Now in its fourth year of a public review led by the Pine Plains Town Planning Board, the Durst development remains a long way from approval, but recent statements from the developer, town officials and citizen leaders opposing the plan suggest that a much smaller, more compact subdivision could be up for final consideration by early next year.
At a town planning board meeting on June 4, new consultants representing the Durst family-- multi-billionaire owners of several prominent Manhattan skyscrapers—offered to redesign the “golf-oriented” subdivision by substantially reducing the number of homes and conserving various ecological and visual features of the 2,200-acre site straddling the Taconic State Parkway just below the Columbia County line.
Critics of the initial proposal, which would likely inflict severe damage on the town’s taxpayers, school system and rural character, voiced cautious optimism.
“It’s a big step forward from where we’ve been," said John Lyons, attorney for Pine Plains United, a citizens group which has spear-headed opposition to the original 1,000-unit plan. “The next step will be to see whether they walk the walk. If they do, there can’t help but be significant positive changes to the original plan.”
The Dursts decided to scale back their ambitions, suggested Pine Plains United Co-Chairman Jim Mara, under pressure from widespread opposition voiced at a series of public hearings on the development over the past two years.
“They had to come up with a new plan because they got hammered: hammered by the public, hammered by Pine Plains United, hammered by experts from Scenic Hudson and the Dutchess County Planning Department,” Mr. Mara said.
Forecasting how many homes will eventually rise on the bucolic site of the former Carvel estate is complicated by efforts in Pine Plains to adopt a complex zoning ordinance now under consideration by the five elected members of the town board. The final zoning ordinance will be instrumental in determining how many homes can be approved by the town’s planning board and what concessions Durst will have to make towards preserving the area’s rural character, ecological resources and fiscal stability.
Pine Plains Town Supervisor Gregg Pulver, who said his town board has “every intention of approving a final ordinance, with plenty of opportunity for public input, by October,” has suggested 500 homes as a desirable target.
“We’ve never given the developers any indication,” said Pulver, “that we would support anything more than the proposed zoning ordinance would allow, around 500 units, which comes to a roughly four-acre density out there… We’d want to combine that with 50-55% open space, but true open space, not lawns and gardens, that would be open to public access.”
Pine Plains United’s Mara asserts that 500 homes is too many and that the zoning ordinance, as originally submitted to the Town Board after lengthy public review, would allow far fewer.
A total number of 200-300 units in Pine Plains and the adjacent town of Milan “is probably a number we would be open to, depending on how the subdivision is laid out on the site and how it addresses sensitive environmental features and the many other concerns voiced by the public," said Mr. Mara.
Beyond the housing density and the environmental protections, Supervisor Pulver is wary of what could happen to the property if Durst, after winning approval for a specific project, changes his game plan or sells the property to a mass-market home builder keen to maximize short-term profit.
“My concern,” the supervisor said, “is that they start building the project and then they realize that the golf facilities are not going to attract the buyers they anticipate, and they try to come back for more lots than we’ve approved… There are going to be some intense negotiations to guarantee that what they say they’re going to build is what they end up building.”
The coming months are certain to see a slew of public hearings and debate on the specifics of the town’s final zoning ordinance and on the details of the Dursts’ revised subdivision plan.
As to whether we can expect Durst and company to be breaking ground next spring on a 300 unit subdivision that all sides can accept, Pine Plains United’s attorney Lyons concluded, “I don’t think things are advanced yet to the point where you can say anything so specific.”
The county’s Industrial Development Agency (IDA), in its April vote to reject the Widewaters Group’s request for substantial tax relief, cited various deficiencies in the developer’s application, including the lack of signed leases with specific retail chains and scant evidence that the tax benefits would be passed on to those retailers in the form of lower rents. But the IDA board members, appointed to boost the county’s economy by granting tax incentives and other subsidies, failed to make use of the most basic financial tool that any businessman or government official would be expected to rely on: a “cost-benefit analysis” to quantify the dollar amount of requested tax relief and to analyze the financial benefits that the developer claims his shopping center will produce.
With the IDA offering to reconsider subsidies for Widewaters once leases are signed, and with the developer and the Wal-Mart Corporation likely to seek other tax incentives for the project, it seems timely to offer our own analysis as guidance for officials evaluating public subsidies, for residents who could benefit from thoughtful incentive programs and for local business owners who could suffer unfair competition if the incentives are not carefully crafted.
Estimating the cost of Widewaters’ requested tax relief is fairly straightforward, despite the lack of sufficient data in the developer’s filings with the IDA. Based on our research and discussions with Widewaters, the proposed tax savings—a combination reduced property taxes, elimination of the county mortgage recording tax and a waiver on sales tax for construction materials used in the build-out—would amount to around $3 million over five years.
The county and the Hudson Central School District would each shoulder about $1 million of the subsidies, while the Town of Greenport would give up tax revenues of about $750,000.
Estimating the fiscal benefits of the giant retail project is more difficult, but they are unlikely to be anywhere near as large as the developer has suggested. In filings with the IDA, Widewaters claims the completed shopping complex will generate $185 million of additional sales each year. Excluding the Wal-Mart superstore, which was not part of the IDA application as Wal-Mart itself will construct and own the building, the sales estimated by Widewaters for the center come to $130 million.
The evidence from big-box retail developments in rural areas, however, indicates that 85-90% of sales at the center will cannibalize business from existing retailers now operating in and around the county. In other words, net new sales would account for only $20 million, excluding Wal-Mart, yielding the county and its municipalities no more than $800,000 in additional annual sales tax proceeds, compared to the $3 million in tax subsidies requested over five years.
Widewaters believes that 85-90% of the center’s revenues, including Wal-Mart’s, will be new sales, implying that the retailers will generate some $160 million in new spending and purchases that shoppers now make in other nearby counties. Such a large addition to Columbia’s total sales tax base of $500 million seems a stretch, and it would require every household in the county to find an additional $6,500 per year to spend at the Widewaters plaza,
The developer’s claim that its tenants will “create” over 950 full-time jobs is also inconsistent with retail industry trends. The vast majority of new jobs in regions like Columbia with low unemployment rates are typically filled by workers from existing businesses.
“That was the issue that bothered me most,” said County Board of Supervisors Chairman Art Baer, who opposed granting the Widewaters tax package. “If they had a national hardware store chain as a tenant, they may be replacing the job of a guy who is making $16 an hour plus benefits at a local hardware store with a job paying $10 an hour with no benefits at the big chain store. Then he can’t afford to live where he’s living and the local store loses the sales.”
Complementing the cost-benefit comparison of tax incentives-- the $3 million subsidy vs. $800,000 in new annual county sales tax proceeds—is the analysis of other potential costs and benefits of such huge project. As Widewaters’ representatives have stressed, the completed plaza, even after incentives, will generate substantially more property tax revenues than the now vacant site on Fairview Avenue. However, numerous studies have concluded that the costs of providing basic police, fire, and highway services to a big-box center like Widewaters’ far outstrip the additional tax revenues the shopping plazas typically generate.
In our testimony last year to the Greenport Town Planning Board—which approved Widewaters’ development without retaining any experts to analyze its fiscal impacts—we concluded that the costs of meeting the center’s needs would exceed additional town tax revenues by some $350,000, or 20% of the town’s 2007 property tax levy.
The county IDA has signaled a willingness to reconsider tax breaks for Widewaters as leasing activity progresses. Wal-Mart and Widewaters are both likely to apply for property tax abatements under a separate state program that encourages counties, towns and school districts to subsidize commercial expansion. Before reviewing any of these applications, officials authorized to fund the incentives with taxpayer money would be wise to bone up on the basics of cost-benefit analysis.
Ladies and Gentlemen of the Planning Board:
The Durst Organization has produced for you a labyrinth of numbers in its 1,500-page Environmental Impact Statement, all of which paint a glowing portrait of an environmentally sensitive, financially beneficial windfall for our rural communities.
I would like to focus your attention on ten simple, common-sense numbers which, when studied along with supporting data I will submit later, should help to convince you that the Carvel Development will not look anything like the upscale golfing resort proposed and that it could well become a financial disaster for the town, its property owners, its local businesses and the Pine Plains Central School District.
The first set of numbers concerns the claim made by Durst and his team that they have identified a market for 1,000 homes to be sold to affluent, avid golfers and resort lovers, mostly from the New York metropolitan area.
THIRTY-THREE PERCENT: The decline in the numbers of Americans who played golf at least twice a month from 2000 to 2005. In other words, overall demand for golfing and golf-oriented communities has plummeted by one-third.
THREE THOUSAND TWO HUNDRED: The number of new homes surrounding golf facilities, including the Durst application, that are currently proposed for construction within 40 miles of Pine Plains. In other words, even if there were growing demand for golf resorts, every home Durst puts on the market will likely be competing with two other very similar units only a short drive away.
SIXTY-TWO DEGREES FARENHEIT: The average high temperature, from November to March, for the six golf communities that Durst and his partner, Landmark Land, identify in their impact statement as “comparables” for Carvel. The average high temperature in winter at the other 11 resorts that Landmark is managing, but which were not included in the filings, is 68 degrees. The average high winter temperature for Pine Plains: 37 degrees. If there are truly comparable developments for what Durst is proposing, we have not seen them.
EIGHT-HUNDRED-THOUSAND DOLLARS: The median home price Durst is seeking for his 1,000 units and the basis of his calculations for property tax revenues contributed to the town and school district by the Carvel Development. The 2007 median home price in Dutchess County was $330,000, 60% less.
ZERO: The number of development projects outside of New York City that the Durst Organization has completed. Zero is also the number of golf communities that Landmark Land has designed and built out to completion.
Faced with collapsing demand, exploding supply, no comparable projects and no proven track record, how can anyone expect that Durst will deliver an upscale golf community in a climate like ours with homes priced at two-to-three times the going rate?
If the development will not be what they claim, what might it actually look like instead? If the last 60 years of history in the Hudson Valley is any guide, these 1,000 lots, if approved, will attract middle-class families moving in from cities and suburban areas in order to find more affordable housing, quieter communities and better public schools for their children.
Unless the history of our region is about to change drastically, here then are two key numbers to highlight the impact our new neighbors could have.
ONE-POINT-THREE-FIVE: That is how many students enrolled in the nearby Arlington school district for every new house built there during the mid-1990s when the area experienced a housing boom, spurred by in-migration. It is a number that many other school administrators have described as conservative, and it is also supported by data from other fast-growing school districts in the mid-Hudson Valley. If the same enrollment ratio holds for Carvel, it will equate to 1,350 new students attending the Pine Plains public schools, or nearly double the 1,400 students enrolled in the district last year.
ONE-THOUSAND-NINE-HUNDRED DOLLARS: The average increase in school taxes for each home in the district necessary to cover the annual deficit created by adding those 1,350 students.
I understand the community’s concern that recent declines in school enrollment may continue. There is plenty of opportunity for growth that will boost enrollment. The question is how much you want, how quickly and at what cost. Doubling the student body with one subdivision over a five- or ten-year period hardly seems an attractive solution.
One last set of numbers, which shows who stands to win if this development is approved and who, along with the taxpayers, will likely be the big losers.
EIGHTY MILLION DOLLARS: The estimated profit that Douglas Durst stands to make if he were to sell the 1,000 approved lots at Carvel before putting a single shovel in the ground. You can’t blame him if he concludes his resort plan is not viable and decides to sell out the unfinished building lots, but you needn’t feel any sympathy for him either.
ONE-HUNDRED-AND-FIFTY-THOUSAND SQUARE FEET: A rough guess of how much retail space will be needed to meet the local shopping needs of the 2,500 or so new residents at Carvel. “Good for our local businesses,” you might say. But, again if history is a decent guide, most of this new space will not be developed in the middle of town but in strip centers along Route 199. These retail centers typically attract national and regional chains like Hannaford’s, CVS, Applebee’s, and Ace Hardware with their strategy of under-pricing local merchants in order to drive them out of the market for good. Such a rapid increase in new homes located so far from the central hamlet will likely to put an end to Duell’s Hardware, Pine Plains Pharmacy, Peck’s Market and other business stalwarts of the town.
TWO HUNDRED: The total number new homes built in the ten towns of Northern Dutchess County in a strong year for housing. The Carvel proposal, in other words, will flood the market with a five-year supply of building lots that will dramatically reduce the selling prices of existing homes and raw land for miles around. If that’s not a confiscation of private property rights from all of us who own property in the area, I don’t know what is.
So, members of the Planning Board, these are ten numbers that suggest there could be severely negative financial impacts from the Carvel Development as currently proposed. I cannot ask you to accept my numbers as the only, or even the best, estimate of what the future will bring. But I urge you to accept them as a realistic and carefully researched financial scenario of what could indeed happen here. And if you do accept the possibility of a financial outcome very different from what Durst predicts in his filings, then you must take steps to ensure that the town is not left holding the bag if his estimates prove to be wildly optimistic.
You can and should request that Mr. Durst put his money where his mouth is by posting a bond large enough to mitigate the financial impacts on the town and the school district should his resort community in fact turn out to be just another sprawling subdivision of new families whose demands for public services will far exceed their property tax payments.
You can and should insist that if he is going to take such huge profits out of your town, he does not do so at the expense of the town’s property owners and businesses. Restrict the number of lots and houses he can sell in a given year. Make him pay for new fire trucks, highway equipment and school buildings should the need arise. Make him provide affordable housing for qualified town residents. Make him help revitalize local businesses in the hamlet. In short, make him mitigate the potentially dire impacts of his development so that whatever you approve on the Carvel property is consistent with the goals set out in your town’s Comprehensive Plan.
No one can ask you to stop development in the town, only to anticipate and mitigate potential problems so that the worst case scenario does not become a reality.
Sincerely,
James Sheldon
Gallatin, NY
One of the mass mailings invites us as “dear neighbors” to “meet the Durst family,” and in this and future postings we hope to get to know the Dursts, not their soothing, sepia-toned portraits gracing the brochures, but their capabilities, their character and their business strategy.
Our first link, Dear Mr. Durst, is a letter we wrote to the company’s CEO in 2005 asking him to explain why “a man of your environmental vision, tremendous wealth and civic generosity” would stake his reputation on a development whose likely legacy will be to “turn our rural way of life into the next front line of suburban sprawl.” The letter remains unanswered, as do the questions it raised, leaving us little choice but to assume that this man with a personal fortune estimated at over $2 billion simply wants to pocket another $100 million or more at our expense.
There is another member of the Durst “family,” one who has been omitted from any mention in the brochures: Durst’s primary planning, construction and marketing partner, the Landmark Land Company, which we profile in a summary of our own research, based on publicly available sources. Landmark, the reincarnation of a bankrupt savings & loan, appears to have plenty of experience in real estate speculation but virtually none in developing from scratch a project of this scale in a snow-belt region.
Also included in the Landmark report is a brief outline of the U.S. golfing industry, which raises further questions about Mr. Durst’s ability, or his intention, to market the Carvel development as an upscale, second-home golfing resort.
We end this installment of our “Durst Watch” with a letter from the Dutchess County Department of Planning and Development which takes the Durst team to task for the “disturbing incongruity” between the environmentally sensitive wonderland described in their public filings and the destructive, sprawling behemoth they are asking for approval to build. “Clearly,” the county’s letter states, “many portions of what is being proposed is not green development, but ‘greenwash.’”
Our first piece on the costs of growth, a 2005 column entitled Once Upon A Time…, raises the central questions that residents of Pine Plains and neighboring towns must grapple with in order to make informed decisions on the Durst proposal. The next coulmn, Lessons From Our Neighbors , draws on our own extensive research into the nearby Dutchess County school district of Arlington, which provides a compelling precedent for estimating the size of the school tax burden the Durst developers will likely leave behind as their most lasting financial legacy. A Small Number refutes the assumptions in the Durst team's own analsyis of the project's impact on school taxes. Finally, Battle of the Experts tries to cut through the contentious data dueling and underscore the irrefutable fact that "judging from development patterns in every other town in the Hudson valley, the costs of providing education and other public services are likely to be much, much greater than the additional tax revenues received."
The dual perils of declining sales taxes, which comprise 30-50% of a county’s tax revenues, and a large backlog of urgent capital projects will likely put a growing burden on property taxpayers, especially in more heavily indebted counties that cannot borrow much money to fill the fiscal gap.
This is the most worrisome conclusion from our latest survey of 22 counties in and around the Hudson Valley, which draws on 2006 budget data compiled by the Office of the State Comptroller. Detailed comparisons of per capita levels of taxation, spending and indebtedness for all the sampled counties are available in our Budget Scorecard Database .
The region’s vibrant economy over the past several years has produced an unexpected windfall for county budget managers who rely on sales taxes and, in many cases, a levy on new mortgages to supplement property taxes as their primary source of revenues. Meanwhile, county officials have often been reluctant to spend tax dollars under a long-range plan for upgrading their aging infrastructure, preferring instead to wait until capital improvements become unavoidable. The combination of booming revenues and stingy spending have left many counties with large cash reserves, which can help to finance long-neglected investments in infrastructure projects.
The OSC data suggests there may be particular pressure to raise property taxes in three counties-- Rensselaer, Broome and Livingston-- where spending on capital improvements has been well below average for several years and debt levels, adjusted for cash reserves, are relatively high. Conversely, Greene, Delaware, Schoharie and Washington counties owed relatively little money, net of reserves, through 2006 and appear to have invested consistently in their public infrastructure.
In Columbia County, where taxes per resident are among the highest in the region, rapid growth in property taxes and debt over the past few years have created a sizable reserve fund. The fund, which amounted to over $26 million at the end of 2007, according to County Treasurer Kenneth Wilber, is nearly enough to cover the $30 million in capital improvements expected over the next three years, including a major expansion of the county’s courthouse and construction of a new headquarters for its Social Services department. Columbia’s below average indebtedness, even after a recent$7.5 million bond issue, gives the county some leeway to borrow additional funds if sales taxes and other revenues drop more drastically than anticipated.
Art Baer, the newly appointed Chairman of the Columbia County Board of Supervisors, hopes that the county’s large reserve fund and solid balance sheet will allow him to take a more considered approach to major spending decisions.
“I want to take a longer view of our capital requirements,” Mr. Baer said. “We have a number of large projects that we’re trying to prioritize and figure out how to fund them without resorting exclusively to property taxes.”
County leaders are in the early stages of developing a strategic plan to streamline financial operations and improve capital budgeting, Mr. Bear said, adding that “We want to produce a plan that minimizes property taxes while maintaining the level of services are residents have come to expect and deserve.”
Columbia is far from alone in its legacy of under-spending on capital improvements. Averaging OSC data on capital outlays for the five years from 2002-2006 indicates Columbia spent 36% less per resident than the average of the 22-county sample while Dutchess allocated 44% less money and Rensselaer 53% less than average on capital projects. Topping the list of apparent under-spending are the counties of Madison (78% less than average), Saratoga (70% less) and Broome (86% less). The highest capital budgets over the period came from Putnam (81% more than the average), Warren (121% more) and Delaware, which spent nearly four times the average per capita amount on infrastructure.
Rensselaer, with a relatively light tax burden, and Dutchess, where taxes per resident are about average, will both need to raise debt from 2006 levels in order to catch up with the capital spending patterns of their peers, the OSC data suggest.
As a case in point, we’ve focused on one contested race where finances are at the center of the campaign and where the stakes are high: the race for supervisor of Columbia County’s largest town, Kinderhook, where the four-term incumbent, Douglas McGivney, is running against Gary Strevell, who has served since 2003 as Mayor of Valatie, one of the incorporated villages within the town.
Our budget analysis indicates that both Valatie and Kinderhook Town have built up admirable fiscal records under their current leadership, compared to most other municipalities in the region. Though the analysis does not touch on the quality of services provided by either candidate during his tenure in office and in no way reflects an overall endorsement, the edge for financial achievement would have to go to Mr. McGivney.
Among the most important figures in assessing budget discipline are the level and growth of property taxes raised to support municipal services. Kinderhook’s property taxes for all town services, including fire protection, have grown 39% since 2004, somewhat higher than the 30% average for 28 towns in the region that we monitor in the Budget Scorecard Database .
Local property taxes in Valatie have increased 48% over the same period-- primarily to help finance repairs and expansions of the village’s water and sewer facilities—more than twice the 20% average growth of similar villages in the area.
The absolute level of property taxes per resident also favors Kinderhook, which in the current year levied $120 for each of its 8,300 residents, 3,000 of whom live in incorporated villages and pay taxes to the town as well as to their village. Even after excluding village residents from the calculation, the town tax levy of $187 per capita is still among the very lowest of all towns in Columbia and northern Dutchess counties.
Valatie’s property taxes per resident are also very low, at $140, but the figure is somewhat misleading. In order finance extensive road, water and sewer improvements without raising additional taxes, Valatie has since the late 1990s maintained a very high debt load, currently topping $3 million. If we add to the tax levy the annual expense of servicing this debt, the per capita cost this year rises to about $300, in line with the average for ten similar villages in the region.
Kinderhook, with no debt on its books over the past four years, has maintained one of the lowest per capita property tax levies in the region; Valatie’s spending per resident, including annual debt service, is around the average the for other small villages in the area.
Mayor Strevell’s campaign has been critical of Kinderhook’s spending growth, not its tax levy, since Mr. McGivney became supervisor in 2000. A comparison of growth in spending for all services shows Kinderhook’s expenses growing 12% between 2004 and 2007 while Valatie’s total expenses have grown 21%.
Comparing the expense growth of Valatie to Kinderhook may be of limited value as Mr. Strevell, like most village mayors, has had to grapple with the very expensive burden of upgrading an aging water and sewer system while Mr. McGivney has been spared this costly challenge.
It is impossible to say, from the results of our analysis, which candidate is better qualified to serve as Kinderhook supervisor in the years ahead. What we can say, though, is that the town’s fiscal performance under Mr. McGivney has been commendable and, on some key measures, outshines even the very sound financial track record of his opponent.
We’ve compared data for 28 towns and ten villages in Columbia and northern Dutchess counties with the aim of identifying the best and worst municipalities in terms of their recent financial management, a crucial test for any elected official. The data, from the Office of the State Comptroller (OSC), provide preliminary answers to three basic fiscal questions: 1) How high are taxes in the town or village relative to its peer group; 2) How much have the municipality’s property taxes increased over the past three years; and 3) Are large future tax increases likely due to the town government’s failure to invest sufficiently in upgrading its highway department and road network, which typically account for two-thirds of town spending.
The results of our research, tabulated below, offer merely a rough sketch of fiscal performance, a handy reference guide for voters and candidates seeking to assess the strengths and weaknesses of current office holders.
High per capita taxes or a rapid increase in the tax levy does not necessarily mean incumbent officials have done a bad job managing their fiscal affairs. But those officials should try to clarify how and why their constituents have benefitted from a tax burden that is clearly heavier than in neighboring locales. For instance, voters in towns with the highest recent growth in taxes— especially New Lebanon, but also Canaan, Chatham and Germantown—should be seeking explanations from their incumbent officials. Likewise, towns with high per capita taxes despite relatively low levels of highway investment-- notably Greenport and, to a lesser degree, Ancram-- owe their constituents more fiscal clarity.
Conversely, a low tax burden per resident does not always indicate fiscal prudence. The Village of Valatie, for instance, has managed to keep its per capita taxes so low, in part, by borrowing more than $3 million in debt, or nearly $1,900 per resident, a far higher level than in any other nearby town or village. As another example, four of the five towns with the lowest per capita taxes have within their borders incorporated villages whose residents, in addition to paying village taxes, contribute levies to the town for services they may scarcely use.
A fully revealing profile of any government’s fiscal performance requires more in-depth analysis, such as we provided in our previous column, “A Tale of Two Towns,” and in the Budget Scorecard Database” .
Still, as a starting point for debate in the current campaign season, the rankings that follow might be helpful.
Current Tax Burden: Drawing on data from 2005, the latest year for which the OSC records are complete, this figure includes property, sales and other tax receipts per resident for all town and village services except fire protection.
Highest Level--Towns :Greenport ($597 per resident), Hillsdale ($541), Taghkanic ($512), Ancram ($453), Austerlitz ($433) Pine Plains ($423).
Lowest Level-- Towns : Kinderhook ($148), Red Hook ($164), Claverack ($192), Canaan ($216), Ghent ($221).
Average of 28 Towns: $325.
Highest Level-- Villages : Millbrook ($463), Chatham ($402).
Lowest Level-- Villages: Valatie ($181), Tivoli ($283).
Average of Ten Villages: $344.
Recent Growth in Property Taxes: The change from 2004 to 2007 in total municipal levies for fire, water and other special districts.
Largest Increase-- Towns: New Lebanon (114%), Canaan (76%), Chatham (62%), Germantown (61%), Claverack (49%).
Smallest Increase-- Towns: Gallatin (6% decrease), Ghent (7%), Stockport (8%), Washington (12%), Clermont (12%).
Average of 28 Towns: 30%.
Largest Increase-- Villages: Kinderhook Village (86%), Valatie (59%).
Smallest Increase-- Villages: Millerton (3%), Chatham (7%).
Average of Ten Villages: 24%.
Possible Future Tax Increases: For the 28 towns, we’ve taken OSC data on highway capital spending from 2001-2005 in an effort to identify which towns have over- or under-invested in their road infrastructure relative to the group average and are, therefore, more or less likely to see large property tax increases in the future. The most likely tax increases should come in towns which have spent substantially less than average on highway capital spending, while the least likely to see tax hikes have spent more than average over the period.
Most Likely Increases: Greenport (spent 42% below average), New Lebanon (41%), Milan (39%), Washington (38%), Clinton and North East (36%).
Least Likely Increases: Claverack (spent 116% above average), Rhinebeck (91%), Austerlitz (68%), Red Hook (44%), Livingston (27%).
We urge all readers who own or rent a home here to register and vote in their Hudson Valley towns.
Re-registering to vote from your primary residence to your second home, whether owned or rented, is simple, entirely legal and carries virtually no risk, as a website developed by the New York Democratic Lawyers Council makes clear. Please visit the site, CountryVote.org , which has convincing and authoritative answers to any questions about voting where your second home is located. (The only case where re-registering may cause complications, according to the site, is for rent-controlled tenants in New York City who are already in violation of the program’s guidelines.)
In order to change your registration, all you need to do is fill out the attached Registration Form with your country address. If you are unable to be here on Election Day, it is easy to apply for an Absentee Ballot once you have registered.
If you are an owner or renter of a second home and you are not registered here, please fill out the form and mail it in no later than October 12!
If you are registered here, please remember to vote on November 6!
If you have friends or neighbors who are not registered here and could be, please send them a link to this site today!
Supervisor Pulver,
As your Town Board reviews the many controversial land use policies proposed in the Draft Zoning Law, there is one issue that all quarters of the community seem to agree on: a desire to promote more affordable housing for the benefit of Pine Plains residents who would otherwise be unable to buy a home in the town.
But the proposed ordinance, rather than devising a system that offers economic help to deserving residents, instead transfers most of the benefits to large-scale developers through so-called “density bonus” incentives. This seems to run counter to anyone’s interest—except the developers’—and I would urge you to revise the affordable housing regulations currently included in the plan.
As the proposal stands now, developers of subdivisions of ten lots or more would be required to set aside 10% of those lots for “moderately priced” homes. In return the proposal gives the developers the right to create the additional lots for those homes beyond what the zoning ordinance would allow, a so-called “density bonus.”
By giving additional lots to the developer, the town is allowing him to make a profit on the affordable houses which approximates his profit on the market-value homes he builds.
Consider an example: in a ten-lot subdivision of homes selling at $300,000 each, netting a per house profit of $60,000 using conservative assumptions, the developer would be given an eleventh lot where he would have to deliver an equivalent home and sell it to a qualified town resident at a discount. Though the law does not specify the size of the discount, some towns require the “affordable” home to sell at 75% of its “market value,” $225,000 in this case. The developer has “lost” $75,000 in revenues. But he has been given an additional lot which, if he had to buy it in the market, would likely cost him between $60,000 and $70,000. With the free lot in hand, the developer is able to make a sizable profit, $45,000-$55,000, on the sale of the affordable home even though it is sold for much less than market value.
Why should the town and its taxpayers give that additional profit to the developers? The returns on their investment in the subdivisions are huge, and I can assure you developers will be eager to build in the town even if they have to offer one of every ten homes at breakeven.
The new zoning code should not offer subsidies to private developers who are already likely to reap large profits for themselves and leave a legacy of sharply higher town and school property taxes for existing residents, according to many studies on growth in rural towns.
If you want affordable housing for some of your citizens, you have the legal right to make the developers give it to them. Eliminate the “density bonus.”
Sincerely,
James Sheldon
Gallatin, NY
Taghkanic has seen its town property taxes rise by over 50% in the past three years, while Gallatin’s have declined by 20%. Though both towns have received windfalls from mortgage tax receipts and speeding ticket proceeds, Gallatin has squirreled away its surplus while Taghkanic has used the extra revenues to fund its more expensive highway operations and government budget. Looking ahead, Gallatin residents could see additional major reductions in their town taxes and still leave the town with plenty of money to finance a proposed new justice court building; Taghkanic’s citizens are likely to see more tax increases even if they do not replace a cramped, rickety town hall that hasn’t been renovated in over 20 years.
Through a detailed comparison of the two towns’ finances, the first in a series of similar columns, we hope to illustrate some of the key fiscal benchmarks and budget disciplines that characterize the better- managed towns in our area and to raise financial questions that voters should be asking their candidates for local office as town elections approach this fall.
Every town is unique, and comparative statistics alone do not address the quality of the services townspeople are receiving in return for their taxes: Is road maintenance better in Taghkanic, which last year spent more than twice as much as Gallatin per road mile for snow removal? Will Taghkanic, which expects to spend nearly $70,000 on its new Comprehensive Plan, wind up with a better document than Gallatin’s, which should come in under $20,000? These qualitative questions are best posed by citizens directly to their elected officials. Our numbers, hopefully, can give them a starting point for discussion.
Taghkanic, with a population of about 1,100, raised more than twice as much in town property taxes this year as Gallatin, with its 1,400 people, or nearly three times as many dollars per resident ($518 vs. $185, excluding fire protection).
“Every one of my departments is very, very good about spending money,” said Gallatin Supervisor Lynda Scheer, who has directed the town’s finances for the last four years.
“We have a lot of part-time residents,” Taghkanic’s supervisor, Elizabeth Young said, citing the large number of second-home owners in her town as an unusually heavy burden on the budget she has overseen for the past two decades. U.S. Census figures from 2000, however, indicate that 23% of Taghkanic’s housing units are “recreational” homes, little different from Gallatin’s 22%.
On the single largest budget item, maintenance of the towns’ roads, Gallatin’s actual expenditures last year were $10,200 per road mile; Taghkanic spent $13,100 per mile, or 28% more. One key reason is that Gallatin covers its 41 miles of roads with a highway department staff of four, including the superintendant, according to Supervisor Scheer, while Taghkanic employs seven men to service its 49-mile network, Ms. Young said-- 75% more employees to handle 20% more road mileage.
Supervisor Young suggested that Taghkanic’s per mile snow removal costs last year were twice as high as Gallatin’s because most of her town’s roads are unpaved and, therefore, more expensive to plow and maintain. Studies cited by the Cornell University Local Roads Program, however, indicate that annual maintenance costs of gravel/dirt roads are actually less than for paved roads if traffic volumes are light (less than 100 vehicles per day) and only 20-50% more expensive to maintain if volumes are higher (100-200 vehicles per day).
On non-highway cost comparisons, Gallatin also shines, spending about $291,000 in 2006, or $194 for every resident, compared to Taghkanic’s general government expenses of $320,000 or $286 per resident. Taghkanic’s costs for planning, zoning, and justice court services were notably higher than Gallatin’s.
Though neither town manages its own fire district, contracting instead with several nearby fire departments, there is a large disparity in the cost of securing outside fire protection. Gallatin taxpayers in 2007 will spend an average of $168 for each of the 913 housing units in the town identified in the 2000 U.S. Census, while Taghkanic residents will pay $244 per house on average for their fire protection. One reason is that most of the Town of Taghkanic is served by the Taghkanic Volunteer Fire Department, which offers expensive retirement benefits to its crews. Gallatin contracts primarily with other nearby departments which are less expensive.
A final area of comparison looks at the surplus cash the towns have built up over many years. Town boards estimate their expenses and revenues each year and raise property taxes to fill the expected gap. If they underestimate other revenue sources, such as their share of county sales and mortgage taxes, or if they overestimate expenses, the resulting surplus cash is retained in the town’s bank account as unspent “fund balances.”
In the case of Gallatin, which has no outstanding debt, the fund balances have accumulated to more than $1.6 million, nearly six times the 2007 town tax bill. Taghkanic’s extra cash, after deducting $150,000 in town debt, was some $280,000, less than 30% of its 2007 levy.
Gallatin’s surplus, even after reserving $500,000 for a proposed new justice court building, is large enough that its town board should consider offering rebates to property owners or slashing taxes for the next few years.
“If I can help out our residents (by cutting property taxes), I’m willing to do it,” Gallatin Supervisor Scheer said, noting that the details of how and when to give back the surplus cash can be problematic.
But it’s a problem any town would like to have.
I would like to respond to each of his points, but first I would reiterate that the purpose of the budget columns and database is “to shed light on what drives our property taxes, and what we can do to control them” by comparing financial profiles of towns which may be facing very different fiscal challenges. As I wrote in the May 29 column for The Independent, the data, provided by the Office of the State Comptroller, “may not reflect the quality of services offered by different towns.”
The fact that Hillsdale in 2005 had the second-highest tax burden per capita among the 28 towns—66% above the average-- does not necessarily mean that Mr. Baer’s administration is doing a bad job. It could be that the town is financing more expensive services—such as maintaining its high proportion of unpaved town roads—or that it is providing a higher quality of services than neighboring towns.
Whatever the causes, however, Hillsdale is a “fiscally challenged” town, where high per capita costs are shouldered primarily by property taxpayers. Meeting the fiscal challenge with management skill, financial discipline, and political accountability is what Mr. Baer and his colleagues on the town board were elected to do. I wish them the very best of luck, and I hope my work can help them in their valuable efforts.
Now to his specific criticisms of the column:
1-- Mr. Baer claims my analysis does not fairly reflect different sources of revenue among towns, specifically citing Hillsdale’s lack of receipts from speeding tickets and other fines. Many other towns do receive substantial proceeds from these fines, which are combined with other non-tax revenues and labeled as “Unclassified Revenues” by the Comptroller, a category which, in 2005, provided Hillsdale with 25% more revenue per capita than the average town in the region.
2-- The supervisor points out that Hillsdale has less commercial property and more open agricultural land than many towns, which shifts the property tax burden to existing residential taxpayers. The town’s small tax base, however, is a boon which actually reduces cost pressures and total per capita taxes, according to extensive research findings that town taxes for all homeowners rise as open land is converted to home sites. Other studies suggests that, in most cases, the costs of providing public services for commercial establishments are greater than the added tax revenues they contribute to the town coffers.
3-- Mr. Baer rightly mentions in his letter that Hillsdale declined some 30 years ago to turn over the bulk of its roads to Columbia County, saddling the town with a relatively large road network, most of which remains unpaved and, therefore, more expensive to maintain. This may indeed explain why Hillsdale’s costs per mile of highway spending are much higher than in other sparsely populated towns. But the fact remains that the costs are higher and that the town’s property taxpayers will have to continue to pay for them.
4-- Finally, Supervisor Baer takes issue with my warning that towns like Hillsdale, which are building or expanding sewage treatment systems, could “see increasing property tax levies in the future.” If Hillsdale’s financing and construction plans proceed without a glitch, the town may be able to avoid the fate of many small municipalities, which have resorted to raising property taxes to extend and upgrade their sewage treatment facilities.
The supervisor’s interest is most appreciated, and he raises an important point which we addressed in our inaugural “Budget Scorecard” column a year ago when we wrote, “We urge readers to keep in mind that, in many cases, there may be sound financial and political reasons why a town spends much more than its peers: police services in one town may be more extensive than in another, dirt roads may be more expensive to maintain than a paved network, a new town hall, though costly, may be a welcome use of tax dollars.”
We look forward to more comments on our budget research from town officials, even if they are critical.
-- Governor Eliot Spitzer speaking at Memorial Day
celebrations in Pine Plains
The Senate passed the bill, the Informed Growth Act, on a 19-16 vote Friday. The House had endorsed it two weeks earlier by a margin of 82-49. The governor has expressed his support for the measure and is expected to sign it.
In the debate leading up to the vote, Senator John Nutting (D-Androscoggin County) argued that towns needed to more closely examine the effects of large stores on the economy. Referencing research in Maine and other states, Nutting noted that locally owned businesses generate a bigger "economic multiplier" by keeping a much larger share of their revenue in the state's economy. Large retailers, on the other hand, have a "from away, go away" model. "The products are from away and the profits go away," he explained.
Senator Dana Dow (R-Lincoln County), one of three Republican Senators who voted in favor of the bill, asked "Do we want to change every rural corner into a shopping area?" He argued that the bill would give communities a tool to protect "the Maine way of life." He noted that big-box stores add little to the state's economy and instead displace existing businesses and jobs. "I don't think it's good economics," he said.
Senator Peter Mills (R-Somerset County) said the Informed Growth Act would give towns a sophisticated planning tool. He pointed to the negative effects big-box stores have had in Waterville and Skowhegan and argued that the "helter-skelter irrational paving of our towns" threatens to destroy the very qualities that draw people and investment to Maine.
Opponents argued that the measure would impede economic growth. Senator Lynn Bromley (D-Cumberland County), whose district includes the Maine Mall and dozens of big-box outlets, said that the Informed Growth Act would impose another hurdle for businesses trying to locate in Maine. Although the bill affects only retail development, she said it would create a "slippery slope" and might soon be applied to manufacturing and other sectors.
Attempts to characterize the bill as "anti-business" largely failed, however, because more than 180 small business owners from across the state strongly endorsed the measure in letters to lawmakers. Their support was referenced several times during the legislative debate. Supporters contended that the Informed Growth Act would encourage small businesses to invest and develop in Maine.
The campaign to enact the bill was led by the Maine Fair Trade Campaign, the Institute for Local Self-Reliance's New Rules Project , the Maine chapter of the Sierra Club, and Our Town Damariscotta, a citizens group that stopped a Wal-Mart project last year.
Numerous other small business, labor, environmental, and community groups provided crucial support and engaged the help of their members. Thousands of people contacted their representatives. Supportive editorials and op-eds appeared in newspapers around the state.
Opposition to the bill was led by the Maine Real Estate and Development Association, the Maine State Chamber of Commerce, and the Maine Merchants Association. The Maine Municipal Association unsuccessfully tried to amend the bill to make it optional for towns.
The Informed Growth Act stipulates that cities conduct an economic impact analysis for proposed stores larger than 75,000 square feet (roughly half the size of a typical Target or Home Depot). The analysis is performed by an independent consultant chosen by the town, but paid for by a fee charged to the developer. It evaluates the effects of the proposed store on existing businesses, jobs, wages, vacancy rates, the cost of municipal services, and the volume of "sales revenue retained and reinvested" in the community.
After the analysis is complete, the town must hold a public hearing. Residents within a certain radius of the proposed store and officials of adjacent municipalities must be given special notice of the hearing. After considering the study's findings and public testimony, the town may approve the store only if it concludes that it would not have an undue adverse impact on the community and local economy.
The Informed Growth Act adds an economic impact standard to Maine's land use statute (which already has standards for traffic, water quality, and other impacts) and thereby gives cities explicit authority to reject retail projects on the basis of economic effects.
The act ensures that, even in areas zoned for commercial development, citizens and local officials will always have an opportunity to evaluate big-box development and make informed decisions about whether to approve or reject such projects.
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We have made several enhancements to our analysis of the OSC data, designed to better rank the 28 towns in Columbia and northern Dutchess counties on the quality of their fiscal management and the likelihood they will need large property tax increases in the near future.
Our latest study ranks the towns on five key measures: 1) property taxes per capita; 2) total taxes per capita (including county sales tax receipts); 3) general government expenses per capita, which cover most services other than road maintenance and special districts for water, sewer, trash collection, etc.; 4) highway department costs per road mile; and 5) highway capital investment from 2001-2005 compared to the average for the 28 towns.
The detailed rankings are available at the “Budget Scorecard Database” on the right-hand column of the website, along with last year’s tables. We also offer consulting services to municipal officials to help them better understand and improve their own budget performance relative to their peers.
As we cautioned in last year’s “Budget Scorecard” column, the numbers compiled by the OSC are somewhat out of date—the latest cover 2005 budgets—and the financial insights they provide may not reflect the quality of services offered by different towns. The ranking tables, to which we’ve added the Town of Clinton, exclude the cost of fire protection due to complex reporting standards.
The 2005 town scorecard reveals a remarkably wide range of fiscal profiles. For example, Greenport, saddled with large property tax surcharges to upgrade its aging water and sewer systems, collected taxes of nearly $600 per resident, while the similar-sized towns of Milan and Kinderhook billed less than $150 per resident. Among smaller towns, Taghkanic and Hillsdale collected well over $500 per capita in taxes, about 60% more than the average for the 28-town sample.
The most fiscally impressive towns, judging from the OSC data, include Kinderhook, Red Hook, Claverack, Ghent and Livingston. The first four on the list have incorporated villages within their borders and receive significant subsidies from village taxpayers. We have tried to strip out the beneficial village impact on their rankings, but even after the adjustments they appear to be financially well-run towns.
One intriguing enhancement to the data may help predict the likelihood of future tax increases for road repair and maintenance, which typically absorb 65% of total town tax collections. The final ranking in the Budget Scorecard, Table 5, compares the towns’ capital spending on roads over the 2001-2005 period to identify those highway departments that may have been under-investing and, therefore, may see a sharp rise in property taxes.
The Town of Milan, for example, boasted one of the region’s lowest per capita tax burdens in 2005, and its highway department spent relatively little per mile of town road compared to nearby towns of similar size. However, Milan’s capital improvements to its road network over the previous five years were 39% below the average investments of the other towns, implying it may need to ramp up capital spending and property taxes. Conversely, Livingston Town demonstrated similar fiscal discipline in its highway operating budget in 2005 but spent 27% more than average on road investments from 2001-2005.
The towns of Greenport, Northeast and Copake showed much higher per mile spending in 2005 than comparable towns and also appear to have been under-investing in their roads over the previous five years.
Greenport’s fiscal profile is the most concerning. Not only are its tax collections nearly twice the average, but its relative under-investment in road works suggests it may be facing further tax pressures. One main reason for the very high current taxes is that the town has been assessing property owners for funds to upgrade and expand its water and sewer systems. Facing a $9 million improvement of its sewage treatment plant and costly expansion of commercial development on Route 9, Greenport is not likely to see tax pressures abate anytime soon.
Hillsdale, another high-tax town which is planning a major sewage investment, could also see increasing property tax levies in the future.
We will be expanding our analysis to highlight which towns have seen the largest and smallest increases in property taxes from 2004 until 2007, a revealing measure of fiscal stewardship. In addition, future columns will try to analyze in more detail why certain towns score well in our rankings and others do not.
Last year’s columns and tables comparing villages and counties in the region are also available on the website, and we will update them with more recent OSC data in the coming months. We welcome your questions and comments.