The Important Statistic the City of Amsterdam Chooses to Ignore at its Great Peril
Here it is (from the Recorder, $40M loss of assessed value means hike in GASD taxes):
The biggest issue, though, is the significant reduction in taxable assessed value across the district. It’s mostly in the city of Amsterdam, which saw a $41 million drop in taxable assessed value.
“I’ve been involved in taxes a long time, and this is the first time I’ve ever seen this,” Brumley said. “The town of Amsterdam is almost catching the city as far as assessed value, so the town is growing quicker than the city.”
What this tells us , in no uncertain terms, is that the city’s asset base — its residential and commercial buildings — are either declining in value or being removed from the asset base.
So when year after year, just like this year, you see our local leaders budgeting another $500K for demolition while offering not a single penny for growth and economic development, you see that we are not even remotely addressing the issue — we’re actually putting policies in place to make it worse.
Furthermore, the town’s growth in assessed value has largely come at the city’s expense as the city has provided the very infrastructure — water and sewer– to enable the development in the town. As I’ve argued previously, the city has made a Faustian bargain with the town — by applying the city’s tax cap to the town, it promotes aggressive development and asset value growth in the town while forestalling and even killing any growth within the city. Compounding this even more is the utter resistance and relaucatance for the city itself to adopt more growth oriented policies.
If you look at our city’s books, you will note that the city has bonded to pay for demolition. In other words, we assume debt to pay for lowering our asset values without any investment or policies to promote growth. This is disastrous. And totally devoid of sound financial management. That is why taxpayers today are still paying for demolition of buildings that occurred several years ago. Think about it: you are paying for something that does not even exist.
Guess what happens when you lower the total assessed values on properties in the city: you are raising the effective tax rate. And when you raise the effective tax rate, you further depress home prices and you put further pressure on cutting quality of life as you cannot raise tax rates above the tax cap. That leaves you with cuts as the only option when you have negative asset growth. And this will be true of the school budget and the county budget as well.
I cannot comprehend how this state of affairs is accepted and allowed to continue. City residents appear to relish the sideshows and freakshows on financials while wholly oblivious that the center tent is collapsing onto itself.