| Author | Message | ||
     doublea Citizen Username: Doublea Post Number: 122 Registered: 3-2003 |
Thanks Dave. I'm going to take Woodstock up on his offer. I'm somewhat copy and paste challenged (but I do understand numbers, I think). | ||
| doublea Citizen Username: Doublea Post Number: 123 Registered: 3-2003 |
SCHOOL TAXES Before Development: Assessed value of S.O. $440 million Assessed value of Maplewood $ 560 million Total 1,000 million S.O's share of school budget = 440/1,000= 44% x $80 million = $35.2 million AFTER DEVELOPMENT(of $25 million) If a non-PILOT: Assessed value of S.O. $440 million + $25 million = $465 million Total assessed value of S.O. and Maplewood= $1025 million S.O's share of school budget = 465/1,025= 45.36% 45.36% x $80 million = $36.28 million Difference in S.O's total share of school budget if development not a PILOT = $36.28 million - 35.2 million = $1.08 million Amount of S.O's share of school budget paid by new development if not a PILOT: 25million/465million = 5.37% 5.37% x $36.28 million = $1.948 million S.O's share of school budget increases by $1.08 million because assessed value of development included in S.O's base if not a PILOT. But development's share of school taxes is $1.948 million. Thus, S.O. taxpayer's are better off having the development not be a PILOT by an amount equal to $1.948 million minus 1.088 million or $860 thousand. MUNICIPAL TAXES PILOT agrees to pay $500 thousand instead of $342 thousand it would have paid had it not been a PILOT. Thus the municipal tax benefit to S.O. taxpayers is $500 thousand minus $342 thousand or $158,000 But the municipal tax benefit of $158,000 is offset by the $860 thousand school tax detriment, resulting in a net loss to S.O. taxpayers of $702,000. COUNTY TAXES The above numbers do not include any effect of county taxes. The same format as school taxes would be used. using total county assessed values and county budget instead of school budget | ||
| jimmurphy Citizen Username: Jimmurphy Post Number: 125 Registered: 5-2001 |
I believe I follow the above example, but do we really believe that the value of Gaslight Commons comes even close to 5.37% of the value of the ALL of the properties in South Orange? I understand that we need to make some assumptions in exercises like these, but is this a valid one? If not, changing this one assumption would have a dramatic effect on the result of the calculation - no? Jim | ||
| doublea Citizen Username: Doublea Post Number: 125 Registered: 3-2003 |
Jim: I think you're right about the value of Gaslight Commons. In another thread I suggested that if Gaslight Commons were not piloted, its assessed value would probably be based on its business or rental value rather than construction cost. I really started this exercise to illustrate the method for demonstrating any cost/benefit to S.O. taxpayers. If another assessed value is used, perhaps the 5.37% would change, but of course so would the amount added to the S.O. total, thereby changing (up or down) S.O's allocated share of the school budget. I do think this example is pretty instructive, and certainly would welcome any other comments, both posivive and negative. Maybe we can all learn something. I think this understanding is critical before any future PILOTs are discussed, both for those who are pro-PILOT as well as for those who might be anti-PILOT. | ||
| jimmurphy Citizen Username: Jimmurphy Post Number: 126 Registered: 5-2001 |
Doublea: I agree - better understanding would be great! I wonder if the town has a theoretical assessment value for the complex available... A quick check of the per-unit school tax based upon your number would be $6,493.33 (based upon the $1.948M total divided by 300 units in the complex) If we add the municipal and county portions to that it would be over $10k per year in taxes per unit for a mix of one and 2 bedroom apartments - pretty steep and probably making the units unrentable. Let's keep the examples and discussion coming. I'll check back in tomorrow. Jim | ||
| doublea Citizen Username: Doublea Post Number: 128 Registered: 3-2003 |
Jim: At this point, I can't offer anything else. You're right that we need a theoretical assessment either from the village or from someone who is familiar with how to value a 200 unit rental building. I think that one way would be to capitalize the net income, but all I know are the buzz words. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 96 Registered: 3-2003 |
Will Mr. Matthews weigh in? | ||
| Edwin R. Matthews Citizen Username: Edwinrmatthews Post Number: 23 Registered: 3-2003 |
I hesitate to weigh in and risk being called condescending (did I spell it right this time). Doublea's explanation is flawed in several respects. First and foremost you really can't compare with a pilot to without a pilot because without a pilot there is no project so the comparision is to before a project to after the project. Second the numbers used are hypothetical and to some extent exaggerated in a way that distorts the concluding numbers. I am not accusing doublea of duplicity or a deliberate attempt to mislead. The problem is when you take a complicated matter and try to make it simple you sometimes create more problems than you solve. The costs for school are allocated between South Orange and Maplewood based upon equalized assessments. For school tax purposes the equalized assessments for South Orange are approximately 1.45 billion. By using 440 million in the calculation LCOR's share of the school taxes is greatly exaggertaed. (Rather than the 5.37% suggested by Doublea it would be closer to 1.8%. The $1.9 million share calculated by Doublea would be about $660,000.) This of course changes his bottom line figure considerably. The use of the $25 million assessment also is flawed becaues that is the construction cost which is used to establish the pilot payment but would not be used to establish the assessment for tax purposes. Even if one were to use the $25 million figure it would have to be equalized which using last years ratio which would make the equalized assessment about $17,310,000. If this property were on the tax roles the actual figure for school tax purpooses in its first year would be approximately $680,000. (This is about a third of the 1.9 million dollar figure used by doublea.) The actual amount of money raised for school purposes, if I recall correctly, through taxes is approximately $68 million and not the $80 million used by doublea. Using the correct figure brings the bottom line number (arrived at by doublea) down. Doublea's calculation is designed to show the impact in a hypothetical first year where the financial benefit to the taxpayers is lowest. (Indeed it can be a negative impact.) In the later years the impact is positive which is why an abatement/pilot agreement must be looked at over the length of the agreement and not the first few years. I continue to maintain the issues are extremely complicated and can't be explained succinctly in this forum. In deed I am simply trying in this post to demonstrate some of the problems with doublea's post/calculations and show why they don't accurately reflect the impact of the tax abatement/pilot agreement for one year much less over the course of the agreement. | ||
| doublea Citizen Username: Doublea Post Number: 129 Registered: 3-2003 |
Mr. Matthews: Isn't your statement that "you really can't compare with a pilot to without a pilot because without a pilot there is no project" really the essence of the issue. I know that from my viewpoint, I would have preffered a smaller project that would have been more suitable for South Orange. I know that this is a matter of personal taste, but I suspect that there are lot of other residents who feel the same way. In addition, we have been told repeatedly that we were coming out ahead financially because the project is PILOTed. If it's a case of a piloted Gaslight Commons or nothing, then you may have a case. I refuse to believe that it was a case of nothing. The village must have some theoretical assessment that it had to use to compare what the project would have paid had it not been piloted in order to arrive at the $500,000 municiapl tax to be paid by Gaslight Commons. I do think we need these numbers as other posters have suggested and certainly need the same type of analysis befor granting anymore PILOTs. Rather than using hypothetical numbers, let's use real numbers and see where we stand. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 102 Registered: 3-2003 |
"I hesitate to weigh in and risk being called condescending (did I spell it right this time)." I would congratulate you on your learning curve, but I don't want to sound condescending. "I continue to maintain the issues are extremely complicated and can't be explained succinctly in this forum." Actually, Mr. Matthews, extremely complicated issues can be explained in forums such as this--perhaps more easily, in fact, than in other kinds of public forums. Some lunatic wonks even do it on a routine basis as a perverse form of recreation. You're doing an admirable job of contending with the questions implied by Doublea's calculations. One can only hope Brian O'Leary and others will respond in comparable detail, as I'm sure there are people who are interested to see this debate play out. | ||
| J. Crohn Citizen Username: Jcrohn Post Number: 103 Registered: 3-2003 |
"I refuse to believe that it was a case of nothing." Same here. | ||
| doublea Citizen Username: Doublea Post Number: 130 Registered: 3-2003 |
Mr. Matthews: I think it is important to note that my examples were done because we have been repeatedly told that the reason the PILOT was good for South Orange was because otherwise it would be included in S.O's assessed value, thereby increasing the amount of school taxes paid by other South Orange taxpayers. I think that my examples are a very good approach to determine whether this is correct. | ||
| doublea Citizen Username: Doublea Post Number: 131 Registered: 3-2003 |
Mr. Matthews: I've gone back and found your private line to me dated May 10,2003. Your private line to me was in response to my question to Mark Rosner as to whether he would vote in favor of giving Beifus or New Market Square Pilot status. In that private line you say as follows: "The fact remains that despite the rhetoric of the campaign that South Orange taxpayers are better off with the tax abatement on the third street site than if one had not been granted. First and foremost because the property would still be another abandoned auto dealership. Secondly the taxpayers are financially better off with the pilot payment than if the property were on the tax roles and paying full taxes. (I know Brian O'Leary says to the contrary but he is wrong.)" Mr. Matthews, this private line response to me says we should compare pilot to non-pilot, does it not? That is exactly what following my examples would do, wouldn't it? | ||
| Washashore Citizen Username: Washashore Post Number: 16 Registered: 4-2003 |
To Pilot or Not, That is the question. While I am grateful to doublea, Crohn, Matthews, and O'leary who have all shed light on them and Gaslight Commons in particular, and are continuing to do so, I am concerned that there are now two new developments - the Beifus site, and the Supermarket/residential site - that are in the process of negotiations with South Orange, and these too may walk away with PILOT agreements. Mark Rosner said before the election that he would not support another PILOT in the downtown (or words to that effect). Can we get a response/commitment here, now, from Mr. Rosner, Mr. Taylor, Mr. Rosen, Mr. Calabrese, Mr. Gross, Mr. Matthews, that NO PILOTS will be granted to new developments in this town UNLESS and UNTILL a majority of the SO residents have come to understand their benefits, or lack thereof, and agreed, or not, to advance them? What say you Messrs. Rosner, Taylor, Rosen, Claabrese, Matthews, etc? We can debate the past merits or not of Gaslight Commons. Let's not let "Rome burn" on the Beifus site and Supermarket site with new PILOT agreements while we are still trying to figure out the last one. | ||
| bets Citizen Username: Bets Post Number: 318 Registered: 6-2001  |
I was told by a recently reelected trustee that PILOTs would be granted to both new developments, and that "public input" would not be allowed, as they are financial negotiations. He did not have an answer to my question of how they can PILOT single family homes (the condos in the New Market development). | ||
| vermontgolfer Citizen Username: Vermontgolfer Post Number: 27 Registered: 12-2002 |
bets, It would sure be nice if you would let us know which re-elected trustee told you that, rather than open up yet another Pandora's Box on this subject. | ||
| bets Citizen Username: Bets Post Number: 319 Registered: 6-2001 |
It was Arthur Taylor. He sat with us while we ate dinner at a local restaurant. | ||
| vermontgolfer Citizen Username: Vermontgolfer Post Number: 28 Registered: 12-2002 |
bets, Thanks, now we can address the issue head on, rather than beating around the bush. | ||
| vermontgolfer Citizen Username: Vermontgolfer Post Number: 29 Registered: 12-2002 |
Addressed to Mark Rosner: Mark, I know you're on vacation but when you get back would appreciate your input on this matter, since I know you are intimately aware of the angst the previous PILOT has caused and it would be nice to have all the facts presented so we could at the very least understand the process. | ||
| doublea Citizen Username: Doublea Post Number: 132 Registered: 3-2003 |
Vermontgolfer: Thank you for your request to Mark. I think all some of want to do is just take a good objective look at any proposals. I have a suspicion that the trustees, in good faith, accepted the premise that if a project is included in S.O's tax base for school tax purposes, it must therefore be better financially to the S.O. taxpayers if it is PILOTed, and therefore not included in S.Os tax base. It is very easy to jump to this conclusion, if you don't do the numbers. It may turn out that by using real numbers for any future projects we are better off financially with pilots, but at least we should go through the exercise. |
