The NoMergerNow site claims that there are “two fallacies that fueled this push to merge.” You can read about them on their homepage or the backup we made here. Let’s dive into the first one to understand the root of their claims and the important context they left out.
To the right is an image of the anti-merger PAC’s claim. They state that the TOV pays more than their “fair share” because the Town outside the Village (TOV) pays 59% of property taxes collected by the Town of Essex and the populations of both the TOV and Village are equal. They argue that because the populations are equal and the Town is paying more, that the TOV is paying their fair share. The problem with this statement is that property taxes are not determined by population. Property taxes are determined by the assessed value of an individual’s home.
59% of the Essex Town property tax is paid by individuals outside the Village because 59% of the assessed home values are outside the Village. Paying property taxes on the value of your property is how we all pay our fair share for services we all have equal access to.
The anti-merger’s argument highlights a failure to understand the inputs to property tax derivation or a hope that you miss their slight of hand.
For example, the Essex General Fund tax rate is 0.5067% as shown on the Town tax page. A house valued at $280k would pay $1,418.76 ($280k times 0.5067%) and a house valued at $1 mil would pay $6,057 ($1 mil times 0.5067%).
Why This is Even More Wrong
The anti-merger’s “fairness” argument is just the tip of the iceberg. There is more interesting data behind the argument and associated graph.
- The $5,599,534 paid by the Village is for taxes paid only to the Town and does not include the Village specific taxes. The Village pays more than $5.5 mil in property taxes each year.
- The taxes paid by the Village in this graph includes tax contributions of $1.3 mil for services the Village does not use. However, the Village does pay for a second set of those services in their Village-only taxes.
Before you read the below statements, it is important to know that neither the Town nor the Village are bad actors. These inequities happened many years ago (see here). They are things that we as a community have inherited and need to find a solution to. The comments below are not intended to take one side or the other on the merger issue.
If you’re a Village resident, the numbers above mean you pay $1.3 mil to subsidize Town services on top of duplicative services you pay for as part of your Village taxes.
If you’re a resident outside the Village, this means you pay less than the cost of some services to the tune of $1.3 mil. In the event the Village separates, the Town will have to recover at minimum $1.3 mil in lost tax revenue per year rather quickly. These services are not tightly intertwined with the Village, would be tough to scale down, and some of the easiest to defund by the Village should they separate (see the list later on). That likely means a significant tax increase for the TOV.
The most unfortunate part is that if the TOV paid for the services the Village doesn’t use and all else stayed the same, the TOV would pay about $9.1 mil or 67% of the Essex Town taxes to achieve tax equality. This is the core argument behind a 12-year, phased in approach to increasing TOV taxes and reducing Village taxes as a single, merged entity.
Let’s Get Nerdy
In the spirit of transparency and for individuals to make up their own minds, here is how we get to all the numbers above.
The Town of Essex General Fund Budget on page 3 outlines the two sources of revenue for the Essex Taxes, the General Tax Revenue and the Highway Tax Revenue as shown in the image below. Those numbers total $13,550,180, which is the total of $7,900,771 and $5,599,534 from the anti-merger pie graph above. The division of property taxes, as defined by the anti-merger group’s pie chart, do not appear to be in the source they cite, but are close enough to be accurate.
The Essex Town Highway Tax is paid only by those outside the Village at a rate of .0110 per the Town’s Tax Rate site. Divide $165,420 by .0110 to get a TOV’s total property tax contribution of $15,038,181.82. The General Tax Revenue line in the image above is the Essex Town General Fund Rate of .5067 also from the Town’s Tax Rate site. Divide $13,384,760 by .5067 to get the total property tax contribution for all of Essex at $26,415,551.61. Take the Town of Essex’s total tax contribution at $26 mil and subtract the TOV’s total tax contribution of $15 mil to get the Village’s total tax contribution of $11,377,369.79. You end up with information that looks like the following:
| Area | Tax Contribution to the Town | Percentage Contribution to the Town |
| Town outside Village | $15,038,181.82 | 56.93% |
| Village | $11,377,369.79 | 43.07% |
| Entire Town of Essex | $26,415,551.61 |
The percentage above land close to what the anti-merger PAC put out. I have only been able to validate the total sum of tax revenue collected in their graph. I’m not able to confirm the numbers in their pie chart they claim to be in the “Town of Essex General Fund Summary.” Let’s assume those are correct though as they fall in line with the reverse calculation above and Sarah Macy’s calculation in her presentation on separation.
Where did the $1.3 mil come from? It came from Sarah Macy’s estimates of separation costs presentation located here or here if the original is offline. The calculations are below and come from “Segment II” under Separate Functions. Separate Functions are those General Fund functions that remain mostly or entirely separate in operations and/or funding. Those include the following:
- Community Development Departments
- Fire Departments
- Essex Free (Town) and Brownell (Village) Libraries
- Operating Transfers to Capital and Capital Tax
- Recreation (General Fund portion)
- Buildings
It is worthwhile reading the details of those functions, how they are almost entirely separate, and how Village taxpayers typically pay for 42% of the Town’s function they don’t use while also paying the entire portion of their own, duplicate Village function. There’s a good article on how this mismatch came about here.
The image below is a collection of the contributions made by the TOV and Village to each area’s separate function (aka service). The functions that are provided to the Town that the Village does not use have a blue header. The functions in the Village are under an orange header. This information comes from Section II of the separation presentation.
You should take away two things from the spreadsheet below.
- The total paid by the Village for services they don’t use to the Town is $1,311,472. This is highlighted in the red box below.
- The TOV is not the villan. The Village is not the villan. This is a mess made from a long time ago that most of us have inherited. Often times numbers reveal a hard truth that can stir up a lot of emotions. It must be understood that these numbers are being shared for transparency and so that each person can interpret them as they will.
