I have heard several people suggest that the Larchmont tax exemption request is no big deal because it amounts to “only” $38,000 each year. To them I ask, do you want to give $38,000 every year to Larchmont? How about Rye, or Scarsdale, or Pelham? And if so, why?
It is a trick to compare the $38,000 against a budget of $230 million in order to “prove” that is such a small number as to not matter at all. But it matters enormously.
Every year many New Rochelle residents go to City Hall to contest their property taxes, arguing that their homes are overvalued. And in many cases, their assessments are lowered and they owe New Rochelle less in taxes. But that does not mean that New Rochelle receives less tax revenue. It means the tax burden is then reapportioned among the other residents.
Imagine a town of two people, Mr. Newman and myself. We each pay $500 per year in property taxes to the Town of Galt. I notice that Mr. Newman has put an addition on his house and also given it a fresh coat of paint. It looks a lot nicer than mine, which I have let decay over the years. So I go to Town Hall to complain that my taxes should not be the same as his, when his home is clearly worth more than mine. My wish is granted and my taxes are lowered by 10%, to $450 per year.
If nothing changes, the Town of Galt is now due to receive only $950 from the two of us: Mr. Newman’s $500 and my $450. To get back to the $1,000 of taxes it is owed, Galt raises everyone’s taxes by 5.3%, leaving me paying $474 and Mr. Newman paying $527.
This shuffling of dollars goes on every year in New Rochelle. Over the past five years, tax reduction requests have reduced the base value of residential and commercial properties in the City by 10%. At the same time, the tax revenue required by the School District has risen by 12%. If you were not one of the lucky few to get your tax rate lowered, then your school taxes are up a whopping 24%. Some of the cost of funding the school has shifted from your neighbors onto yourself.
If we grant the exemption to Larchmont, the $38,000 of taxes will be split up among the rest of us. With school tax revenue likely to increase 2% annually and property values continuing to fall, the current value of those Larchmont tax payments over the next thirty years exceeds $1 million.
Seen in this light, the tax exemption amounts to a transfer of wealth from New Rochelle residents to Larchmont residents. Why would we do that and receive nothing in return?
As noted in the petition about this issue, Larchmont will be able to use this tax break to help Larchmont residents at the expense of New Rochelle residents. We will pay higher taxes so they can pay lower taxes. Or perhaps the government of Larchmont Village will use these savings to spruce up Manor Beach, which we may not use.
It is incumbent upon us to be heard on this issue so the Board members understand that in these tough economic times we must protect every single dollar at stake. Please sign the petition asking the Board of Education NOT to grant a tax exemption to the Village of Larchmont.