More on Revaluation

Many of us on the City Council have heard quite a bit about revaluation, both in the public wherever we happen to be, and in emails. Below is a good sample of some that I've received, and a response from the City Manager. (I replied directly as well, but I thought Larry's was a good answer worth sharing). For privacy's sake, I removed personal identification of the writer, other than his first name.

The City Council continues to assess what steps can be taken to soften the overall effect of the revaluation, from phase-in, to spending actions, to increased economic development opportunities. As always, your input and ideas are welcome. Please share at our email addresses found on the City's website .

Subject: Mill Rate and assessments

Mayor Benigni and Mr Kendzior and City Council Members,

I am writing this letter as a result of the recently received reassessments of the homes in Meriden and the running commentary in the Record Journal about the mill rate. First let me start by saying that I was alarmed by the amount of the increase in the assessment value of my home. I also find it very strange that the assessment increased so much in a housing market that is beginning its decline. Meriden has always been a reasonably priced place to live, however, the assessments and the proposed 30% mill rate will make that no longer a reality.

Let me explain. For the working class person with a family of four, the average increase will be somewhere between $100-$150 per month. Where do you propose that the money comes from? The only really acceptable mill rate is somewhere between 20-22. That would afford a minimal increase in the residents taxes and would be understandable. At a 30 Mill rate the increase is almost a 25% increase on property taxes per year! I would also like to know what additional services we will be getting if that 30% Mill Rate is applied. Will we not have to pay for bulky waste any more? Will the overcrowded classrooms become less? Will you finish the sidewalk all the way up Liberty Street since I was told that you ran out of money for that project for this year? Will the city be cleaner?

What happens when we run out of money and can’t pay our taxes? Is there no penalty for us like there is no penalty for the city not servicing the residents when they run out of money for things? I think not.

I ask you as a citizen of the city to look at that mill rate very carefully. 30% is by no means a bargain to live in this city. I have heard and seen people throwing around that number with a smile. We as residents of Meriden are not smiling about that, or the proposed increases. We are not receiving any more benefits than we have and now we will have to pay 25% more to live here. In a declining housing market and a tough economy, you would be making it very easy for us to leave (and leave quickly) the city and pay taxes to a smaller town that keeps their expenses in check and does not make the residents who live, work, shop etc in their communities pay through the nose to help pay for budget shortfalls that are attributed the government of the city, not necessarily the residents.

I look forward to you re-visiting these issues and making a favorable decision for the residents of this city.

Brian, Meriden Taxpayer

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Dear Brian-

Thank you for your well written note. The impact of revaluation is a serious concern to all of us as residents and taxpayers, and to all city officials and staff. As someone with responsibility for setting City policy, it is good to hear from concerned citizens like yourself.

State law requires that all classes of real property be revalued every five years. The change in your assessment's a change from the last revaluation in 2001. The impact of each revaluation depends on the relative change in real estate values among the different classes of property: residential, commercial and industrial. In 2001 commercial and industrial values increased at a greater rate than residential values, and as a result a greater portion of the overall local tax burden was shifted onto owners of business property, and residential owners were impacted very little. That revaluation went into effect with very little public notice for that reason.

In 2006, the situation is different. Residential values rose in the period from 2001 to 2006 at a rate that is almost twice that of commercial property and five times that of industrial property. The new assessments reflect actual sales data taken over a 2 1/2 year period, right up to the end of September, 2006. Although the housing market in Meriden has slowed, the sales data reflects only a small decrease in the last two months. The trend was taken into consideration, and the new assessment for residential properties sold during the period when that sales data was collected average seven percent less than the actual sales.

However, the relatively greater increase in residential values does cause a shift in the tax burden, one that is not taken lightly. While we will not know what the new mill rate will be until after all the assessment appeals are heard and the list of taxable property, including motor vehicle and business property figure which are not yet available, is finalized, and we are able to estimate the amount of state revenue and other revenues the City will receive, and decisions on the budget are made, it is clear that the percentage of the local tax bill paid by residential owners will increase and the portion paid by commercial and industrial property owners, and motor vehicle owners, will decrease, on average.

This occurs even if local taxes are not raised as a whole. At 28.25 mills, assuming that the motor vehicle and business property part of the tax list remains the same, every extra dollar paid by a residential owner is offset by a dollar decrease to commercial, industrial, motor vehicle and business property owners. In other words, revaluation does not result in additional revenue or result in increased spending., even though it causes the tax bill of residential owners to increase on average.

The impact of revaluation is something that the Mayor, City Council and city staff have been concerned about for some time, and we have tried to take steps with regard to expenses to offset that impact to the extent possible. The cost of the amount authorized for city projects paid from bonding was cut by half two years ago and is proposed to be cut by half again this year. The wage increase negotiated with our employee bargaining units have been lowest ever, and employees pay a greater share of their health care costs than ever before. Positions have gone unfilled, filled at a lower rate of pay, and departments reorganized to decrease wage costs, which are the primary city expense. (Italics mine. STZ)

I'm quite sure that this year the examination of the proposed budget will be even more intense. However, just like homeowners, some City expenses, like electricity, gas, gasoline, heating oil, and health care, increase despite our best efforts. Steps that we have taken have lessened the rate of increase of those types of expenses, but the absolute costs still have risen.

At this point, it appears you are taking the proper step of making sure that your own assessment reflects the value of your property. I did take a look at your assessment, and the increase is somewhat less than the average residential increase, but you should ensure that the revaluation company has all its information on your home correct and bring to their attention any appraisal information you may have or information on the sale of similar sized homes in your neighborhood. A quick check of the change in your tax situation, assuming your assessment on your home and motor vehicles doesn't change, and using the revenue neutral mill rate of 28.25, shows that your annual tax bill would increase by approximately $370 for the year. That is not an insubstantial amount, but it is less than the $100-150 a month mentioned in your note. Of course, all of those numbers are only estimates until the budget is set.

There are options allowed by law to phase in the new assessment numbers over more than one year, and I know that the City Council will be examining those very carefully. We do need to lessen the impact of revaluation on residential owners as much as possible, but at the same time there has to be equity for owners of other kinds of property whose taxes would otherwise decrease. Once you are satisfied that you have done what you can to ensure that your assessment correctly reflects your property value, and as the budget hearing process goes forward, you have the opportunity to offer your ideas and thoughts on the level of spending necessary to maintain those essential services you mentioned, and I am confident that the Mayor and Council will be paying attention, particularly this budget year.

Lawrence J. Kendzior

Meriden City Manager