Fairview Fire District has the highest fire tax rate in Dutchess County, and possibly the highest fire tax rate in New York State. One of the reasons for Fairview's high tax rate is that roughly half of Fairview's market value is exempt from paying fire taxes, but the exempt half still accounts for half the fire and emergency service calls to the Fairview Fire District. Fairview's taxable property owners pay not only their own share of fire tax, but also pay for service to the exempt properties. Fairview residents and property owners have had a longstanding interest in knowing exactly what percent of Fairview is exempt, and how Fairview's exempt percent may be changing over time. Unfortunately, there has been a history of misstatement of Fairview's exempt percent, which I have attempted to correct. See Fairview Fire District's Exempt Percent Is Misstated — Again.
Fairview's Exempt Percent
The following table shows a 5-year history of Fairview's exempt percent, according to my calculations:
Exempt Value has Increased While Taxable Value Decreased
Property values have been falling every year in Dutchess County since the 2008 economic meltdown. Fairview's taxable market value fell 11.8 percent between the 2010 and 2012 tax bills. If Fairview's exempt market value had also fallen 11.8 percent during this period, Fairview's exempt percent would have stayed the same as 2010, at 47.9 percent. But Fairview's exempt market value did not fall 11.8 percent — it actually increased by 2.5 percent! In terms of dollars, Fairview's exempt market value for the 2012 tax bill was about $74 million greater than it would have been if Fairview's exempt percent had remained constant. This $74 million caused Fairview's exempt percent to increase from 47.9 to 51.7 in two years. The $74 million arises from two sources:
One might assume that the dramatic increases in four parcels simply reflect major construction projects on these parcels. Surprisingly, this assumption is true only for one of the four parcels. Marist College's parcel at 30 Fulton Street (Parcel number 134689-6162-05-035776-0000) increased in value from $240,000 in 2010 to $17,760,000 in 2012 because student residence halls were constructed on that property between those years.
The other three parcels, detailed in the following table, are part of the water and sewer systems for the City and Town of Poughkeepsie:
The above three parcels have had no significant construction or other actual increase in market value in many years. These parcels have just been improperly assessed for at least 5 years:
Why did exempt parcels decrease in value less than taxable parcels?
While taxable parcels fell in value 11.8 percent in two years, most exempt parcels fell only about 4 percent. As I understand Taber's explanation for this, many exempt properties are difficult to assess because they don't generally appear on the open market. People don't generally buy or sell municipal sewage treatment plants, college academic buildings, or hospital atriums. Changes in the market value of these properties are difficult to gauge because there really isn't a market for these properties. Taber also mentioned that “commercial” properties tend to decrease in value more slowly than residential properties.
It may also be that less attention is given to properly assessing exempt properties simply because the stakes are lower. For taxable parcels, property owners pay real money proportional to the assessment. Taxpayers want assurance that they are paying no more than necessary, while municipal governments receiving taxes want assurance that they are collecting the full amount of money from every taxable parcel. Therefore, tax assessors are under considerable pressure to make assessments of taxable properties that are neither too high nor too low. For exempt properties, these incentives are not present. Inaccurate — apparently even wildly inaccurate — assessments aren't so much noticed.
Summary
There isn't one simple answer as to why Fairview's exempt percent has increased in the last two years. According to my analysis, there are three contributors, in order of decreasing importance:
Pattern of Under-Assessment of Exempt Properties
The careful reader will have noticed two reasons why Fairview's exempt percent may not be as meaningful as one would like. The first is that gross under-assessment of high-value exempt properties is a bigger issue than previously assumed. Two years ago, I found that the St. Frances Hospital complex had been under-assessed by over $100 million. At the time, I assumed this blunder was a one-time event that would be unlikely to be repeated. Now there's a second instance: Municipal water and sewer parcels have been under-assessed by over $100 million. Most of this under-assessment will not be corrected until Fairview's 2013 tax bill. This pattern will continue: The recent construction of dormitories at Dutchess Community College — worth tens of millions of dollars — will not be reflected in Fairview's 2013 exempt percent. Taber told me she didn't have time to add the DCC dorms to the current assessment roll, the basis for Fairview's 2013 tax. The omission of such major contributors to exempt value results in underestimation of the true exempt percent.
Unequal Depreciation
The second reason why Fairview's exempt percent may not be so meaningful is that market forces apparently do not affect taxable and exempt properties equally. Nearly half (45 percent) of the increase in Fairview's exempt percent in the last two years is due to the fact that the average exempt property lost only one third as much value as the average taxable property did. At least, that's what the assessment rolls say. Do the assessment rolls accurately reflect exempt property values? There is some reason to wonder. If exempt properties have been overvalued in the last few years, Fairview's corresponding exempt percent is artificially high.
Fairview's Exempt Percent
The following table shows a 5-year history of Fairview's exempt percent, according to my calculations:
| Year of Tax Bill | Exempt Percent |
|---|---|
| 2008 | 47.9* |
| 2009 | 47.5 |
| 2010 | 47.9 |
| 2011 | 50.8 |
| 2012 | 51.7 |
* Listed exempt percent for 2008 is after correcting for a blunder by the Town of Poughkeepsie Assessor's Office.Note that the 2008 “land” tax bill (including the fire, town, county, and other taxes) corresponds to the 2007 assessment roll, and so forth. This table shows that for the years 2008 — 2010, Fairview's exempt percent has been 47.7 plus or minus 0.2 percent. However, beginning in 2011, Fairview's exempt percent has noticeably increased, standing at 51.7 percent for 2012 tax bills. What accounts for this 4 percent increase in Fairview's exempt percent over two years? This post will examine this question.
Exempt Value has Increased While Taxable Value Decreased
Property values have been falling every year in Dutchess County since the 2008 economic meltdown. Fairview's taxable market value fell 11.8 percent between the 2010 and 2012 tax bills. If Fairview's exempt market value had also fallen 11.8 percent during this period, Fairview's exempt percent would have stayed the same as 2010, at 47.9 percent. But Fairview's exempt market value did not fall 11.8 percent — it actually increased by 2.5 percent! In terms of dollars, Fairview's exempt market value for the 2012 tax bill was about $74 million greater than it would have been if Fairview's exempt percent had remained constant. This $74 million caused Fairview's exempt percent to increase from 47.9 to 51.7 in two years. The $74 million arises from two sources:
- Four exempt parcels saw dramatic increases in assessed value, for a total of about $41 million.
- Fairview's other exempt parcels fell in value by only about 4 percent on average, rather than by the 11.8 percent decrease for taxable parcels. These exempt parcels are assessed at approximately $33 million more than they would have been if they'd depreciated in proportion to taxable parcels.
One might assume that the dramatic increases in four parcels simply reflect major construction projects on these parcels. Surprisingly, this assumption is true only for one of the four parcels. Marist College's parcel at 30 Fulton Street (Parcel number 134689-6162-05-035776-0000) increased in value from $240,000 in 2010 to $17,760,000 in 2012 because student residence halls were constructed on that property between those years.
The other three parcels, detailed in the following table, are part of the water and sewer systems for the City and Town of Poughkeepsie:
| Parcel number 134689-6062-02 -xxxxxx-0000 | 827844 | 835560 | 818562 |
|---|---|---|---|
| Address | 3431 North Rd | Kittredge Pl | 173 Kittredge Pl |
| Land use class | 822 (water supply) | 853 (Sewage) | 853 (Sewage) |
| Owner | City of Poughkeepsie and Town | City of Poughkeepsie | Town of Poughkeepsie |
| 2008 tax bill | $4,274,000 | $111,400* | $159,300 |
| 2009 tax bill | $4,274,000 | $235,000* | $316,000 |
| 2010 tax bill | $4,274,000 | Not in roll | $316,000 |
| 2011 tax bill | Not in roll | Not in roll | $300,500 |
| 2012 tax bill | $12,000,000 | $10,000,000 | $5,250,000 |
The above three parcels have had no significant construction or other actual increase in market value in many years. These parcels have just been improperly assessed for at least 5 years:
- The 835569 property was erroneously listed as taxable rather than exempt for the 2008 and 2009 tax bills, as indicated by * after its assessed value.
- This same property was erroneously listed with land use class 340 (Vacant land located in industrial areas) for these same years.
- Two of the three parcels were erroneously omitted from the assessment roll corresponding to the 2011 tax bill. One was erroneously omitted from the assessment roll for the 2010 tax bill.
- None of the assessed values for any of these three parcels for any of the 5 years is remotely correct. Even for the 2012 tax bill, the total assessed value is $27,250,000 — only a fraction of the true value of these three properties.
Why did exempt parcels decrease in value less than taxable parcels?
While taxable parcels fell in value 11.8 percent in two years, most exempt parcels fell only about 4 percent. As I understand Taber's explanation for this, many exempt properties are difficult to assess because they don't generally appear on the open market. People don't generally buy or sell municipal sewage treatment plants, college academic buildings, or hospital atriums. Changes in the market value of these properties are difficult to gauge because there really isn't a market for these properties. Taber also mentioned that “commercial” properties tend to decrease in value more slowly than residential properties.
It may also be that less attention is given to properly assessing exempt properties simply because the stakes are lower. For taxable parcels, property owners pay real money proportional to the assessment. Taxpayers want assurance that they are paying no more than necessary, while municipal governments receiving taxes want assurance that they are collecting the full amount of money from every taxable parcel. Therefore, tax assessors are under considerable pressure to make assessments of taxable properties that are neither too high nor too low. For exempt properties, these incentives are not present. Inaccurate — apparently even wildly inaccurate — assessments aren't so much noticed.
Summary
There isn't one simple answer as to why Fairview's exempt percent has increased in the last two years. According to my analysis, there are three contributors, in order of decreasing importance:
- Although Fairview's taxable market value fell by 11.8 percent, Fairview's exempt market value fell by only about 4 percent. The difference means that Fairview's exempt properties were valued $33 million higher than they would have been if they had tracked the taxable decline.
- Three municipal water and sewer parcels were grossly under-assessed. The assessor made a correction of $23 million.
- Marist College built student residences, increasing the value of one parcel by $18 million.
Pattern of Under-Assessment of Exempt Properties
The careful reader will have noticed two reasons why Fairview's exempt percent may not be as meaningful as one would like. The first is that gross under-assessment of high-value exempt properties is a bigger issue than previously assumed. Two years ago, I found that the St. Frances Hospital complex had been under-assessed by over $100 million. At the time, I assumed this blunder was a one-time event that would be unlikely to be repeated. Now there's a second instance: Municipal water and sewer parcels have been under-assessed by over $100 million. Most of this under-assessment will not be corrected until Fairview's 2013 tax bill. This pattern will continue: The recent construction of dormitories at Dutchess Community College — worth tens of millions of dollars — will not be reflected in Fairview's 2013 exempt percent. Taber told me she didn't have time to add the DCC dorms to the current assessment roll, the basis for Fairview's 2013 tax. The omission of such major contributors to exempt value results in underestimation of the true exempt percent.
Unequal Depreciation
The second reason why Fairview's exempt percent may not be so meaningful is that market forces apparently do not affect taxable and exempt properties equally. Nearly half (45 percent) of the increase in Fairview's exempt percent in the last two years is due to the fact that the average exempt property lost only one third as much value as the average taxable property did. At least, that's what the assessment rolls say. Do the assessment rolls accurately reflect exempt property values? There is some reason to wonder. If exempt properties have been overvalued in the last few years, Fairview's corresponding exempt percent is artificially high.
Pace Study's Analysis of Fairview Fire Tax Rate is Flawed
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Pace University's Michaelian Institute for Public Policy and Management released its 189 page Fairview Fire District Consolidation and Efficiency Study final report on June 12. This work, known locally as the Pace Study, examines the feasibility of Fairview consolidating with one or more neighboring fire districts. Pace Study Principal Investigator Michael Genito will present this work at a public meeting this evening, according to the Pace Study website.
In spite of the central importance of tax rates to fiscal analysis, the final report devotes only three sentences and one chart to Fairview's past and future tax rates. Unfortunately, these three sentences, which pertain to average yearly tax rate increase and projection to 2017, are incorrect. Also, the chart contains some incorrect data and an incorrect linear approximation. When I presented my analysis to Genito, he readily concurred that all these statements and the chart are flawed.
Flawed Final Report Passage
The flawed information, on page 175 of the final report PDF (labeled page 167), is as follows:
The above chart, copied from the final report, is confusingly labeled “Tax Rate per $1,000 Assessed Value”, but it is clear from context that this data is really tax rate per thousand dollars of market value, otherwise known as true value tax rate. This is the appropriate kind of tax rate for this analysis.
2008 Fairview Fire Tax Rate Is Incorrect
The key flaw is that the 2008 tax rate in the above chart is incorrect. Fairview's effective 2008 tax rate is $5.16, whereas the above chart shows it to be approximately $4.83. The final report's error in Fairview's 2008 tax rate leads to all the other errors in this passage, as will be explained below.
Genito's Blunder
How did Genito come to make this error? He apparently took an unwarranted shortcut. Instead of dividing Fairview's tax levy by Fairview's market value (the correct method, and the definition of true value tax rate), he took the Poughkeepsie portion of Fairview's tax levy and divided it by the Poughkeepsie portion of Fairview's market value. Under ordinary circumstances, such as between 2009 and 2012, Genito's method would give the same — or nearly the same — result as the correct method. Unfortunately, Fairview's circumstances in 2008 were far from ordinary.
Inequitable Apportionment
Long-time followers of my work know that for every year from 2001 to 2008, apportionment of Fairview's fire tax levy between Poughkeepsie and Hyde Park has been inequitable, resulting in different true value tax rates for the Poughkeepsie and Hyde Park segments, in violation of New York State Real Property Tax Law. In 2008, the Poughkeepsie segment had a true value tax rate of $4.83 — the number on Genito's chart — but the Hyde Park segment had a whopping true value tax rate of $5.96. All these facts were documented in detail four years ago here, and especially here.
Corrected Chart
In order to fairly graph tax rates, the Y-axis should ordinarily begin at zero dollars. Genito's chart begins the Y-axis at $2, presumably to better visualize small changes in tax rate. The following chart, using the corrected 2008 value, takes this decision further, beginning the Y-axis at $5. This way, small changes in tax rate can be seen even better.
Although the final report's chart includes a straight line approximation to the data and an extrapolation to 2017, such analyses are not appropriate to the corrected data. That's because the corrected data simply does not fit a straight line well enough to justify such an approximation. The corrected data cannot meaningfully be used to linearly extrapolate Fairview fire tax rate out even one year — let alone five years. Once again, Genito concurs with this judgement, which is supported by generally accepted criteria for goodness of fit to a straight line. What this means is that there is simply no basis to support the second and third sentences in the final report's passage, which project 2017 values.
Fairview's Tax Rate Has Been Trending Down Until 2012
We know that taxes are always going up, right? Well, not in Fairview. Examination of the corrected chart between 2008 and 2011 shows that Fairview's yearly tax rate change has been downward twice and upward only once. Even the single upward change from 2010 to 2011 leaves Fairview's tax rate lower than it was in 2008. A standard linear approximation to Fairview's 2008—2011 tax rate would show a decreasing tax rate, not an increasing one.
Fairview's Tax Rate Has Been Approximately Constant — Until 2012
Fairview's downward trend in the 2008—2011 time period is actually quite small. It would probably make more sense to approximate Fairview's tax rate during this time period as a constant value. With such an approximation, Fairview's 2008—2011 tax rate is $5.10 plus or minus 1.2 percent for every year in this interval. The 2011 tax rate is equal to this constant value to within 0.2 percent.
Fairview's 2012 Tax Rate Breaks the Pattern
This pattern of constant tax rate is broken in 2012, where the tax rate soars 12 percent from its historical value of $5.10. It is this break from the pattern that makes it infeasible to predict future tax rates. Another way to look at it is that there is no way one could have predicted Fairview's 2012 tax rate by extrapolation from the previous 4 years.
Average Yearly Tax Rate Increase Is Misleading
What about the first sentence in the final report's passage (average tax rate increase of 4.4 percent per year)? This statistic depends crucially on the 2008 value. With the corrected value, the average tax rate increase is only 2.6 percent per year, not 4.4 percent. Thus the passage's first sentence is incorrect.
Of course, even the corrected sentence is of dubious value. Averages can be deceiving. Why mention a formally correct “average increase” when the tax rate actually decreases as often as it increases. A man drowned in a river whose “average” depth was 6 inches. But he was in the 10-foot part. For the average yearly tax rate increase, essentially all of the tax rate increase during the 5-year period occurred in the last year.
Flawed Passage Is Best Removed
According to Genito, the report's inclusion of the above-quoted passage stemmed from a request by Fairview officials (the “Study Committee”) for a projection based on a 5-year history. Now that Genito has accepted my correction, he and I seem to agree that no future projection can be justified by the data. As I see it, the average tax rate increase is misleading as well, and is best omitted. The only part of the flawed passage that could be of positive value is the corrected chart. This chart is certainly useful for understanding Fairview's fiscal situation, but such an understanding appears to be outside the scope of this report.
In spite of the central importance of tax rates to fiscal analysis, the final report devotes only three sentences and one chart to Fairview's past and future tax rates. Unfortunately, these three sentences, which pertain to average yearly tax rate increase and projection to 2017, are incorrect. Also, the chart contains some incorrect data and an incorrect linear approximation. When I presented my analysis to Genito, he readily concurred that all these statements and the chart are flawed.
Flawed Final Report Passage
The flawed information, on page 175 of the final report PDF (labeled page 167), is as follows:
The Fairview Fire District tax rate has increased on average 4.4% each year from 2008 through 2012. A linear regression of the past five years going forward indicates that by 2017 the tax rate would approximate $6.50 per $1,000 taxable assessed valuation. As such, and all things being equal, the median home would expect to see their fire service property tax to rise from $1,321 per year to $1,502 in 2017.
The above chart, copied from the final report, is confusingly labeled “Tax Rate per $1,000 Assessed Value”, but it is clear from context that this data is really tax rate per thousand dollars of market value, otherwise known as true value tax rate. This is the appropriate kind of tax rate for this analysis.
2008 Fairview Fire Tax Rate Is Incorrect
The key flaw is that the 2008 tax rate in the above chart is incorrect. Fairview's effective 2008 tax rate is $5.16, whereas the above chart shows it to be approximately $4.83. The final report's error in Fairview's 2008 tax rate leads to all the other errors in this passage, as will be explained below.
Genito's Blunder
How did Genito come to make this error? He apparently took an unwarranted shortcut. Instead of dividing Fairview's tax levy by Fairview's market value (the correct method, and the definition of true value tax rate), he took the Poughkeepsie portion of Fairview's tax levy and divided it by the Poughkeepsie portion of Fairview's market value. Under ordinary circumstances, such as between 2009 and 2012, Genito's method would give the same — or nearly the same — result as the correct method. Unfortunately, Fairview's circumstances in 2008 were far from ordinary.
Inequitable Apportionment
Long-time followers of my work know that for every year from 2001 to 2008, apportionment of Fairview's fire tax levy between Poughkeepsie and Hyde Park has been inequitable, resulting in different true value tax rates for the Poughkeepsie and Hyde Park segments, in violation of New York State Real Property Tax Law. In 2008, the Poughkeepsie segment had a true value tax rate of $4.83 — the number on Genito's chart — but the Hyde Park segment had a whopping true value tax rate of $5.96. All these facts were documented in detail four years ago here, and especially here.
Corrected Chart
In order to fairly graph tax rates, the Y-axis should ordinarily begin at zero dollars. Genito's chart begins the Y-axis at $2, presumably to better visualize small changes in tax rate. The following chart, using the corrected 2008 value, takes this decision further, beginning the Y-axis at $5. This way, small changes in tax rate can be seen even better.
Although the final report's chart includes a straight line approximation to the data and an extrapolation to 2017, such analyses are not appropriate to the corrected data. That's because the corrected data simply does not fit a straight line well enough to justify such an approximation. The corrected data cannot meaningfully be used to linearly extrapolate Fairview fire tax rate out even one year — let alone five years. Once again, Genito concurs with this judgement, which is supported by generally accepted criteria for goodness of fit to a straight line. What this means is that there is simply no basis to support the second and third sentences in the final report's passage, which project 2017 values.
Fairview's Tax Rate Has Been Trending Down Until 2012
We know that taxes are always going up, right? Well, not in Fairview. Examination of the corrected chart between 2008 and 2011 shows that Fairview's yearly tax rate change has been downward twice and upward only once. Even the single upward change from 2010 to 2011 leaves Fairview's tax rate lower than it was in 2008. A standard linear approximation to Fairview's 2008—2011 tax rate would show a decreasing tax rate, not an increasing one.
Fairview's Tax Rate Has Been Approximately Constant — Until 2012
Fairview's downward trend in the 2008—2011 time period is actually quite small. It would probably make more sense to approximate Fairview's tax rate during this time period as a constant value. With such an approximation, Fairview's 2008—2011 tax rate is $5.10 plus or minus 1.2 percent for every year in this interval. The 2011 tax rate is equal to this constant value to within 0.2 percent.
Fairview's 2012 Tax Rate Breaks the Pattern
This pattern of constant tax rate is broken in 2012, where the tax rate soars 12 percent from its historical value of $5.10. It is this break from the pattern that makes it infeasible to predict future tax rates. Another way to look at it is that there is no way one could have predicted Fairview's 2012 tax rate by extrapolation from the previous 4 years.
Average Yearly Tax Rate Increase Is Misleading
What about the first sentence in the final report's passage (average tax rate increase of 4.4 percent per year)? This statistic depends crucially on the 2008 value. With the corrected value, the average tax rate increase is only 2.6 percent per year, not 4.4 percent. Thus the passage's first sentence is incorrect.
Of course, even the corrected sentence is of dubious value. Averages can be deceiving. Why mention a formally correct “average increase” when the tax rate actually decreases as often as it increases. A man drowned in a river whose “average” depth was 6 inches. But he was in the 10-foot part. For the average yearly tax rate increase, essentially all of the tax rate increase during the 5-year period occurred in the last year.
Flawed Passage Is Best Removed
According to Genito, the report's inclusion of the above-quoted passage stemmed from a request by Fairview officials (the “Study Committee”) for a projection based on a 5-year history. Now that Genito has accepted my correction, he and I seem to agree that no future projection can be justified by the data. As I see it, the average tax rate increase is misleading as well, and is best omitted. The only part of the flawed passage that could be of positive value is the corrected chart. This chart is certainly useful for understanding Fairview's fiscal situation, but such an understanding appears to be outside the scope of this report.
24 Haziran 2012 Pazar
Southbridge Town Council Pre-Election Charade
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Ken O’Brien
I will have a more extensive review of last night’s town council meeting after I’ve had a chance to watch it again.
In essence it was an encomium to how wonderful everything is under the current regime, with the chairman’s and town manager’s announcement amounting to a defense of all their shortcomings. Clearly rehearsed appearances during citizen’s forum reinforced the “don’t worry, be happy” theme with which the leadership sought to lead into the final week before the town election next Tuesday.
One element, however, deserves attention. This was the chairman’s defense of the prerogatives of the Bylaw Review Committee. She repeatedly compared it to the Charter Review Committee. She noted that no one had appeared before the Bylaw Review Committee to propose any amendment to the trash bylaw. She ridiculed a citizen for not knowing the name of the chairman of the committee. Never mind that, as I’ve pointed out before, the chair violated Robert’s Rules in the appointment of the chairman of the committee. Never mind that there are some real procedural issues as to how the adoption of the final report of the committee will be accomplished.
No, let’s look at the comparison of the Bylaw Review Committee to the Charter Review Committee. Given the infrequent updates to our town website, the record of the Charter Review Committee can still be found there under the heading Boards, Commissions and Committees. There you will find a clear statement of the scheduling of committee meetings. You will also find a link to a Public Comment Form. Under the same category you can’t even find a reference to the Bylaw Review Committee. Nor is there any reference to this committee on the News & Announcements page.
The chairman can attempt to draw all the comparisons she wants between the Charter Review Committee and the Bylaw Review Committee. The record clearly shows that, as regards openness and transparency, there is no comparison.
I will have a more extensive review of last night’s town council meeting after I’ve had a chance to watch it again.In essence it was an encomium to how wonderful everything is under the current regime, with the chairman’s and town manager’s announcement amounting to a defense of all their shortcomings. Clearly rehearsed appearances during citizen’s forum reinforced the “don’t worry, be happy” theme with which the leadership sought to lead into the final week before the town election next Tuesday.
One element, however, deserves attention. This was the chairman’s defense of the prerogatives of the Bylaw Review Committee. She repeatedly compared it to the Charter Review Committee. She noted that no one had appeared before the Bylaw Review Committee to propose any amendment to the trash bylaw. She ridiculed a citizen for not knowing the name of the chairman of the committee. Never mind that, as I’ve pointed out before, the chair violated Robert’s Rules in the appointment of the chairman of the committee. Never mind that there are some real procedural issues as to how the adoption of the final report of the committee will be accomplished.
No, let’s look at the comparison of the Bylaw Review Committee to the Charter Review Committee. Given the infrequent updates to our town website, the record of the Charter Review Committee can still be found there under the heading Boards, Commissions and Committees. There you will find a clear statement of the scheduling of committee meetings. You will also find a link to a Public Comment Form. Under the same category you can’t even find a reference to the Bylaw Review Committee. Nor is there any reference to this committee on the News & Announcements page.
The chairman can attempt to draw all the comparisons she wants between the Charter Review Committee and the Bylaw Review Committee. The record clearly shows that, as regards openness and transparency, there is no comparison.
Southbridge Pre-Election Recap: Through the Eyes of Photo-‘Toons
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Ken O’Brien
Just as The O’Zone is committed to attempting to provide you with news that you may not get elsewhere, so are we resolved to provide you a perspective on the past that has brought us to where we are now.
It is felt that there is no better vehicle to do this in a totally biased and irreverent way than to regurgitate the history of our Sunday segment Sunday Photo-‘Toons from the beginning.
So, hopefully to spur your interest, outrage, recollection and amusement in our annual exercise in democratic self-flagellation, here is a series of links to all the previous ‘Toons in reverse chronological order.
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-19.html
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-18.html
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-17.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-16.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-15.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-14.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-next-generation.html
http://ozonesouthbridge.blogspot.com/2012/04/more-sunday-photo-toons.html
http://ozonesouthbridge.blogspot.com/2012/04/sunday-photo-toons-southbridges-next.html
Just as The O’Zone is committed to attempting to provide you with news that you may not get elsewhere, so are we resolved to provide you a perspective on the past that has brought us to where we are now.It is felt that there is no better vehicle to do this in a totally biased and irreverent way than to regurgitate the history of our Sunday segment Sunday Photo-‘Toons from the beginning.
So, hopefully to spur your interest, outrage, recollection and amusement in our annual exercise in democratic self-flagellation, here is a series of links to all the previous ‘Toons in reverse chronological order.
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-19.html
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-18.html
http://ozonesouthbridge.blogspot.com/2012/06/sunday-photo-toons-17.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-16.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-15.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-14.html
http://ozonesouthbridge.blogspot.com/2012/05/sunday-photo-toons-next-generation.html
http://ozonesouthbridge.blogspot.com/2012/04/more-sunday-photo-toons.html
http://ozonesouthbridge.blogspot.com/2012/04/sunday-photo-toons-southbridges-next.html
Moriarty Responds to Southbridge News Article
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Shaun Moriarty
I am featured in a candidate profile in today's Southbridge Evening News; there are a couple of things worth clarifying or correcting.
The biggest one, in my eyes, has to do with spending money. I have often stated that I don't mind paying taxes so long as I feel that money is being spent appropriately and justly, and the article says as much. However, the article states that I feel "the town needs extra spending in some areas," and cites the DPW as a chief benefactor and that I feel a need for "specifically, a new firehouse."
I object to the term "extra" and would not, and have not, used such a term in describing any sort of needed spending. I did say I would rather pay more for a true fix than spending less for a temporary band-aid. If I have an old, beat-up car, should I keep patching it with work here and there or spend the extra money and replace it?
The DPW does have many aging vehicles and pieces of equipment, but I don't believe they need or deserve "extra spending". I oppose the purchase of two separate backhoes that passed this past Monday. Almost a quarter-million dollars was spent for two pieces of equipment that I do believe could and should be shared between DPW/Water/Sewer, especially considering the amount of time each are used. Quite simply, the usage and demand is not there, from what I know and from what officials reported, to justify the need for two brand new backhoes. That money could be better spent elsewhere. Spending $125,000 for a back-up backhoe is foolishness.
The biggest problem I have with the article, though buried in the story, was the suggestion that I am advocating for a new firehouse to be built. I am not.
During my interview with the News, I did make a comment about how we sometimes have to spend extra money to custom order fire engines or equipment that can fit through the old bay doors at the fire station. This is unfortunate, but alone does not justify the need for a new firehouse. We have just built the new school complex and Bay Path is now knocking at the door trying to get money for renovations and an expansion of their school. The economy is in shambles. The police chief recently came forward looking for money to help correct issues within the police station (structural, not the political or personnel issues). The DPW garage on Guelphwood Road became a money pit. I'm not pushing or suggesting that a new firehouse is needed. My assumption is that the reporter took a comment and assumed, misinterpreted or misheard the comment and parlayed it into some sort of push for a new firehouse.
As a former newspaper reporter myself, one area of concern is the number an frequency of partial quotes used in the story. My quick count showed 22 of 33 quotes were partial quotes. That is two-thirds of the quotes being partial quotes, many of which are then amended by paraphrasing from the author, some of which I agree with the summation and others that I do not. I know the job can be difficult at times, and the subjects of a piece often times may feel that a line or two was not portrayed in the newspaper article the way that they intended it to. I also know the diminishing resources Stonebridge Press affords its editorial staff, and I long for the days of a solid product with editors and reporters such as Joe Capillo (who, if anyone, I would aspire to be like), Mike Saucier and David Cutler (to name a few). Errors get through from time to time, and its unfortunate that, in my eyes, some misrepresentations have been printed so close to the election itself.
I am featured in a candidate profile in today's Southbridge Evening News; there are a couple of things worth clarifying or correcting.The biggest one, in my eyes, has to do with spending money. I have often stated that I don't mind paying taxes so long as I feel that money is being spent appropriately and justly, and the article says as much. However, the article states that I feel "the town needs extra spending in some areas," and cites the DPW as a chief benefactor and that I feel a need for "specifically, a new firehouse."
I object to the term "extra" and would not, and have not, used such a term in describing any sort of needed spending. I did say I would rather pay more for a true fix than spending less for a temporary band-aid. If I have an old, beat-up car, should I keep patching it with work here and there or spend the extra money and replace it?
The DPW does have many aging vehicles and pieces of equipment, but I don't believe they need or deserve "extra spending". I oppose the purchase of two separate backhoes that passed this past Monday. Almost a quarter-million dollars was spent for two pieces of equipment that I do believe could and should be shared between DPW/Water/Sewer, especially considering the amount of time each are used. Quite simply, the usage and demand is not there, from what I know and from what officials reported, to justify the need for two brand new backhoes. That money could be better spent elsewhere. Spending $125,000 for a back-up backhoe is foolishness.
The biggest problem I have with the article, though buried in the story, was the suggestion that I am advocating for a new firehouse to be built. I am not.
During my interview with the News, I did make a comment about how we sometimes have to spend extra money to custom order fire engines or equipment that can fit through the old bay doors at the fire station. This is unfortunate, but alone does not justify the need for a new firehouse. We have just built the new school complex and Bay Path is now knocking at the door trying to get money for renovations and an expansion of their school. The economy is in shambles. The police chief recently came forward looking for money to help correct issues within the police station (structural, not the political or personnel issues). The DPW garage on Guelphwood Road became a money pit. I'm not pushing or suggesting that a new firehouse is needed. My assumption is that the reporter took a comment and assumed, misinterpreted or misheard the comment and parlayed it into some sort of push for a new firehouse.
As a former newspaper reporter myself, one area of concern is the number an frequency of partial quotes used in the story. My quick count showed 22 of 33 quotes were partial quotes. That is two-thirds of the quotes being partial quotes, many of which are then amended by paraphrasing from the author, some of which I agree with the summation and others that I do not. I know the job can be difficult at times, and the subjects of a piece often times may feel that a line or two was not portrayed in the newspaper article the way that they intended it to. I also know the diminishing resources Stonebridge Press affords its editorial staff, and I long for the days of a solid product with editors and reporters such as Joe Capillo (who, if anyone, I would aspire to be like), Mike Saucier and David Cutler (to name a few). Errors get through from time to time, and its unfortunate that, in my eyes, some misrepresentations have been printed so close to the election itself.
Operation “Fast and Furious” Started Under Bush as Operation “Wide Receiver”
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Ken O’Brien
Almost two years into his relentless effort to uncover dirt on the Obama Administration, Congressman Darrel Issa, the richest member of Congress, and chairman of the House Oversight Committee, has apparently struck pay dirt on the issue of the “Fast and Furious” program executed by the Department of Justice.
As a function of this investigation, the committee has issued a contempt of Congress citation against Attorney General Eric Holder. This order will be brought up in the U. S. House of Representatives. If voted, it would be the first time in American history that a contempt of Congress citation has been issued against an Attorney General.
What has been almost totally missing from this “Furious Furor” is the fact that the program being investigated was initiated by the Bush Administration under then Attorney General Michael Mukasey.
At that time it was called Operation Wide Receiver.
However, despite numerous requests from Democratic members of the Oversight Committee, chairman Issa refused to explore the earlier creation of the program under George W. Bush’s Attorney General Mukasey.
Is it a witch hunt? Read the earlier referenced links and decide.
 |
| Congressman Darrel Issa |
As a function of this investigation, the committee has issued a contempt of Congress citation against Attorney General Eric Holder. This order will be brought up in the U. S. House of Representatives. If voted, it would be the first time in American history that a contempt of Congress citation has been issued against an Attorney General.
What has been almost totally missing from this “Furious Furor” is the fact that the program being investigated was initiated by the Bush Administration under then Attorney General Michael Mukasey.
At that time it was called Operation Wide Receiver.
However, despite numerous requests from Democratic members of the Oversight Committee, chairman Issa refused to explore the earlier creation of the program under George W. Bush’s Attorney General Mukasey.
Is it a witch hunt? Read the earlier referenced links and decide.
Breaking News: Southbridge Summer Jobs Go To Favored Few
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Ken O’Brien
Earlier today The O’Zone received the following comment from a reader who identified themselves as “Job Opportunity Lost”:
“A notice for Ozone readers: The school department is hiring people to move teacher classrooms to prepare for the 2012 - 2013 school year. Rate is $16 per hour. Must be able to lift boxes. Possible job for many in our community who are currently unemployed. Interested? Too bad. Jobs were given to school committee members' children. Same school committtee members who voted the positions and the rate.”
This story has now been verified by multiple sources with minor modifications. The rate is in the range of $15 to $16 per hour and the people chosen were not merely the children of school committee members but of school department administrators and staff as well. One local employer, well-known for hiring local youth, was left high and dry by the mass exodus.
The O'Zone has not been able to find any indication that these positions were advertised to the public.
Earlier today The O’Zone received the following comment from a reader who identified themselves as “Job Opportunity Lost”:“A notice for Ozone readers: The school department is hiring people to move teacher classrooms to prepare for the 2012 - 2013 school year. Rate is $16 per hour. Must be able to lift boxes. Possible job for many in our community who are currently unemployed. Interested? Too bad. Jobs were given to school committee members' children. Same school committtee members who voted the positions and the rate.”
This story has now been verified by multiple sources with minor modifications. The rate is in the range of $15 to $16 per hour and the people chosen were not merely the children of school committee members but of school department administrators and staff as well. One local employer, well-known for hiring local youth, was left high and dry by the mass exodus.
The O'Zone has not been able to find any indication that these positions were advertised to the public.
23 Haziran 2012 Cumartesi
Joel Miller's Flawed Legislation for Fire District Budget Empowerment
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New York State Assemblyman Joel Miller has introduced legislation to provide for public vote on fire district budgets in the November general election. Under current New York State law, fire district budgets are controlled by the district's board of fire commissioners. Miller's legislation A9762A, called the Fire District Budget Empowerment Act, shifts the approval of fire district budgets from the fire commissioners to the general public. Miller announced his popular vote initiative in an April 22, 2012, Valley Views article in the Poughkeepsie Journal.
Popular Vote on Budget Is Inconsistent With Other Local Governments
As I see it, popular vote on fire district budgets is a risky departure from most governance in this country. There is no public vote on the federal budget, there is no public vote on the New York State budget, there is no public vote on the Dutchess County budget, or on city or village budgets. Instead, the general public votes for representatives (government officials such as legislators, councilmen, etc.) who in turn decide on agency budgets. This is the principle of representative democracy, one of the foundations of this country. In the case of fire districts, the people vote for fire commissioners, who in turn control the budget.
Direct Democracy Is Seldom Used But Often Problematic
Miller's initiative is an example of direct democracy, in which policy decisions are made by popular vote, bypassing or overriding government officials. Direct democracy for economic decisions is used only sparingly in the United States. In California, many major economic decisions beginning with the infamous Proposition 13 have been made by popular vote, with disastrous results.
The founding fathers were very much opposed to direct democracy (also called “pure democracy”), according to Wikipedia. John Witherspoon, a signer of the Declaration of Independence, said, “Pure democracy cannot subsist long nor be carried far into the departments of state – it is very subject to caprice and the madness of popular rage.” The American colonists favored representative democracy — not direct democracy. That's why they said “No taxation without representation.” They didn't say “No taxation without popular vote.”
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government taxing authority in New York State, along with Towns, cities, villages, and counties. I know of no reason why fire districts should be governed differently than any of these other taxing authorities. In my view, fire districts should continue to use the same budget approval process as most other local taxing authorities.
Incorrect and Misleading Statements in Valley View Article
Miller's Valley View article contains misleading statements, and at least one statement that is just plain wrong. In the context of the Fairview Fire District's high fire tax rate, Miller writes:
Miller misleadingly writes, “This legislation will permit public participation in fire district budgets ...,” as if public participation in the fire district budget process doesn't already exist. But New York State law already requires a fire district to publicize its tentative budget and to hold a public hearing on the budget, during which public input is received. In this way again, state law provides for public participation in the fire district budget process just as it does in most other kinds of local government, including counties, cities, villages, and schools.
This Is My Opinion
Most of my previous posts have been nonpartisan, focusing on objective facts. This post (except for the last section) is clearly my own opinion. Therefore, it's marked with an “Opinion” label. As always, I welcome your reasoned comments.
Popular Vote on Budget Is Inconsistent With Other Local Governments
As I see it, popular vote on fire district budgets is a risky departure from most governance in this country. There is no public vote on the federal budget, there is no public vote on the New York State budget, there is no public vote on the Dutchess County budget, or on city or village budgets. Instead, the general public votes for representatives (government officials such as legislators, councilmen, etc.) who in turn decide on agency budgets. This is the principle of representative democracy, one of the foundations of this country. In the case of fire districts, the people vote for fire commissioners, who in turn control the budget.
Direct Democracy Is Seldom Used But Often Problematic
Miller's initiative is an example of direct democracy, in which policy decisions are made by popular vote, bypassing or overriding government officials. Direct democracy for economic decisions is used only sparingly in the United States. In California, many major economic decisions beginning with the infamous Proposition 13 have been made by popular vote, with disastrous results.
The founding fathers were very much opposed to direct democracy (also called “pure democracy”), according to Wikipedia. John Witherspoon, a signer of the Declaration of Independence, said, “Pure democracy cannot subsist long nor be carried far into the departments of state – it is very subject to caprice and the madness of popular rage.” The American colonists favored representative democracy — not direct democracy. That's why they said “No taxation without representation.” They didn't say “No taxation without popular vote.”
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government taxing authority in New York State, along with Towns, cities, villages, and counties. I know of no reason why fire districts should be governed differently than any of these other taxing authorities. In my view, fire districts should continue to use the same budget approval process as most other local taxing authorities.
Incorrect and Misleading Statements in Valley View Article
Miller's Valley View article contains misleading statements, and at least one statement that is just plain wrong. In the context of the Fairview Fire District's high fire tax rate, Miller writes:
Fairview alone had fire district tax rates nearly 10 times higher than 27 other towns in Dutchess County in 2010.This statement is absurd, since there are only 20 towns in Dutchess County. Well, perhaps Miller meant “fire districts” instead of “towns”, since there are about 31 fire districts in Dutchess County. I checked with Miller's office, and was assured that yes, that's what he meant. Well, wrong again! My tax rate analysis from 2009 shows (page 14) that Fairview's tax rate was 10 times higher than 13 other fire districts — not 27 other fire districts. Miller's research staffer has conceded that the Valley Views statement — even after changing “towns” to fire districts” — is incorrect.
Miller misleadingly writes, “This legislation will permit public participation in fire district budgets ...,” as if public participation in the fire district budget process doesn't already exist. But New York State law already requires a fire district to publicize its tentative budget and to hold a public hearing on the budget, during which public input is received. In this way again, state law provides for public participation in the fire district budget process just as it does in most other kinds of local government, including counties, cities, villages, and schools.
This Is My Opinion
Most of my previous posts have been nonpartisan, focusing on objective facts. This post (except for the last section) is clearly my own opinion. Therefore, it's marked with an “Opinion” label. As always, I welcome your reasoned comments.
Joel Miller Combats Incestuously Elected Fire Commissioners
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New York State Assemblyman Joel Miller has introduced legislation to provide for election of fire commissioners in the November general election. Under current New York State law, election of fire commissioners is held on the second Tuesday of December from 6:00 P.M. to 9:00 P.M., often at a different polling place than for the November general election. According to my recent conversation with Miller, he had intended to mention this initiative, called the Fire District Community Participation Act, in his April 22, 2012, Valley Views article in the Poughkeepsie Journal, but it was somehow omitted.
I heartily support Miller's initiative.
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government in New York State, along with towns, cities, villages, and counties. I know of no reason why fire districts should live by different rules than any of these other local governments. In my recent post Joel Miller's Flawed Legislation for Fire District Budget Empowerment, I used this reasoning to oppose Miller's initiative for popular vote on fire district budgets. Here, the same reasoning argues in favor of Miller's initiative to make the fire commissioner election process the same as that in other local governments. My view in both cases upholds the basic principle that fire districts should live by the same rules as other local governments.
Current law for fire district elections distorts the voice of the people
Although fire commissioners — the representatives in our representative democracy — are nominally elected by popular vote, New York State law provides that this vote must take place on a different day from the general election, usually at greatly restricted hours, and often at a different polling place from the general election. The practical result is that most voters who bother to vote in fire district elections are those with a substantial personal stake in the outcome — firefighters, fire district officials, and their families. Miller, in the Valley View article, describes the resulting distortion of the people's voice in his usual restrained way as “incestuously elected commissioners.”
How low is voter turnout in fire district elections?
Voter turnout in fire district elections can be put into perspective by comparing it with that in the general election. An article in the New York Times of November 16, 2010, asserts that New York ranked dead last among all 50 states in voter turnout in that year's general election. How low was dead last? Only 32.1 percent of registered voters voted. But that was in the general election. In the Arlington Fire District's election of December 13, 2011, voter turnout was 0.44 percent, according to data in Miller's Valley View article. So in the general election, one out of three registered voters actually voted, but in the Arlington Fire District's election, it was one out of 230. Such a minuscule voter turnout is probably typical for fire district elections in New York State. It is clear that representative democracy is not working effectively for fire districts in New York State.
Abolish taxation with slanted representation
In decades past, fire districts were mostly volunteer, and their tax rates were correspondingly low. It could be argued that fire district “taxation with slanted representation” didn't matter too much in the past, because little money was at stake. Those days are long past. In many districts, volunteerism has dropped off dramatically, and been replaced by career firefighters. Like paid employees in any other field, career firefighters are expensive. Fire tax rates have soared. In some fire districts in Dutchess County, fire taxes are the second largest item of property tax, bested only by school taxes. There is no place in today's world for fire district taxation with slanted representation. Fire district taxation should have the same standard of representation as other local governments do. This means that fire commissioner elections should be part of the general election, as Miller proposes.
As always, I welcome your reasoned comments to this opinion piece.
I heartily support Miller's initiative.
Why should fire districts be any different from other local governments?
Fire districts are just one more kind of local government in New York State, along with towns, cities, villages, and counties. I know of no reason why fire districts should live by different rules than any of these other local governments. In my recent post Joel Miller's Flawed Legislation for Fire District Budget Empowerment, I used this reasoning to oppose Miller's initiative for popular vote on fire district budgets. Here, the same reasoning argues in favor of Miller's initiative to make the fire commissioner election process the same as that in other local governments. My view in both cases upholds the basic principle that fire districts should live by the same rules as other local governments.
Current law for fire district elections distorts the voice of the people
Although fire commissioners — the representatives in our representative democracy — are nominally elected by popular vote, New York State law provides that this vote must take place on a different day from the general election, usually at greatly restricted hours, and often at a different polling place from the general election. The practical result is that most voters who bother to vote in fire district elections are those with a substantial personal stake in the outcome — firefighters, fire district officials, and their families. Miller, in the Valley View article, describes the resulting distortion of the people's voice in his usual restrained way as “incestuously elected commissioners.”
How low is voter turnout in fire district elections?
Voter turnout in fire district elections can be put into perspective by comparing it with that in the general election. An article in the New York Times of November 16, 2010, asserts that New York ranked dead last among all 50 states in voter turnout in that year's general election. How low was dead last? Only 32.1 percent of registered voters voted. But that was in the general election. In the Arlington Fire District's election of December 13, 2011, voter turnout was 0.44 percent, according to data in Miller's Valley View article. So in the general election, one out of three registered voters actually voted, but in the Arlington Fire District's election, it was one out of 230. Such a minuscule voter turnout is probably typical for fire district elections in New York State. It is clear that representative democracy is not working effectively for fire districts in New York State.
Abolish taxation with slanted representation
In decades past, fire districts were mostly volunteer, and their tax rates were correspondingly low. It could be argued that fire district “taxation with slanted representation” didn't matter too much in the past, because little money was at stake. Those days are long past. In many districts, volunteerism has dropped off dramatically, and been replaced by career firefighters. Like paid employees in any other field, career firefighters are expensive. Fire tax rates have soared. In some fire districts in Dutchess County, fire taxes are the second largest item of property tax, bested only by school taxes. There is no place in today's world for fire district taxation with slanted representation. Fire district taxation should have the same standard of representation as other local governments do. This means that fire commissioner elections should be part of the general election, as Miller proposes.
As always, I welcome your reasoned comments to this opinion piece.
Joel Miller Just Can't Get Fairview Facts Straight
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“Everyone is entitled to his own opinion, but not his own facts.” Daniel Patrick Moynihan
Try as he might, New York State Assemblyman Joel Miller just can't get his facts right regarding the Fairview Fire District. On his first try, in a Poughkeepsie Journal Valley Views article on April 22, 2012, he wrote
Flawed Staff Work
In preparation for that blog post, I spoke with the staffer for Miller who had generated this misstatement. This staffer had already reviewed some of my own reports, including The Big Three Fire Districts of Dutchess County. It became clear to me that this staffer was not well prepared to interpret quantitative information, and the staffer readily conceded as much. My instinct was that if Miller were to release a corrected statement, it might also be wrong. Because I genuinely wanted facts to be correctly stated, I suggested a corrected statement, and I offered to preview any proposed new statement about Fairview. I never heard from Miller or any of his staffers about this matter.
My instinct turned out to be correct. On April 26, Miller sent a press release to each Fairview Fire Commissioner. This press release was essentially a rewording of his Valley Views article, except that the incorrect statement about Fairview was replaced by a new incorrect statement about Fairview:
And so it is in this case. Half the non-big-three fire districts had tax rates greater than the average of the non-big-three, and half had tax rates less than the average. So Fairview's tax rate was eight times higher than only 14 other fire districts — not 30 other fire districts.
Incidentally, “30 other fire districts” in Miller's statement is wrong too. There were only 30 fire districts in the whole analysis, and the big three fire districts were excluded from this average, so there could only be 27 non-big-three districts. The (weighted) average of these 27 was greater than 14 of these districts, and smaller than 13 of these districts, as one would expect. For five of these districts, Fairview was only about four times higher — not 8 times higher as Miller claimed.
Miller Has Been Ambivalent About Accuracy
This post isn't about flawed staff work. The principal is responsible for the work of his staff. If Miller had any doubt whether his staff could handle the fire tax rate issue, the doubt was resolved the first time the mistake was made. At that point, Miller knew — or should have known — that his staff didn't know what they were doing on this issue, and so were unlikely to make a proper correction on their own. Miller could have arranged for an independent review of his proposed “correction” before it was released. (I would have been glad to accommodate.)
But this post isn't just about fire taxes either. Joel Miller represents 6 of Dutchess County's 20 towns in the New York State Assembly. Yet he allowed himself to write “27 other towns in Dutchess County,” a gaffe that he or any member of his staff could easily have corrected without knowing anything about fire tax rates.
Taken together, these mistakes show Miller to have been ambivalent about the accuracy of his factual statements. Such lapses affect his credibility.
Try as he might, New York State Assemblyman Joel Miller just can't get his facts right regarding the Fairview Fire District. On his first try, in a Poughkeepsie Journal Valley Views article on April 22, 2012, he wrote
Fairview alone had fire district tax rates nearly 10 times higher than 27 other towns in Dutchess County in 2010.I pointed out in Joel Miller's Flawed Legislation for Fire District Budget Empowerment that there are only 20 towns in Dutchess County, and that even if he meant “fire districts” instead of “towns” (which would have made more sense), his statement is still not even close to correct.
Flawed Staff Work
In preparation for that blog post, I spoke with the staffer for Miller who had generated this misstatement. This staffer had already reviewed some of my own reports, including The Big Three Fire Districts of Dutchess County. It became clear to me that this staffer was not well prepared to interpret quantitative information, and the staffer readily conceded as much. My instinct was that if Miller were to release a corrected statement, it might also be wrong. Because I genuinely wanted facts to be correctly stated, I suggested a corrected statement, and I offered to preview any proposed new statement about Fairview. I never heard from Miller or any of his staffers about this matter.
My instinct turned out to be correct. On April 26, Miller sent a press release to each Fairview Fire Commissioner. This press release was essentially a rewording of his Valley Views article, except that the incorrect statement about Fairview was replaced by a new incorrect statement about Fairview:
Fairview alone had fire district tax rates nearly eight times higher than 30 other fire districts in Dutchess County in 2010.The irony is that the above statement appears to be a mis-quote of a statement in my own report, which reads
Fairview’s tax rate is nearly eight times the average of the non-big-three districts.Apparently the staffer thought the word “average” in my statement didn't really mean anything important, and could just be omitted! But as most European high school students know, an average of a bunch of numbers must be smaller than some of the numbers being averaged. In fact, for ordinary data like tax rates, roughly half the numbers can be expected to be greater than the average. Maybe even much greater.
And so it is in this case. Half the non-big-three fire districts had tax rates greater than the average of the non-big-three, and half had tax rates less than the average. So Fairview's tax rate was eight times higher than only 14 other fire districts — not 30 other fire districts.
Incidentally, “30 other fire districts” in Miller's statement is wrong too. There were only 30 fire districts in the whole analysis, and the big three fire districts were excluded from this average, so there could only be 27 non-big-three districts. The (weighted) average of these 27 was greater than 14 of these districts, and smaller than 13 of these districts, as one would expect. For five of these districts, Fairview was only about four times higher — not 8 times higher as Miller claimed.
Miller Has Been Ambivalent About Accuracy
This post isn't about flawed staff work. The principal is responsible for the work of his staff. If Miller had any doubt whether his staff could handle the fire tax rate issue, the doubt was resolved the first time the mistake was made. At that point, Miller knew — or should have known — that his staff didn't know what they were doing on this issue, and so were unlikely to make a proper correction on their own. Miller could have arranged for an independent review of his proposed “correction” before it was released. (I would have been glad to accommodate.)
But this post isn't just about fire taxes either. Joel Miller represents 6 of Dutchess County's 20 towns in the New York State Assembly. Yet he allowed himself to write “27 other towns in Dutchess County,” a gaffe that he or any member of his staff could easily have corrected without knowing anything about fire tax rates.
Taken together, these mistakes show Miller to have been ambivalent about the accuracy of his factual statements. Such lapses affect his credibility.
Why Has Fairview's Exempt Percent Increased?
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The Fairview Fire District has the highest fire tax rate in Dutchess County, and possibly the highest fire tax rate in New York State. One of the reasons for Fairview's high tax rate is that roughly half of Fairview's market value is exempt from paying fire taxes, but the exempt half still accounts for half the fire and emergency service calls to the Fairview Fire District. Fairview's taxable property owners pay not only their own share of fire tax, but also pay for service to the exempt properties. Fairview residents and property owners have had a longstanding interest in knowing exactly what percent of Fairview is exempt, and how Fairview's exempt percent may be changing over time. Unfortunately, there has been a history of misstatement of Fairview's exempt percent, which I have attempted to correct. See Fairview Fire District's Exempt Percent Is Misstated — Again.
Fairview's Exempt Percent
The following table shows a 5-year history of Fairview's exempt percent, according to my calculations:
Exempt Value has Increased While Taxable Value Decreased
Property values have been falling every year in Dutchess County since the 2008 economic meltdown. Fairview's taxable market value fell 11.8 percent between the 2010 and 2012 tax bills. If Fairview's exempt market value had also fallen 11.8 percent during this period, Fairview's exempt percent would have stayed the same as 2010, at 47.9 percent. But Fairview's exempt market value did not fall 11.8 percent — it actually increased by 2.5 percent! In terms of dollars, Fairview's exempt market value for the 2012 tax bill was about $74 million greater than it would have been if Fairview's exempt percent had remained constant. This $74 million caused Fairview's exempt percent to increase from 47.9 to 51.7 in two years. The $74 million arises from two sources:
One might assume that the dramatic increases in four parcels simply reflect major construction projects on these parcels. Surprisingly, this assumption is true only for one of the four parcels. Marist College's parcel at 30 Fulton Street (Parcel number 134689-6162-05-035776-0000) increased in value from $240,000 in 2010 to $17,760,000 in 2012 because student residence halls were constructed on that property between those years.
The other three parcels, detailed in the following table, are part of the water and sewer systems for the City and Town of Poughkeepsie:
The above three parcels have had no significant construction or other actual increase in market value in many years. These parcels have just been improperly assessed for at least 5 years:
Why did exempt parcels decrease in value less than taxable parcels?
While taxable parcels fell in value 11.8 percent in two years, most exempt parcels fell only about 4 percent. As I understand Taber's explanation for this, many exempt properties are difficult to assess because they don't generally appear on the open market. People don't generally buy or sell municipal sewage treatment plants, college academic buildings, or hospital atriums. Changes in the market value of these properties are difficult to gauge because there really isn't a market for these properties. Taber also mentioned that “commercial” properties tend to decrease in value more slowly than residential properties.
It may also be that less attention is given to properly assessing exempt properties simply because the stakes are lower. For taxable parcels, property owners pay real money proportional to the assessment. Taxpayers want assurance that they are paying no more than necessary, while municipal governments receiving taxes want assurance that they are collecting the full amount of money from every taxable parcel. Therefore, tax assessors are under considerable pressure to make assessments of taxable properties that are neither too high nor too low. For exempt properties, these incentives are not present. Inaccurate — apparently even wildly inaccurate — assessments aren't so much noticed.
Summary
There isn't one simple answer as to why Fairview's exempt percent has increased in the last two years. According to my analysis, there are three contributors, in order of decreasing importance:
Pattern of Under-Assessment of Exempt Properties
The careful reader will have noticed two reasons why Fairview's exempt percent may not be as meaningful as one would like. The first is that gross under-assessment of high-value exempt properties is a bigger issue than previously assumed. Two years ago, I found that the St. Frances Hospital complex had been under-assessed by over $100 million. At the time, I assumed this blunder was a one-time event that would be unlikely to be repeated. Now there's a second instance: Municipal water and sewer parcels have been under-assessed by over $100 million. Most of this under-assessment will not be corrected until Fairview's 2013 tax bill. This pattern will continue: The recent construction of dormitories at Dutchess Community College — worth tens of millions of dollars — will not be reflected in Fairview's 2013 exempt percent. Taber told me she didn't have time to add the DCC dorms to the current assessment roll, the basis for Fairview's 2013 tax. The omission of such major contributors to exempt value results in underestimation of the true exempt percent.
Unequal Depreciation
The second reason why Fairview's exempt percent may not be so meaningful is that market forces apparently do not affect taxable and exempt properties equally. Nearly half (45 percent) of the increase in Fairview's exempt percent in the last two years is due to the fact that the average exempt property lost only one third as much value as the average taxable property did. At least, that's what the assessment rolls say. Do the assessment rolls accurately reflect exempt property values? There is some reason to wonder. If exempt properties have been overvalued in the last few years, Fairview's corresponding exempt percent is artificially high.
Fairview's Exempt Percent
The following table shows a 5-year history of Fairview's exempt percent, according to my calculations:
| Year of Tax Bill | Exempt Percent |
|---|---|
| 2008 | 47.9* |
| 2009 | 47.5 |
| 2010 | 47.9 |
| 2011 | 50.8 |
| 2012 | 51.7 |
* Listed exempt percent for 2008 is after correcting for a blunder by the Town of Poughkeepsie Assessor's Office.Note that the 2008 “land” tax bill (including the fire, town, county, and other taxes) corresponds to the 2007 assessment roll, and so forth. This table shows that for the years 2008 — 2010, Fairview's exempt percent has been 47.7 plus or minus 0.2 percent. However, beginning in 2011, Fairview's exempt percent has noticeably increased, standing at 51.7 percent for 2012 tax bills. What accounts for this 4 percent increase in Fairview's exempt percent over two years? This post will examine this question.
Exempt Value has Increased While Taxable Value Decreased
Property values have been falling every year in Dutchess County since the 2008 economic meltdown. Fairview's taxable market value fell 11.8 percent between the 2010 and 2012 tax bills. If Fairview's exempt market value had also fallen 11.8 percent during this period, Fairview's exempt percent would have stayed the same as 2010, at 47.9 percent. But Fairview's exempt market value did not fall 11.8 percent — it actually increased by 2.5 percent! In terms of dollars, Fairview's exempt market value for the 2012 tax bill was about $74 million greater than it would have been if Fairview's exempt percent had remained constant. This $74 million caused Fairview's exempt percent to increase from 47.9 to 51.7 in two years. The $74 million arises from two sources:
- Four exempt parcels saw dramatic increases in assessed value, for a total of about $41 million.
- Fairview's other exempt parcels fell in value by only about 4 percent on average, rather than by the 11.8 percent decrease for taxable parcels. These exempt parcels are assessed at approximately $33 million more than they would have been if they'd depreciated in proportion to taxable parcels.
One might assume that the dramatic increases in four parcels simply reflect major construction projects on these parcels. Surprisingly, this assumption is true only for one of the four parcels. Marist College's parcel at 30 Fulton Street (Parcel number 134689-6162-05-035776-0000) increased in value from $240,000 in 2010 to $17,760,000 in 2012 because student residence halls were constructed on that property between those years.
The other three parcels, detailed in the following table, are part of the water and sewer systems for the City and Town of Poughkeepsie:
| Parcel number 134689-6062-02 -xxxxxx-0000 | 827844 | 835560 | 818562 |
|---|---|---|---|
| Address | 3431 North Rd | Kittredge Pl | 173 Kittredge Pl |
| Land use class | 822 (water supply) | 853 (Sewage) | 853 (Sewage) |
| Owner | City of Poughkeepsie and Town | City of Poughkeepsie | Town of Poughkeepsie |
| 2008 tax bill | $4,274,000 | $111,400* | $159,300 |
| 2009 tax bill | $4,274,000 | $235,000* | $316,000 |
| 2010 tax bill | $4,274,000 | Not in roll | $316,000 |
| 2011 tax bill | Not in roll | Not in roll | $300,500 |
| 2012 tax bill | $12,000,000 | $10,000,000 | $5,250,000 |
The above three parcels have had no significant construction or other actual increase in market value in many years. These parcels have just been improperly assessed for at least 5 years:
- The 835569 property was erroneously listed as taxable rather than exempt for the 2008 and 2009 tax bills, as indicated by * after its assessed value.
- This same property was erroneously listed with land use class 340 (Vacant land located in industrial areas) for these same years.
- Two of the three parcels were erroneously omitted from the assessment roll corresponding to the 2011 tax bill. One was erroneously omitted from the assessment roll for the 2010 tax bill.
- None of the assessed values for any of these three parcels for any of the 5 years is remotely correct. Even for the 2012 tax bill, the total assessed value is $27,250,000 — only a fraction of the true value of these three properties.
Why did exempt parcels decrease in value less than taxable parcels?
While taxable parcels fell in value 11.8 percent in two years, most exempt parcels fell only about 4 percent. As I understand Taber's explanation for this, many exempt properties are difficult to assess because they don't generally appear on the open market. People don't generally buy or sell municipal sewage treatment plants, college academic buildings, or hospital atriums. Changes in the market value of these properties are difficult to gauge because there really isn't a market for these properties. Taber also mentioned that “commercial” properties tend to decrease in value more slowly than residential properties.
It may also be that less attention is given to properly assessing exempt properties simply because the stakes are lower. For taxable parcels, property owners pay real money proportional to the assessment. Taxpayers want assurance that they are paying no more than necessary, while municipal governments receiving taxes want assurance that they are collecting the full amount of money from every taxable parcel. Therefore, tax assessors are under considerable pressure to make assessments of taxable properties that are neither too high nor too low. For exempt properties, these incentives are not present. Inaccurate — apparently even wildly inaccurate — assessments aren't so much noticed.
Summary
There isn't one simple answer as to why Fairview's exempt percent has increased in the last two years. According to my analysis, there are three contributors, in order of decreasing importance:
- Although Fairview's taxable market value fell by 11.8 percent, Fairview's exempt market value fell by only about 4 percent. The difference means that Fairview's exempt properties were valued $33 million higher than they would have been if they had tracked the taxable decline.
- Three municipal water and sewer parcels were grossly under-assessed. The assessor made a correction of $23 million.
- Marist College built student residences, increasing the value of one parcel by $18 million.
Pattern of Under-Assessment of Exempt Properties
The careful reader will have noticed two reasons why Fairview's exempt percent may not be as meaningful as one would like. The first is that gross under-assessment of high-value exempt properties is a bigger issue than previously assumed. Two years ago, I found that the St. Frances Hospital complex had been under-assessed by over $100 million. At the time, I assumed this blunder was a one-time event that would be unlikely to be repeated. Now there's a second instance: Municipal water and sewer parcels have been under-assessed by over $100 million. Most of this under-assessment will not be corrected until Fairview's 2013 tax bill. This pattern will continue: The recent construction of dormitories at Dutchess Community College — worth tens of millions of dollars — will not be reflected in Fairview's 2013 exempt percent. Taber told me she didn't have time to add the DCC dorms to the current assessment roll, the basis for Fairview's 2013 tax. The omission of such major contributors to exempt value results in underestimation of the true exempt percent.
Unequal Depreciation
The second reason why Fairview's exempt percent may not be so meaningful is that market forces apparently do not affect taxable and exempt properties equally. Nearly half (45 percent) of the increase in Fairview's exempt percent in the last two years is due to the fact that the average exempt property lost only one third as much value as the average taxable property did. At least, that's what the assessment rolls say. Do the assessment rolls accurately reflect exempt property values? There is some reason to wonder. If exempt properties have been overvalued in the last few years, Fairview's corresponding exempt percent is artificially high.
Pace Study's Analysis of Fairview Fire Tax Rate is Flawed
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Pace University's Michaelian Institute for Public Policy and Management released its 189 page Fairview Fire District Consolidation and Efficiency Study final report on June 12. This work, known locally as the Pace Study, examines the feasibility of Fairview consolidating with one or more neighboring fire districts. Pace Study Principal Investigator Michael Genito will present this work at a public meeting this evening, according to the Pace Study website.
In spite of the central importance of tax rates to fiscal analysis, the final report devotes only three sentences and one chart to Fairview's past and future tax rates. Unfortunately, these three sentences, which pertain to average yearly tax rate increase and projection to 2017, are incorrect. Also, the chart contains some incorrect data and an incorrect linear approximation. When I presented my analysis to Genito, he readily concurred that all these statements and the chart are flawed.
Flawed Final Report Passage
The flawed information, on page 175 of the final report PDF (labeled page 167), is as follows:
The above chart, copied from the final report, is confusingly labeled “Tax Rate per $1,000 Assessed Value”, but it is clear from context that this data is really tax rate per thousand dollars of market value, otherwise known as true value tax rate. This is the appropriate kind of tax rate for this analysis.
2008 Fairview Fire Tax Rate Is Incorrect
The key flaw is that the 2008 tax rate in the above chart is incorrect. Fairview's effective 2008 tax rate is $5.16, whereas the above chart shows it to be approximately $4.83. The final report's error in Fairview's 2008 tax rate leads to all the other errors in this passage, as will be explained below.
Genito's Blunder
How did Genito come to make this error? He apparently took an unwarranted shortcut. Instead of dividing Fairview's tax levy by Fairview's market value (the correct method, and the definition of true value tax rate), he took the Poughkeepsie portion of Fairview's tax levy and divided it by the Poughkeepsie portion of Fairview's market value. Under ordinary circumstances, such as between 2009 and 2012, Genito's method would give the same — or nearly the same — result as the correct method. Unfortunately, Fairview's circumstances in 2008 were far from ordinary.
Inequitable Apportionment
Long-time followers of my work know that for every year from 2001 to 2008, apportionment of Fairview's fire tax levy between Poughkeepsie and Hyde Park has been inequitable, resulting in different true value tax rates for the Poughkeepsie and Hyde Park segments, in violation of New York State Real Property Tax Law. In 2008, the Poughkeepsie segment had a true value tax rate of $4.83 — the number on Genito's chart — but the Hyde Park segment had a whopping true value tax rate of $5.96. All these facts were documented in detail four years ago here, and especially here.
Corrected Chart
In order to fairly graph tax rates, the Y-axis should ordinarily begin at zero dollars. Genito's chart begins the Y-axis at $2, presumably to better visualize small changes in tax rate. The following chart, using the corrected 2008 value, takes this decision further, beginning the Y-axis at $5. This way, small changes in tax rate can be seen even better.
Although the final report's chart includes a straight line approximation to the data and an extrapolation to 2017, such analyses are not appropriate to the corrected data. That's because the corrected data simply does not fit a straight line well enough to justify such an approximation. The corrected data cannot meaningfully be used to linearly extrapolate Fairview fire tax rate out even one year — let alone five years. Once again, Genito concurs with this judgement, which is supported by generally accepted criteria for goodness of fit to a straight line. What this means is that there is simply no basis to support the second and third sentences in the final report's passage, which project 2017 values.
Fairview's Tax Rate Has Been Trending Down Until 2012
We know that taxes are always going up, right? Well, not in Fairview. Examination of the corrected chart between 2008 and 2011 shows that Fairview's yearly tax rate change has been downward twice and upward only once. Even the single upward change from 2010 to 2011 leaves Fairview's tax rate lower than it was in 2008. A standard linear approximation to Fairview's 2008—2011 tax rate would show a decreasing tax rate, not an increasing one.
Fairview's Tax Rate Has Been Approximately Constant — Until 2012
Fairview's downward trend in the 2008—2011 time period is actually quite small. It would probably make more sense to approximate Fairview's tax rate during this time period as a constant value. With such an approximation, Fairview's 2008—2011 tax rate is $5.10 plus or minus 1.2 percent for every year in this interval. The 2011 tax rate is equal to this constant value to within 0.2 percent.
Fairview's 2012 Tax Rate Breaks the Pattern
This pattern of constant tax rate is broken in 2012, where the tax rate soars 12 percent from its historical value of $5.10. It is this break from the pattern that makes it infeasible to predict future tax rates. Another way to look at it is that there is no way one could have predicted Fairview's 2012 tax rate by extrapolation from the previous 4 years.
Average Yearly Tax Rate Increase Is Misleading
What about the first sentence in the final report's passage (average tax rate increase of 4.4 percent per year)? This statistic depends crucially on the 2008 value. With the corrected value, the average tax rate increase is only 2.6 percent per year, not 4.4 percent. Thus the passage's first sentence is incorrect.
Of course, even the corrected sentence is of dubious value. Averages can be deceiving. Why mention a formally correct “average increase” when the tax rate actually decreases as often as it increases. A man drowned in a river whose “average” depth was 6 inches. But he was in the 10-foot part. For the average yearly tax rate increase, essentially all of the tax rate increase during the 5-year period occurred in the last year.
Flawed Passage Is Best Removed
According to Genito, the report's inclusion of the above-quoted passage stemmed from a request by Fairview officials (the “Study Committee”) for a projection based on a 5-year history. Now that Genito has accepted my correction, he and I seem to agree that no future projection can be justified by the data. As I see it, the average tax rate increase is misleading as well, and is best omitted. The only part of the flawed passage that could be of positive value is the corrected chart. This chart is certainly useful for understanding Fairview's fiscal situation, but such an understanding appears to be outside the scope of this report.
In spite of the central importance of tax rates to fiscal analysis, the final report devotes only three sentences and one chart to Fairview's past and future tax rates. Unfortunately, these three sentences, which pertain to average yearly tax rate increase and projection to 2017, are incorrect. Also, the chart contains some incorrect data and an incorrect linear approximation. When I presented my analysis to Genito, he readily concurred that all these statements and the chart are flawed.
Flawed Final Report Passage
The flawed information, on page 175 of the final report PDF (labeled page 167), is as follows:
The Fairview Fire District tax rate has increased on average 4.4% each year from 2008 through 2012. A linear regression of the past five years going forward indicates that by 2017 the tax rate would approximate $6.50 per $1,000 taxable assessed valuation. As such, and all things being equal, the median home would expect to see their fire service property tax to rise from $1,321 per year to $1,502 in 2017.
The above chart, copied from the final report, is confusingly labeled “Tax Rate per $1,000 Assessed Value”, but it is clear from context that this data is really tax rate per thousand dollars of market value, otherwise known as true value tax rate. This is the appropriate kind of tax rate for this analysis.
2008 Fairview Fire Tax Rate Is Incorrect
The key flaw is that the 2008 tax rate in the above chart is incorrect. Fairview's effective 2008 tax rate is $5.16, whereas the above chart shows it to be approximately $4.83. The final report's error in Fairview's 2008 tax rate leads to all the other errors in this passage, as will be explained below.
Genito's Blunder
How did Genito come to make this error? He apparently took an unwarranted shortcut. Instead of dividing Fairview's tax levy by Fairview's market value (the correct method, and the definition of true value tax rate), he took the Poughkeepsie portion of Fairview's tax levy and divided it by the Poughkeepsie portion of Fairview's market value. Under ordinary circumstances, such as between 2009 and 2012, Genito's method would give the same — or nearly the same — result as the correct method. Unfortunately, Fairview's circumstances in 2008 were far from ordinary.
Inequitable Apportionment
Long-time followers of my work know that for every year from 2001 to 2008, apportionment of Fairview's fire tax levy between Poughkeepsie and Hyde Park has been inequitable, resulting in different true value tax rates for the Poughkeepsie and Hyde Park segments, in violation of New York State Real Property Tax Law. In 2008, the Poughkeepsie segment had a true value tax rate of $4.83 — the number on Genito's chart — but the Hyde Park segment had a whopping true value tax rate of $5.96. All these facts were documented in detail four years ago here, and especially here.
Corrected Chart
In order to fairly graph tax rates, the Y-axis should ordinarily begin at zero dollars. Genito's chart begins the Y-axis at $2, presumably to better visualize small changes in tax rate. The following chart, using the corrected 2008 value, takes this decision further, beginning the Y-axis at $5. This way, small changes in tax rate can be seen even better.
Although the final report's chart includes a straight line approximation to the data and an extrapolation to 2017, such analyses are not appropriate to the corrected data. That's because the corrected data simply does not fit a straight line well enough to justify such an approximation. The corrected data cannot meaningfully be used to linearly extrapolate Fairview fire tax rate out even one year — let alone five years. Once again, Genito concurs with this judgement, which is supported by generally accepted criteria for goodness of fit to a straight line. What this means is that there is simply no basis to support the second and third sentences in the final report's passage, which project 2017 values.
Fairview's Tax Rate Has Been Trending Down Until 2012
We know that taxes are always going up, right? Well, not in Fairview. Examination of the corrected chart between 2008 and 2011 shows that Fairview's yearly tax rate change has been downward twice and upward only once. Even the single upward change from 2010 to 2011 leaves Fairview's tax rate lower than it was in 2008. A standard linear approximation to Fairview's 2008—2011 tax rate would show a decreasing tax rate, not an increasing one.
Fairview's Tax Rate Has Been Approximately Constant — Until 2012
Fairview's downward trend in the 2008—2011 time period is actually quite small. It would probably make more sense to approximate Fairview's tax rate during this time period as a constant value. With such an approximation, Fairview's 2008—2011 tax rate is $5.10 plus or minus 1.2 percent for every year in this interval. The 2011 tax rate is equal to this constant value to within 0.2 percent.
Fairview's 2012 Tax Rate Breaks the Pattern
This pattern of constant tax rate is broken in 2012, where the tax rate soars 12 percent from its historical value of $5.10. It is this break from the pattern that makes it infeasible to predict future tax rates. Another way to look at it is that there is no way one could have predicted Fairview's 2012 tax rate by extrapolation from the previous 4 years.
Average Yearly Tax Rate Increase Is Misleading
What about the first sentence in the final report's passage (average tax rate increase of 4.4 percent per year)? This statistic depends crucially on the 2008 value. With the corrected value, the average tax rate increase is only 2.6 percent per year, not 4.4 percent. Thus the passage's first sentence is incorrect.
Of course, even the corrected sentence is of dubious value. Averages can be deceiving. Why mention a formally correct “average increase” when the tax rate actually decreases as often as it increases. A man drowned in a river whose “average” depth was 6 inches. But he was in the 10-foot part. For the average yearly tax rate increase, essentially all of the tax rate increase during the 5-year period occurred in the last year.
Flawed Passage Is Best Removed
According to Genito, the report's inclusion of the above-quoted passage stemmed from a request by Fairview officials (the “Study Committee”) for a projection based on a 5-year history. Now that Genito has accepted my correction, he and I seem to agree that no future projection can be justified by the data. As I see it, the average tax rate increase is misleading as well, and is best omitted. The only part of the flawed passage that could be of positive value is the corrected chart. This chart is certainly useful for understanding Fairview's fiscal situation, but such an understanding appears to be outside the scope of this report.
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