I’m Noticing a Trend 

Tomorrow morning I’m hosting a coffee for an old Bedford friend who has (smartly) decided not to take the New York tax load anymore. She and her husband are saying Goodbye Suckers… 

And moving to Florida.  

This comes as no shock or surprise to me. They are doing what so many others want to do. Get out of New York Tax jail. Catherine is going. These friends who I’m hosting tomorrow are leaving. Others I know are just waiting to sell their home and go too.

To add flame to the fire, the Bedford Central School District board has determined they can not live within our means and voted to go above and beyond what new York has in place for residents, called a tax cap. The article is a bit long but worth the read:

BEDFORD, N.Y. — By a margin of just 4-3, Bedford Central’s school board voted on Wednesday to adopt a proposed 2016-17 budget, which paves the way for it to be decided on in a referendum next month.

The proposed budget, which totals $129,654,885, calls for overriding the state-mandating tax-levy cap. The proposed levy increase is by 3.82 percent, or $4.34 million. A budget complying with the cap would have only allowed for an increase of up to $1.49 million.

Voting in favor of adoption were board President Jennifer Gerken, Vice President Ed Reder, board member Andrew Bracco and board member Suzanne Grant. Voting against adoption were board members Michael Solomon, Colette Dow and Brian Sheerin.

“It is time now for everybody on this board to come together,” Gerken said after the vote. “This is the budget that we are putting forth.”

Unlike a cap-compliant budget, a proposed budget with an override requires a super-majority of more than 60 percent for passage. If the budget fails, the board can schedule a second vote for June, either with the same proposal or a new one. If the second vote is unsuccessful, then the district will be legally required to adopt a contingency budget, which would freeze the levy to its current amount and require $4,345,411 in additional cuts.

The proposed budget is the first with a tax-cap override since the cap was enacted in 2011. The decision to override the cap came as part of an effort to close an $8.8 million funding gap, which was caused by large cost overruns in health insurance and special education.The increase in the levy is coupled with several cost-cutting measures, including a reduction of more than 20 positions and a switch in health-insurance plan administrators; the latter will save $1.5 million.

Earlier measures eyed for cutting, including all modified-level sports and multiple librarian jobs, proved to be controversial and have been removed from consideration.

Under the budget, projected tax rates, which measure what taxpayers will owe per $1,000 of assessed value, will rise by 2.64 percent in Bedford, 4.18 percent in Mount Kisco, 3.28 percent in Pound Ridge, 8.13 in New Castle and 6.56 percent in North Castle. Tax rates, which are not capped and cannot be manually changed by the board, are different due to discrepancies in how the five towns assess their properties. The rates are the byproduct of a state-mandated conversion formula.

Board members have spent the past several weeks diving into financial minutiae, searching for items to cut that would be the least painful. The split vote signaled that there would be no consensus on a a precise list of items to reach the fiscal chopping block. During that time, tense crosstalk among board members had been common, with raised voices abounding.

Even at Wednesday’s meeting, board members spent time tweaking the budget. The only measure that drew consensus, despite the split final vote, involved not cutting a three full-time equivalent positions at Fox Lane High School.

Solomon argued that the proposed budget is not sustainable, as he claimed it will just lead board members to repeating the same process in the future. In contrast, Solomon suggested looking for deeper cost cutting, including more jobs, upfront as a way to head off annual compounding in expenses.

Solomon has often disagreed with colleagues – several times, amidst tense crosstalk – over the budgetary process and direction.

Gerken, in contrast, noted that the board’s control over its year-to-year expenses is limited, citing benefits and pensions as examples that either can’t be readily changed or can’t at all. What the board can control and cut, Gerken explained, are programs, even though those are not the cost drivers.

Sheerin, meanwhile, argued that the administration did not adequately break out costs for certain programs, such as for ESOL, which is used to assist children learning English as a second language, along with the cost-benefit of taking in non-district children in exchange for tuition.

The budget is scheduled for a public vote on Tuesday, May 17. Polls are open from 7 a.m. to 9 p.m. Polling places correspond to elementary school attendance zones.

This is the key paragraph.

Under the budget, projected tax rates, which measure what taxpayers will owe per $1,000 of assessed value, will rise by 2.64 percent in Bedford, 4.18 percent in Mount Kisco, 3.28 percent in Pound Ridge, 8.13 in New Castle and 6.56 percent in North Castle. Tax rates, which are not capped and cannot be manually changed by the board, are different due to discrepancies in how the five towns assess their properties. The rates are the byproduct of a state-mandated conversion formula.

There you have it in a nutshell. The school portion of our property taxes are determined by a stated-mandated conversion formula that screws us all. Cuomo can lay claim to saying he’s keeping property taxes low, but notice he’s NOT bragging about keeping the school taxes low. He can’t do a thing. each school district can manually change the tax rates. Bedford Central is not unique in New York serving more than one town. many schools are regional but Bedford serves more than most I bet.

Whether the school taxes go up 2.64 percent or 8.13 percent, it’s a crime against home ownership. I’m sick and tired of being the bank for the school district that, in my mind, constantly overpays its administration and underpays good teachers. There are a million programs that are pork but Johnny needs his this and that and Johnny’s mom says the school district must have it, so they cave and Johnny gets what he needs, even if Johnny is the ONLY ONE who needs it. NB: the article refers to the $8million gap because of special education needs and health insurance costs. Gee, what a surprise. NOT. Huge school buses go by me with two kids on them but god help the district if they combine route such that Johnny is on the bus too long. Horrors.

I plan to be the first one at the voting poll. I will vote NO, ten times if I can. As it is I already pay $6000 MORE (that’s MORE) for the school portion of my tax bill than I do for the actual value of my home and property. That’s insane.

Tomorrow’s coffee klatch will be a mixed bag of emotions. Saying goodbye to a dear friend. Sadness for me, happiness for them. There will also be tears, mine, that I’m such a stoop for not already being in Florida. I need my head examined. And a good realtor.

From Catherine:
As seen in Bedford – a Greenwich Cayenne with Maine plates. Someone else got smart. 🙂  

12 thoughts on “I’m Noticing a Trend 

  1. Come on down. The water’s great.

    PS There is a one-time per auto tag $275 Welcome To Florida fee. And an annual “intangibles” tax on stocks and bonds. But there is also a homesteader’s deep discount on property tax. And schools? We barely fund them.

    Florida is already #3 in State’s population head count, with millions of the post-WWII generation boomers looking to move in.

    1. Oh believe me, I want to so badly I can taste the salt water. I do need to be near my mother though – hence why I haven’t moved yet. I can’t be a plane ride away now. Save me a seat later, okay?

    2. Wasn’t the intangibles tax repealed?

      We are planning to relocate (eventually) to our little sliver of paradise in Key Largo, but can’t quite pull the trigger. It feels a little early–we are late 40’s with young kids, a little remote and we get concerned if the choice is ego driven. Real estate prices are very high there, and there is the fear factor of the tropical climate (bugs, hurricanes, flood plains–lack of knowledge causing fear of jumping). And, then there is the keys disease if we ever need any work done…

      EOS, makes me nuts to pay RE taxes for schools, and ours are much lowere on Greenwich. I think our school district spends $19k per student annually. In the homeschool we spend maybe $2k per student and I consider myself rather frivolous with education spending. Many only spend a couple hundred. I get the need for overhead (salaries, buildings, maintenance, etc), but you are right. Spend more on the teachers and less on administration.

      1. It’s never an easy decision to pull the trigger to move and it’s rarely just one factor that is considered for the move. For me, it IS pretty singular now why I am not already in Florida- I don’t want to be far away from my mother. I love running down to Delaware for no reason and I’m not willing to cut those ties for the sake of taxes, even really egregious ones. Catherine might chime in for how they decided to pull the trigger – they are a bit older than you guys, but not by much.

        Florida (and North Carolina and Wyoming) could repeal ten taxes there and never be anywhere near close to what we New Yorkers pay.

        I have no understanding how cost per pupil could be so much – none, other than the teachers union demands so much be paid as part of their salaries and the Superintendent makes a half million a year by the time you factor in his lifetime benefits package. Schools need to take lessons from the homeschool parents like you who do mange to teach incredible curriculum, have engaged children, and do it for a song. Kudos. You have my complete admiration for your talent and devotion.

      2. Martha, our move was agonizing for me. My husband said it was the easiest decision he’s ever made. He was fed up with the high costs here – private school, taxes and commuting into the city for work, he pretty much put his foot down and said we are going. It’s not that I didn’t have a say but I did want to make sure we were leaving for the right reasons and with a plan for the children – not just to leave for leaving sake. Once the children (15 and 12) got excited, it was easier for me to agree that John’s idea was the right one.

        We are already mentally Wyomans (Wyomingites?). The Bedford house is 90% empty and things shipped out. I can’t even imagine absorbing another school tax increase or going though a vote that will end up passing. Martha, I can understand your concerns while your children are little but Key Largo has an incredible infrastructure of year round residents who are there for all the same reasons you said – they want that little sliver of paradise. Go for it.

        EOS, your time will come one day too to get out of dodge. I appreciate your desire to stay close to your mom. She’s incredible.

  2. I’ll echo Sir Earth Image. Come on down. Miami is a mixed bag culturally and socio-economically. we love the ability to live in a smaller home than we did up north yet not feel we gave up a lot to do this. Our children are counting more dollars in their inheritance (such that it is) by us moving to Florida and they never turn down the opportunity to visit.

    PS: I think you meant to say: adding fuel to the flame. 🙂

  3. Yes Martha-
    My bad memory of the intangibles tax.

    Here’s the scoop:
    Though it had an illustrious history dating back to the 1930s, the so-called Florida intangible personal property tax was gradually diminished since 1999 until it was finally rescinded in 2007. Called a “wealth tax,” because it mostly affected the well-to-do who held certain types of assets, the intangible tax was one of the ways that Florida, which does not tax personal income, raised revenues for state programs. While the tax, or its repeal, for that matter, did not affect most Florida residents, because they were never required to pay it, its legacy can still be felt in some quarters.

    The Law Governing Intangible Property Tax
    Ethereal though it may sound, intangible personal property, as deemed by Florida Statutes Chapter 199, refers to those assets that do not have physical attributes yet hold value. These include investments like stocks, bonds and mutual funds. They do not include certificates of deposit, cash or personal retirement funds. When the law was effective, businesses and individuals had to pay a certain percentage annually: For non-bank businesses, that meant paying $2,000 in intangible tax for every $1 million of taxable income; for individuals, the first $20,000 was exempt, and above that — up to $100,000 — $1 was incurred out of every $1,000 in assets. Above $100,000, $2 per $1,000 was collected.

    Repeal of the Law
    In 2007, Chapter Law 2006-312, Laws of Florida, called for the repeal of the intangible personal property tax in Florida. Aside from a few exceptions for which the law would remain in effect, single and joint filers, as well as corporate entities, were no longer required to submit these taxes from 2007 onward. According to the Florida Center for Fiscal and Economic Policy, the lowering of the tax rate culminating in the repeal of this tax resulted in a cumulative loss of $7.3 billion in tax revenue to the state.

    Remnants of the Law
    Despite the repeal, the intangible tax still rears its head in certain instances. Those who lend money via mortgages or liens on real estate property must pay the nonrecurring intangible tax on those notes or debt instruments. Likewise, renters must pay an annual governmental leasehold intangible tax if they lease from a government organization. With regard to tax assessments before the repeal, the state is allowed to collect tax within the statute of limitations for collections. It is not allowed to pursue intangible taxes still due from the estate of a deceased party after 2009.

    Implications for Florida Taxpayers
    Those affected by this particular tax used to structure their investments to avoid or abate the intangible tax. They might buy bonds issued by the state of Florida or the federal government. Or they would place their money in Florida intangible trusts. With the repeal of the law, they no longer need to do so and need not consider intangible taxation in their tax planning.

  4. We can’t leave New York yet but we are desperately trying to downsize by selling our current home. We had one contract go awry and with the news of more taxes I don’t see more buyers looking here. The SCHOOL taxes we pay now are over $20k.
    We’re lowering our home asking price again tomorrow hoping the new lower price will balance the increase in Bedford Central taxes.

  5. Funny how different states have their different tax pitfalls and unrelated — but potentially offsetting — non-tax-related positives. You have to do your due diligence and determine which flavor of cod liver oil (polite descriptive) you can bear.

    We moved to LR from metro NY in the late 90s, and here’s what we found. Yeah, I’ll keep it short, I know no readers are in a big hurry to move here.
    . Property tax rates, which include school millage: very reasonable.
    . Retail sales taxes: quite shocking, at Noo Yawk levels. 9% + additional fractions–depending on county and municipal variables– up to 9 3/4%. And that’s not including countless additonal special vigs on certain things.
    . State income tax: starts at 7%. That’s New York-ish, right? Anyway, ouch.
    . State taxes on trust income and cap gains: mysteriously low, as far as I can tell. Methinks we have the Walton, Stephens, Murphy and Tyson families to thank for that.
    . Public school system: tragically bad (I’m not being snarky, it’s true).
    . Private school tuition: UNBELIEVABLY cheap, including the (few) good ones. Exhibit A: Our son. Annual tuition never exceeded 12k. All AP stuff available. His class of 43 students included acceptances at Air Force Academy, Naval Academy, Northwestern, Columbia, UVA, W & L, Georgia Tech, and (obviously) other good schools that are not necessarily on the “this is a big deal” national radar.

    EOS, I hope you have the the time while visiting your mother’s home state to enjoy the tax-free shopping!

    1. Whoa – that’s such an excellent analysis LRR – free rides don’t exist anymore – if its not income tax its luxury or property tax etc. States aren’t stupid.
      I stopped dead in my tracks drooling over your low Private school tuition bills. I think the first pre-pre school tuition we shelled out in the city way back when was over $12. By the time the kids went to boarding school, it was $35-37 per. Ouch. I don’t know the circumstances of your move to LR, and without sounding sexist, I assume it was related to your husband’s job – an opportunity he couldn’t refuse? What a lucky opportunity I’d say – for all the wonderful benefits you’ve outlined about LR to us readers over the years, it sounds like the move was perfect in every way.

      1. It’s kinda weird here in the sense that a lot of people who can and will cheerfully pull $10k out of their back pocket for something totally unimportant that catches their fancy — a beautiful shotgun at a Ducks Unlimited auction, two weeks at a big beach vacation rental house, a fancy-pants watch, a private plane charter, a new four-wheeler — get all shocked and dismayed at the idea of paying that same $ amount for a year’s tuition at a private day school. It’s a cultural thing, or a frame of reference thing. IMO, it’s prevalent enough that it keeps private schools from raising tuition rates as much as they probably need to. But I ain’t complaining.

        Explaining the reasons we moved here would be lengthy and not very interesting. You’re right about the husband angle, but it was not a corporate relo thing. He was post-Wall Street self-employed, we had good friends here, we were 4,000% ready to leave ***insert expensive metro NYC zip code here***, and the stars aligned, so to speak.

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