The Proposed NID, by the Numbers

With, we took some time to look at some of the facts and figures presented in the preliminary draft of the proposal.

The community survey results

“Exhibit F,” in the proposal, a copy of the GEDP's “Update on Downtown Easton Neighborhood Improvement District Analysis” (sic), states, “A preliminary survey was sent to approximately 500 property owners in the potential NID district, with representatives of 142 properties providing responses. 82 % support the idea of a NID.”

However, taking a closer look at the statement, we find this indicates only 28 percent of property "representatives” responded. And, only 114 of a potential 543 (508 taxable and 35 non-public, non-taxable parcels, whose opinions are noted on the map and therefore should be accounted for), or 21 percent actually expressed support.

Further, looking at the “Downtown Easton NID Survey Map” prepared by New City America East, as many as 19 of those parcels appear to be owned by Lafayette College, who would be exempt from the assessed fees. All the properties north of Route 22 are listed as being “supportive,” suggesting that either Lafayette College filled out a survey for each and every parcel, or they were automatically counted as supportive for each plot they own.

On the other hand, other property owners with multiple, taxable properties who registered an opinion are not necessarily counted each time for each of their parcels on the NCAE map.

Several other tax-exempt organizations' properties are also shown as being 'supportive' of the NID plan, also with no disclosure or differentiation on the map to show that they would be under no legal obligation to pay into it.

Also, we have no idea what constitutes a “representative” of a property in this case. A copy of the survey used reveals that business owners, regardless of whether they own property in the Downtown district, were polled (though apparently non-property-owning residents were not). It is not certain, but appears quite probable that these opinions were included in the count.

The survey did make it clear that the poll referred to “property owner-funded programs,” but gave absolutely no indication of what the costs might be or that the funding would come from an assessed millage, to be administered by a private agency with an appointed board, to be granted powers of collection equal to government.

Lastly, the survey was less than forthcoming about its intended import, likely leading many to disregard it.

From the introduction: “The purpose of this survey is only to gauge conceptual support for the establishment of a Community Benefit District (a.k.a. Business/Neighborhood Improvement District) for Downtown Easton...Please answer based on your interest in learning more, rather than if you were making a final decision.” (emphasis theirs)

Many of the actual questions, beginning, “Would you support, even in concept, a property owner-funded program that would support...” leave the reader to possibly believe that such programs would be voluntary, not mandated with an additional de facto property tax to be levied and administered by the agency that was responsible for the survey.

The median vs. average cost

Literature promoting the district's creation has stated the median fee would be about $24 per month, or $288 per year.

We found that indeed, 248 of the parcels would contribute more than $288, and the remainder would be assessed that amount or less, making the statement technically accurate. (The median amount is the dollar point at which half will pay more and half will pay less, not an estimate of what most will pay.)

However, the average amount each parcel would be invoiced presents a different picture.

Taking the total value of the taxable parcels, $39,220,300, and dividing by the quantity, 508, we get an average assessed property value of $77,205.56, with an average NID fee of $536.58.

In addition, 35 taxable parcels under the proposal would be assessed a fee of less than $100. The majority of these parcels are actually attached to other property or are unimproved, and represent driveways, private alleyways, etc. The fees attached to these properties mostly would be paid for by property owners that are already paying another fee for their main property.

This blurs the true cost per property owner, as a residential dweller may very well own two properties on the books, but in actuality, only own a house with a parking pad or landlocked yard that is counted as two.

It would be too complicated to locate and link which properties are connected in such a way and calculate the true median and average taking this factor into account in any timely fashion, but suffice to say, if it were done, both the median and the average annual cost estimates would increase.

Who pays what

There are 508 taxable property parcels in the proposed Downtown NID, and 69 non-taxable properties.

The taxable parcels range in assessed value from $100 to $1,752,200, totaling approximately $39,220,300. The average assessed value of the 508 taxable properties is $77,205.52.

Of all the parcels that would contribute a NID fee, at the proposed rate of 6.95 mills, we found that 35 of those parcels would contribute $100 or less, 86 would be assessed at $500 to 1,000, and 42 would pay more than $1,000 annually. The remainder, 345 parcels, would contribute between $100 and $500 annually.

The top five assessed properties, or just under one percent, would contribute $52,888 in NID fees annually, or 17.2 percent of the total NID budget.

The top two, 91 Larry Holmes Drive, site of Ringside Restaurant, and the Eastonian (which, though it was subdivided as condominiums, we calculated as one entity for the sake of simplicity), would pay $12,177.79 and $17,448.22 in annual NID fees, respectively.

Non-taxable properties

The 69 exempt parcels range in assessed value from $300 to $2,039,200, and have a total assessed value of approximately $17,735,100.

Of the 69 exempt parcels, 34 are government-owned or public property—these include buildings like city hall, and parks and public spaces, such as Centre Square and parking lots.

The remaining 35 parcels belong to private tax-exempt institutions and organizations—such as Lafayette College, churches, charitable non-profit agencies, etc.

Skimming the list and subtracting the public parcels, we are left with about $7.85 million over 35 parcels.

Since this is a quick estimate, let us give the situation the benefit of the doubt as well as leave room for error, and say an additional $1.85 million of that property is genuinely dedicated to the greater public welfare, leaving an assessed value of $6 million in privately owned tax exempt parcels that will also be exempt from a NID fee.

If these properties were not tax exempt, they would be obligated to contribute $41,700 in NID fees.

The NID proposal suggests these parcel owners, along with several non-property-owning non-profit organizations (the number or possible identities of which are not speculated upon in the proposal, nor is any estimated amount from this source given), will contribute a combined total of $35,000 annually, an amount that is quite a bit less than if they were to be obligated to pay the same fees as taxable parcels, if they choose to contribute at all.

The possible cost over time

The proposal limits the number of increases in the NID fee to eight over the five-year term, at a rate not to exceed 5 percent of the previous fee. These increases would be at GEDP's discretion. No indication or provision is made for spacing the potential increases.

Starting at the current proposed rate of 6.95 mills, assuming the maximum increase of 5 percent eight times, the rate could climb as high as 10.27 mills, a 48 percent rate increase.

This proposed allowable rate increase far exceeds the property tax increases permitted to municipalities and elected officials. It is also potentially 20 to 50 times the current rate of inflation.

The parcel assessed at $50,000, initially paying $347.50 in NID fees, would owe $513.50 annually if all allowable NID fee increase options were to be taken by GEDP.

The NID proposal would initially cost non-exempt Downtown property owners $273,581 annually in assessed fees, yet if all eight rate increase options were taken at the maximum rate, the amount would rise to $402,792.