Are city resident property taxes really lower now than 8 years ago?


I received an email sent to the various news outlets on Tuesday from Alderman Pat Russo, hours before the upcoming council meeting where crucial decisions on overriding the tax cap and official approval of changes to the mayor’s budget would be made. Attached was a chart that took an angle on the proposed tax and user fee increase that I had not heard anyone express so far.

You can view the chart here. Russo passed out copies to members of the public before the meeting, and spoke about it after the public hearing on the budget.

Basically, he shows that even with the proposed 8% increase in property taxes and 9.79% increase in user fees, which are the highest in at least ten years, total property taxes and fees for city residents, including county and school district taxes, would actually be lower than what residents were paying in 2011 through 2015.

But how can that be correct? To my recollection, county and city taxes have generally been increasing by small amounts each year. The school district has been up and down and sometimes flat.

I spot checked some of the values in the chart and found no errors, using information from the Greater Amsterdam School District and Montgomery County websites.

But looking at one specific case as an example – in Montgomery County’s 2019 budget, the tax levy increased by 1.98%. So how did the city’s tax rate decrease in the same year?

The answer lies in a concept called the equalization rate. Since both the school district and county encompass multiple municipalities, each one has it’s own equalization rate which is based on it’s most current assessed value. This equalization rate results in different county and school tax rates for the various municipalities.

You can check this link to see how the tax rates have changed for the municipalities in Montgomery County over the years.

According to Russo, the city has not had a complete re-assessment of city properties in twenty years. Michael Chiara, who attended the meeting and who was involved with the assessment process years ago, said it was done in 2014. Digging into that matter is a topic for another article, but suffice to say, the county tax rate for city residents has generally declined while other towns have gone mostly up. So that’s how it’s possible for our rate to go down during a year with a tax levy increase – because overall, the share that the other municipalities are paying is increasing.

At the meeting, Russo also went on the compare the cost of garbage removal, quoting a friend from a neighboring town who had to pay over $700 per year for one large trash container, compared to the city rate of $269 for single family home per year. He also compared to high cost of septic tank maintenance compared to the city’s rate of $303 per year for a single family home.

So is Russo correct? It looks like it. However, does it justify the tax and user fee increases?

For me the only justification for the tax increase is to reverse the trend of growing fund balance deficits. It is necessary to keep the city from running out of money while maintaining essential services. In my opinion, making cuts to the police or fire departments or closing down city parks would have a far greater negative impact on our quality of life than the modest tax increase that this budget creates.

The large increase in user fees is primarily due to extra contingency funds added to the sewer fund. Because of the city’s financial situation, borrowing in the coming year will be difficult and could incur higher interest rates. It was because of this that the council added extra funds for essential equipment repairs and replacement needed for the sewer system which were requested by City Engineer, so that the city can pay cash for these projects rather than borrow more money.

So while Russo’s analysis offers some comfort to worried tax payers, to me the increases are justified and essential for the survival of the city regardless of whether my other taxes go up or down.

For those in attendance who were audibly opposed to the tax increase, Russo’s analysis didn’t seem to change their mind and judging from the comments I heard, was generally regarded as a white-wash of the situation.

However, I think it’s worth pointing out that no one on either side of the issue is happy that taxes and fees are going up this much.

Summarizing the situation, Russo concluded, “Now that we know what our problems are in the city with our $8.34 million deficit within our budgets, we have to address that situation. I don’t really want to raise taxes, that’s the worst thing that I could possibly want to do because I’m a homeowner in the city too.”

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.