Trenton Redux

Lies, Damn Lies, and Statistics

The Artworks blog today took exception to our comments reported in the Trenton Downtowner. Our estimate of the City of Trenton's $168,000 cost to the preserve the status quo was dismissed out of hand. The blogmaster opined that I'd simply made the number up: "The best statistics are the ones you make up yourself....Having dreamed up some numbers, he [Goldstein] is now outraged by the numbers he dreamed up."

In "Economics are a Bummer" we explained where the number came from: a combination of direct city-paid operating expenses and foregone tax revenues.

The majority of operating expenses we identified were simply utility bills. We estimated $60,000 of the $90,000 total for utilities. The actual average over the last 3 years has been $3,900/month, or $47,000/year. Recently the rates have been going up. Perhaps Mr. Rostov hasn't noticed.

The other component was foregone tax revenues. We estimated $80,000 from the units based on a total $2 million valuation (8 units x $250,000 x 4% property tax rate).

Perhaps that's where I went wrong. On February 9, Mr. Rostov published an estimate of the market value of the units as $2.7 million. So based on Mr. Rostov's estimates the city isn't foregoing $80,000 in property tax revenues, it's $109,000 ($2.7 million x 4.03%).

By Mr. Rostov's calculus, the city's actual subsidy is therefore $199,000 per year, not the $170,000 we claimed. This works out to $544 per MCCC student in the spring term.

I stand corrected.

posted by Michael @ 6:45 PM