Robert De Niro vs. the New York State Property Tax System
As a general rule I try to learn as little as possible about celebrities and actors. For one thing I have a hard enough time with suspension of disbelief as it is. For another I find I usually regret it. When I heard that Robert De Niro was having trouble with the NY State property tax system I had to investigate. On the surface the story is pretty simple and in some ways makes De Niro seem more like a regular person. Afterall, How many of us ordinary people get into fights with their local government over the assessed value of their home? Upon closer inspection I began to realize the gross over-simplification the Times applied to De Niro’s plight. One does not simply multiply to calculate New York taxes. What about the equalization rate?
Having done work in Syracuse, Buffalo, and Niagara Falls, I had to acquaint myself with New York’s labyrinthine approach to property taxes. It’s a topic worthy of its own discussion but the short version of the story is that the tangled knot of over-regulation might be holding the state back more than anything else. A property tax bill in New York makes cell phone bills and letters from insurance companies look straightforward. Erie County alone, for example, has over 1,500 separate tax codes.
In addition to his well-known NYC properties De Niro has a getaway estate in bucolic upstate New York. The nearby small town decided that the extravagant additions to the former farmhouse (like turning a barn into a theater) deserved a significant change in his tax bill. To be fair I doubt De Niro had any idea this way going on. I’d pay a team of lawyers to insulate myself from taxes too if I could (Instead I just have to settle for throwing away all my mail without opening it). It’s probably for the best given his past experiences inside courtrooms.
I suspect they just got overzealous and thought they were defending him. In their zeal, however, they basically bankrupted this town. To his credit, De Niro has since capitulated and paid not only his taxes but reimbursed the town for its legal efforts. I like to imagine him having not realized what was happening until the times brought it to his attention. According to this second article that’s exactly what happened.
I couldn't resist the opportunity to take matters into my own analytical hands. I felt compelled to Do The Math and see what Robert De Niro’s tax bill really looks like.
One of the wonderfully egalitarian things about taxes, especially property taxes, is that they are public record. According to the tax data it looks like his 70 acre estate should owe about $165,000 in total property taxes. The sad part about this, though, is that the Town of Gardiner only stands to get about $6,500 in new revenue for the reassessment (The Times quotes $16,000. They could be right, the bill can be a little hard to add up. I think they may have included the highway tax though). It’s especially unfortunate because of the $160,000 legal bill which the Times references. Honestly, the Times article itself was probably worth more than De Niro’s taxes. Being mentioned in two articles in the New York Times has probably done more to advertise Gardiner, NY than $6,500. I have some ideas about that but let’s look at the numbers first.
Gardiner, NY's Tax Burden
The school district and Ulster County get the vast majority of the windfall. In the State of New York it’s the small towns that make decisions like this to the benefit or detriment of the other tax jurisdictions. These numbers seem fairly substantial ($160,000 is enough to purchase an entire house) but do they matter within the context of the wider budget? How much of the town was De Niro refusing to pay for?
Robert De Niro’s contribution to municipal coffers is as much as 37 average Ulster homeowners, but I’d be hard-pressed to say it’s crucial. His tax bills account for .8% of Gardiner’s budget and even less of Ulster Counties or the school district. I was actually less impressed by the relative importance of De Niro’s mansion as the $17,000 the school district spends on each student. While $160,000 might be a big number but it’s basically a drop in the fiscal budget. What burden then, does it place upon the man himself?
De Niro's Tax Burden
When we take into account De Niro’s wealth and income the utter insignificance of both this reassessment and lawsuit becomes apparent. Property taxes aren’t income taxes, even though sometimes they’re used that way, but this speaks to his ability to pay and willingness to bother fighting. Robert De Niro is thought to have about $185 million. That’s about one quarter of the total value of Gardiner itself.
What about his income? Actors are paid by projects so I took the cinematic masterpiece Little Fockers as an income dipstick. De Niro was paid about $20 million to move around and say words in this movie (his average pay per movie appears to be about $17 million). Little Fockers may run for an agonizing 98 minutes the production period of movies takes something like 3 months. If we, conservatively, put De Niro there the entire time working full work weeks he would have spent 480 man-hours on Little Fockers which works out to about $18,000/hour.
De Niro's Relative Tax Impact
At that rate it would take him about a day to pay his entire tax bill. It would take a work week to pay for the entire Gardiner budget. He would only have to make three more Focker movies to cover the entire Ulster County budget, though I imagine there would be financial ramifications for the film industry and perhaps even health impacts for De Niro himself. Where things get really interesting is that seven hours of his time would equate his school tax bill.
Creative Alternatives
De Niro "mentors" at-risk youths
The point I’m trying to make with these numbers is how much time and effort can get spent on problems that should never have mattered. Like most development disputes, the conflict came down to a breakdown in communication. Before spending hundreds of thousands of dollars in court both sides should have considered some creative options. Seven hours of De Niro’s time would cover what owes to the school district. Let’s be honest wouldn’t one full day of Robert De Niro lecturing about whatever the hell he felt like talking about be way better than whatever the school system would spend $122,000 on?
This whole affair has made De Niro look like an aloof unsympathetic celebrity (until he did something about it) and made the town look like a pack of predatory beggars. Would it not have served both purposes better if he had simply agreed to promote the town in some kind of promotion or been the cupcake king in Gardiner’s annual Cupcake Festival? Couldn't he have done something like this 30 second youtube video for Gardiner?
Robert De Niro is a famous and creative individual with ample resources (and if you can't tell one of my favorite actors). There are myriad ways he could give Gardiner a boost. My hunch is that the biggest loss in this whole ordeal is that his private country getaway is now in the New York Times (and some jerk put a picture of his house online).
A Miles per Gallon Approach
Of course there is a different lesson here for the Town of Gardiner about tax efficiency and development decisions. At just $80,000 per acre, De Niro’s estate is less than impressive from an efficiency standpoint. They may have been well within their rights to reassess the value of De Niro’s estate but I think the bigger issue is how distracting and misleading the big ticket single property items can be. In a way his estate functions much as a Walmart or shopping mall or Taco John’s in the psyche of a town viewing the world through a miles per tank filter. At just $80,000 per acre, De Niro’s estate is less than impressive from an efficiency standpoint. If Gardiner had taken a miles per gallon approach they might realize that their real long term fiscal health depends on incremental compact developments. A few well executed projects downtown would get the same result.
41.68006,-74.150337
Take this little building for example. This looks like an old house that evolved into a garden/hardware store in downtown Gardiner. It produces $10,000 a year on just 1/3 an acre of land. If you had five more acres of development just like this store you’d get the same tax production as De Niro’s estate. That would be a pretty substantial increase for a little crossroads like Gardiner but it highlights how a little expansion in the right place can go a long way.