Selectboard Chair Elaine Haney has touted that taxpayers saved $3.4 mil between FYE2014 and FYE2022 from the consolidations of services between the TOV and the Village. She explained all of this in detail during the March 1st, 2021 Annual Town Meeting. You can watch it here.
The No Merger Now PAC falsley claims that “The Town, actually, saved nothing. Its tax rate held steady. The Village, on the other hand, saved more than $3 million dollars, as their tax rate data show, to the tune of more than $500,000 per year for 7 years.” (Link here or backup of website here in case you can’t reach the site.)
The No Merger Now PAC’s claims are blatantly misleading and make basic math errors.
The truth is that the Village did not save $3 mil. As part of consolidation efforts, both the Village and TOV received tax rate reductions for taxes each of them separately pay. The revenue lost by those reductions was regained in the Essex Town General Fund such that every Essex resident would pay their fair share of the consolidated services. Both the Village and the TOV’s tax rates rose, though at a slower (and lower) rate than pre-consolidation. This is a demonstration that consolidation works.
The anti-merge PAC excluded taxes that the Village pays from their analysis to make it look like the Village received a large tax benefit. You can’t pick and choose which taxes you pay, so why would you keep certain taxes out of your analysis other than to mislead?
The Bad Math Argument
Here is the problem. The graph on the left is a graph of the anti-merger PAC’s data above and shows a large tax decrease for the Village in 2016. The problem is that it also does not include all the taxes Village residents pay.
The graphic excludes the Essex Town Capital, Essex Town General Fund, and Local Agreement Rate taxes. These are taxes paid by every Essex resident. You can verify these taxes exist on the Essex Tax Rates webpage.
When these two additional taxes are included, you will see the Village did not get a tax break.
Village Tax Rates – What Really Happened
You may then wonder why the Village’s “Municipal Tax Rate” dropped so much in FYE2016. To understand the decrease, you need to know that in FYE2016, there were numerous service consolidations including
- Highway and Streets
- Stormwater Permitting and Management
- Finance and Administration Service Director
This is apparent in the way tax rates moved from TOV and Village specific taxes into the Essex Town General Fund. You may reference all tax rates from the Essex Tax Rates webpage.
Let’s start by looking at the TOV taxes in FYE2015 and FYE2016.
FYE2016 was the first of a three-year commitment to combine Highway and Street budgets between the TOV and Village (page 5 – FY2017 Financial Statements). Unlike the Village, the TOV pays a special tax known as the “Essex Town Highway” tax. This tax was reduced from .0800% in FY2015 to .0218% in FY2016 as highlighted in the yellow boxes in the TOV tax rate image shown below. The reduction is a total of .0582%.
A portion of this reduction was moved to the Essex Town General Fund tax, a tax every resident of Essex pays. It would make sense that if the Village and TOV combined their Highway and Street budgets that this highway tax would be spread across every Essex resident. This increase is represented in the orange boxes below and is .0626%, higher than the typical .01% to .02% increase shown in other years for the Essex Town General Fund.
Below is a similar chart of the Village tax rates. Please, click on it to see it in full size.
The “Village Only Taxes” are highlighted in gold in the image above. The FYE2015 to FYE2016 tax decrease they cite as a smoking gun is highlighted in orange. The bright yellow boxes indicate that this tax rate reduction gave the Village a year over year tax rate decrease of 13.1877% in FYE2016. This is why such a large tax rate drop is shown in their version of the Village tax change graph. Again, the anti-merger No Merger Now graph is misleading and wrong.
You’ll remember the anti-merger PAC did not include the Essex Town Capital, Essex Town General Fund, or Local Agreement Rate tax in their graph. These taxes are paid by the Village, but conveniently not shared with you in the graph. The Essex Town General Fund increased the year over year tax rate in FYE2016 by 15.5677% for the Village. This is shown in green above.
The Village did get a 13.3% drop in their Essex Junction Village tax, but a 15.5677% increase in their Essex Town General Fund. The Village taxes ultimately went up, not down as the No Merger Now PAC claims.
When we graph all the taxes Village residents pay, you’ll notice there is no tax decrease for the Village in FYE2016. The tax decrease was balanced with a tax increase in the Essex Town General Fund tax. Again, this was due to consolidation. The TOV and Village both experienced tax increases.
It’s also interesting to note that the TOV’s tax rate increase was 0.95% in FYE2016. This is the lowest tax rate increase for the TOV from 2009, when tax information is readily available, until now. It is a key indicator that consolidation does work and that the Selectboard is making real strides in managing taxes for the residents it serves.
The correct graph is immediately below. The anti-merger PAC graph is below that.
Above: Correct Village Tax Rates showing no large tax rate decrease in FYE2016. This graph includes all the taxes the Village pays.
Above: The No Merger Now PAC Village Tax Rate graph leaves out some taxes the Village pays in order to mislead.