We’ve recently received inquiries about why the tax rate in Poestenkill increased 5.63% when the District’s Budget Newsletter indicated the tax increase was going to be 2.58%. Similar questions have been asked in prior years by residents from other towns within the District. To answer this question, it’s important to understand that the estimated tax increase published in the newsletter is the year-to-year percentage increase in the overall tax levy, rather than the tax rate increase in any particular town within the District. The 2020-21 tax levy is $32,481,774, a $816,805 increase over the $31,664,969 2019-20 tax levy, a 2.58% increase.
To determine individual tax rates for the nine towns that are within the District’s boundaries, the $32,481,774 tax levy is apportioned (allocated) to each town. The apportionment process is calculated annually to determine the tax levy proportion each town is allocated. Each town’s allocation can change based on changes in assessed values, but the allocation is most impacted by changes in the Equalization Rate that is assigned to each town by New York State.
Equalization is necessary because in New York not all municipalities assess at the same percentage of full market value, consequently town assessed values cannot be used to proportionally allocate the tax levy. To equitably allocate the individual proportional tax levy share for each town, the town’s total assessed value is divided by its equalization rate to determine the town’s full value assessment. Once each town’s full value is determined, a fair apportionment using full values can be calculated to determine each town’s tax levy proportion.
Changes in equalization rates can significantly shift each town’s tax levy allocation from year-to-year which in turn impacts individual town tax rate changes. Often times equalization rate changes create wide variations in town tax rate changes as compared to the change in total tax levy, as was experienced this year in Poestenkill. For example, the total 2020-21 tax levy increased 2.58%, but town tax rate changes ranged from a .70% decrease in Nassau, to the 5.36% increase in Poestenkill. In Sand Lake, the District’s largest town, the tax rate increased just .60%. Similarly, the District’s 2.94% tax levy increase in 2017-18, resulted town tax rate increases that ranged from a low of 1.70% in Poestenkill, up to a high of 5.48%.
Equalization rates and final assessed values are not set until after the District presents the budget and associated tax levy to the community for approval each May. Therefore, we are unfortunately unable to provide the tax rate change on an individual town basis when the budget newsletter is published. We hope this information helps you understand the tax rate setting process and why your town’s tax rate may differ from the total tax levy percentage change.
To view the District’s 2020-21 tax rate calculation and historical tax rates by town in the District, please visit: https://www.www.averillpark.k12.ny.us/https://www.averillpark.k12.ny.us/wp-content/uploads/2020/09/Averill_Park_Tax_Rate_2020-21.pdf
To learn more about Equalization Rates please visit: https://www.tax.ny.gov/pit/property/learn/eqrates.htm