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Published October 26, 2009 10:05 pm - The tax levy is a more reliable measure of how government is spending than the tax rate is.
EDITORIAL: Real indicator is the tax levy
Let's talk about tax levies, tax rates and how best to characterize for readers what is likely to happen to what really matters — tax bills.
For decades, the Press-Republican wrote about budgets and headlined the tax rate as the indicator of what government had in mind for its taxpayers. After all, we reasoned, if you take the tax rate and multiplied it by the assessed value on the parcel of property, that would yield the amount to be paid in taxes, and that was what everybody most needed to know.
For example, if the tax rate is $10 per $1,000 of assessed value, and the assessed value is $100,000, the amount owed in taxes would be $10 times $100,000, divided by $1,000: Voila — you pay $1,000.
That seemed a communicative enough way to present the tax picture.
Then one day we received a phone call from Bernard Miller, who was then director of Real Property Tax Services in Essex County. He wanted to explain to us why we'd been misleading readers for all those years by emphasizing the tax rate.
The tax rate is largely irrelevant, he explained, because it is so skewed by assessment changes. If your assessment goes up, the tax rate should go down proportionally, but it rarely does. The assessment exerts an enormous influence in computing the tax bill.
The levy, on the other hand, is a consistent, independent indicator. It is the difference between government's income and expenses, meaning it is the amount that must be raised by taxes. It has nothing to do with a fluctuating tax rate and has no relationship to escalating assessments.
It stands alone as a reflection of how government is spending money.
Realizing the wisdom of Miller's argument, we immediately switched our focus in tax stories to the levy. We still report the tax rates, but we focus more on the levy.
Government officials didn't necessarily like that. That's because, by using tax rate, they could hide a big increase in spending behind an always-rising assessment total. They could crow about a steady tax rate in spite of their increased spending, because assessments were inevitably going up to provide them more and more revenue without taxpayers being aware of it.
Once we began using the levy, they no longer had that convenient fog over the whole process.
The other day, a budget official in the Town of Black Brook was berating a reporter for using levy rather than rate as the indicator of the tax picture. The levy — the amount they were spending — was up 21 percent, but the tax rate was actually dropping, thanks to rising property assessments. We guarantee most town property owners will pay more taxes next year, if the budget is adopted as is.
This week, Plattsburgh Mayor Donald Kasprzak was on the radio claiming "some media outlets" (the Press-Republican) use tax levy because it's higher than the tax rate and therefore "gets more attention."
No. It's because it has more meaning for the taxpayer. Real, not manufactured, meaning. And that's why government officials don't like it.
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