The Costs And Benefits

Of Open Space Recalculated

To the Editor:

Two thoughts on last week’s “Editorial Ink Drops” regarding the purchase of open space in Newtown:

First, increasing property taxes during difficult economic times to “lock up” open space and prevent development is a matter over which reasonable folks can disagree. There are obvious pros and cons, although the “pro” outcome smacks a little bit of the “we’re here, now let’s close the door” mentality.

But, second, if The Bee wants to encourage a debate on this subject, it does the community no service by using specious reasoning in its editorial. The example given of the “fiscal benefit” used to justify the purchase of a 29-acre parcel in 2006 for $1.2 million does not withstand scrutiny today. (I’m not sure what scrutiny it withstood in 2006, but that is water long under the bridge!) Specifically, the lost revenues stream in the town from property taxes on the subdivision’s houses, which does not account for increases caused by the 2007 reassessment and annual mill rate hikes, is understated. Although it is not a huge difference today, as it seems impossible to imagine that Newtown property taxes will ever be reduced year-on-year, that understatement will inevitably get larger as time and tax increases march on.

But, the real issue is on the other end of the equation — the purported savings from cost avoidance. The analysis used the total school budget divided by the total student enrollment to come up with an average cost per student, and then claimed that 14 times the average cost would have been the burden imposed by the additional 14 children living in the subdivision. Wait a second…shouldn’t a proper analysis be based on the marginal cost (the incremental cost of one more unit) of those additional kids? Would 14 more children have caused the Board of Ed to build another school, hire more administrators and teachers, contract for more buses, or increase its utility or maintenance outlays? Of course not. The additional 14 children would have been readily absorbed into the existing 2006 infrastructure, and — more importantly — they most certainly would be readily absorbed today, when there appears to be a growing consensus that Newtown’s student population is likely to decrease in the foreseeable future. The marginal cost of those 14 students was then and is now probably close to zero (likewise for the marginal cost of municipal services for the new subdivision residents), and the $1 million “benefit” in forgone costs every seven years for purchasing the open space simply goes away.

What doesn’t go away, unfortunately, is the ever-increasing Newtown property tax bill, which has more than doubled in the 16 years I’ve been a resident. Before we criticize the 2010 CIP’s cutback on funding for open space purchases as “not smart,” let’s make sure we do a valid cost/benefit analysis based on today’s real-world circumstances, and not rely blindly on historic, ephemeral “fiscal benefits” that were questionably derived.

George Schmidt

12 Old Castle Drive, Newtown                             November 22, 1010