Do Town Taxpayers Pay a Fair Share of Taxes?

A report published annually by the state Department of Revenue (DOR) entitled Town, Village and City Taxes offers an answer. It includes a wealth of information about property taxes levied by each taxing jurisdiction in the state (including all towns, villages, cities, counties, K-12 school districts and others).  The following tables are based on data from that report.

Property Rich: Towns represent 30% of the total state population, yet we have 38% of taxable property value. We also pay nearly 42% of county property taxes and 37% of school taxes. High property values result in high tax apportionments, but it’s important to remember that they also translate into low tax rates. In spite of paying a bigger than average share of school and county taxes, the net (after tax credit) town tax rate is only $14.21 per $1,000 of full value, compared to $19.70 per $1,000 in cities. Property values have soared in towns and tax rates have consequently fallen rapidly, from a high water mark of $26.15 per $1,000 in 1992.

Per Capita Comparisons: Table Two offers a per capita perspective on the distribution of school and county taxes. The key to understanding tax apportionment patterns is the per capita full value figure shown at the top of the table: nearly $105,000 in towns vs. less than $70,000 in cities (i.e., 50% higher in towns). Because school and county tax apportionments are based on each municipality’s share of the tax base, this tax wealth differential pulls a relatively large portion of these levies to towns. Note, for example, that towns pay $827 per capita for K-12 schools, compared to $573 per capita in cities. This differential is partially offset by State Property Tax Credits, which are relatively high for towns when compared to cities ($129 vs. $90). The distribution formula is based on each municipality's share of statewide K-12 school levies for the three preceding years and, as we have seen, school taxes tend to be high in towns.

Table Two: 2007 Per Capita Property Tax Payment Data
	Towns	Villages	Cities
Per Cap Full Value	$104,829	$90,888	$69,915
Per Cap Tax Credit	129	116	90
Per Cap K-12 Tax	827	742	573
Per Cap Tech Col Tax	144	121	99
Per Cap County Tax	428	306	241
Per Cap Local Tax	195	426	457
Per Cap Other Tax	25	122	97
Per Cap Total Tax	$1,619	$1,716	$1,468

County Tax Apportionment: The county data are of particular interest because towns are sometimes characterized as receiving a disproportionate share of county services (e.g., “towns rely on counties for law enforcement services whereas cities and villages have their own police departments”). Whether these claims are true or not, the objective fact is that town residents pay a disproportionate share of the county tax levy when measured on a per capita basis ($428 in towns vs. $241 in cities).

The Bottom Line: Total 2007 property tax collections amounted to $1,619 per capita in towns, 10% above the $1,468 per capita collected in cities. It’s important to note that towns carry this relatively high property tax burden in spite of the fact that own-purpose (local) tax levies were only $195 per capita in towns – less than half the $457 per capita levied in cities. This may be worth mentioning the next time someone says towns don’t pay a fair share of the property tax burden.

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