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Fiscally sound?



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August 17, 2011 - Dear Editor,

(In response to, 'Village taxes lowest in county,' The Citizen, Aug. 13, page 1):

The data and comments as presented are misleading.

The comment by Councilman Saroli that "Haiser's report reflects villages about the same size as Goodrich" is inaccurate and incorrect.

The operating millage of the various villages compared in the article is impacted by a number of factors. Mill rates were compared for Otisville, Gaines, Otter Lake, and Lennon.

The respective populations of the villages are: Goodrich: 1,594, Otisville: 872, Gaines: 374, Otter Lake: 407, and Lennon: 485. Clearly, they are not "about the same size" as Saroli contends.

One needs to look behind the millage rates for the full story. The main factors affecting the millage rates are population levels, the value of the parcels being taxed (tax base), and the level of service provided.

Since newer houses are usually more highly valued than older houses, new developments and subdivisions would add to the tax base. None of the villages compared to Goodrich had any recent development in the last, say, 25 years. All the houses (parcels) contributing to the smaller villages tax base are older and of lower assessed value and SEV(state equalized value). Most of these houses were likely built in the period from 1920-1960. This has a significant impact on millage rate to generate a given amount of tax revenue to meet an operating budget.

For example:

With a 10 mill tax rate on a $200,000 house ($100,000. SEV) you get a tax yield of $1000.

This same 10 mills on an $80,000. house ($40,000. SEV) yields only $400.

Clearly, communities with little or no recent development will have a lower tax base due to lower valued houses and therefore require a much higher millage to generate adequate tax revenues to support their services.

Also, the level of services drives the manpower requirements and this is reflected in staffing costs (salary / wages and benefits). None of the villages compared has a village manager.

All villages have some DPW support. This varies from one to three people. Gaines and Otisville both provide police services. For simplicity, I have reduced manpower used to full-time equivalents with each part-time person counted as one half of a full-time person.

This transformation gives the following results for total staff:

Otisville: 6, Gaines: 5.5, Otter Lake: 3, Lennon: 1.5, Goodrich: 6.

Lastly, I am confused as to how Goodrich could be "fiscally sound" before the last election, according to Mr. Haiser, and now just in just a week and a half after the election the rainy day fund is depleted and we need to raise taxes, according to councilman Saroli. You can see how any tax increase would hit the newer subdivisions harder than the older parts of the village. This works well until you run out of other people's money. I believe that thrift is a better approach. We should consolidate services and hold employees accountable. Don't spend all the tax revenue, keep taxes low, and create a favorable climate for business and residential development.

Don Emch, Goodrich resident

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