Monday, April 16, 2018

School Budget Embarrassment….a quick thought

You might remember that in yesterday’s post, the table below appeared.  In the Budget Book published by the BSD, it appeared under the title “Benchmarking Against a Peer Cohort.”  We pointed out that we didn’t know how the other members of the cohort were chosen, but we did suggest the data was provided to suggest that Brunswick residents are tightwads, relatively speaking, since our tangible real estate wealth is exceeded only slightly by a wealthy coastal enclave of lovely estates and waterfront properties.  SAD 75, of course, consists of 4 towns, including Harpswell with all its coastal properties.

As we thought about these numbers after publishing the post, we recalled the total valuation figures we’d seen over the years, along with exemptions.  What came to mind was roughly $2 Billion in total appraised value, reduced by about $700 Million in exemptions, netting a taxable valuation in the range of $1.3 Billion.

Sure enough, we found this summary from the town in our files.


As you can see, it shows a taxable real estate total of $1.28 Billion, after deducting $782 Million in exemptions.

We’re not exactly sure how the $2 Billion plus figure used by the state for valuation in 15-16 came about, but we’ll assume it comes from a number of state specific tweaks, perhaps involving personal property and BETE numbers.  But as you can see, it grossly overstates the total Taxable Value in town, which according to budget documents in our archives, stood at $1.375 Billion in FY15-16.

Now this could be an innocent mistake.  Or, it could be a convenient difference that, as we suggested earlier, might help in heaping shame upon uninformed residents, greasing the skids for generous spending and tax increases in due consideration of our town’s wealth.

We’ve generally thought that the bulk of tax exemptions in Brunswick can be attributed primarily to Bowdoin College and two Hospital complexes.  Then add all the properties in conservation.  How the former BNAS fits into this we have no clue.  Regardless, we’re pretty sure the other members of the “benchmarking peer group” have no exemptions in the class of a college and two hospitals.

So we believe it’s entirely fair to assert that the Brunswick number should be reduced to the $1.3 billion range to be consistent with the numbers for the other cohort members.

Note that if you do so, Brunswick moves to just above the lowest in total valuation, and nearly the highest in total spending.

That, dear readers, is a difference with distinction.  As compared to the second highest in town valuation and the second highest in total school spending.  The simple fact is that 35-40% of Brunswick’s total real estate value is non-taxable, and that is a very large share.

You can try to estimate how the tax burden that would have accrued to those exempted properties ends up being shifted to the rest of us.  Not an easy calculation, of course, fraught with all sorts of policy complications. 

It’s safe to say, we’re confident, that it has a huge effect on the tax bills of each one of us.

We thought you’d like to know about this numerical “anomaly,” and its effects on the psychology of taxation.

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