The impact of development on taxes is complex and not always easy to convey. The common school of thought is that a developed piece of land is more valuable to a municipality because it provides a means of new revenue since developed land is taxed at a higher assessed value than undeveloped land. And the general assumption is that when there are more units on a given parcel of land, that there should be an increase the amount of tax dollars generated overall for that parcel. This is a popular misconception and both assumptions are simply generalizations that don’t always hold true.

When the amount of additional taxes collected exceed the additional town expenses incurred by having to support the new development, this can be a positive situation; but it isn’t always the case. The town pays for garbage collection, road maintenance, police enforcement, code enforcement, and other services, and if the cost of those services exceeds the new revenues collected then these additional costs are passed on to other residents in the same municipality. The same argument holds for school taxes.

First think about the concept that more homes equates to more tax revenue. Just because there are more units on a piece of property does not mean that the revenue generated for the school district or the town will increase. When the density of new development goes up, the assessed value per new home is generally reduced because the home has less land and is compared to smaller less expensive homes in the area. So there can be a huge difference in the amount of taxes that a municipality will levy on a new home owner for 1-3 acre property in the middle of a bucolic, neighborhood with tree lined roads, versus a town home condominium in the middle of densely populated development.

Just to illustrate this concept consider the following hypothetical situation:

120 homes x $20,000/yr = $2,400,000/yr
500 homes x $5,000/yr = $2,500,000/yr

This is not the exact situation here but it conveys the concept which is of concern for the Patrick Farm development as planned. While the overall assessed value of higher density housing may not bring in more revenue, the cost to the community of supporting 500 homes vs 150 homes is unquestionably significantly higher.

In addition to normal municipal expenses associated with any new home development, the Patrick Farm development plan calls for the building of many retention basins and recharge basins. The cost of maintaining many of these structures – which are one of the supposed methods for reducing the negative environmental impact of this development – will also be partially passed on to the town.

ROSA believes that the claims made in the proposed development plan with respect to taxes need to be examined more closely and we are concerned that the new taxes raised by this new community will be more than offset by the increased expenses of supporting this new densely populated neighborhood. Please be clear — increased taxes will be passed on to the other residents of the Town of Ramapo and Rockland County and at the same time, our property values will be diminished by this degradation of the character of our neighborhood.