Westport has a new mill rate. Michael Calise reports:
The rate for the 2021-22 tax year was set by the Board of Finance at 18.07 mills.
Each year a new mill rate is set, based on 2 major factors: our Grand List (the total assessed value of all taxable properties in Westport, which is finalized by our tax assessor) and our annual budget (finalized by the RTM).
The mill rate is the multiplier of our Grand List, which produces the net revenue required to run our town after all other revenue streams and anticipated shortfalls (such as an allowance for unanticipated expenses) are factored into the mix.
Since the 2015 reassessment, our annual Grand List increase due to new construction and property improvements, as well as strict budget controls, have allowed our mill rate to remain constant — in fact, actually reduced for the tax year we are currently in.
This year a third and unexpected factor came into play: the 2020 reassessment determined a greater than 5.4% reduction in our Grand List.
Our final annual budget, as approved by the RTM, was set at a 2.6% increase. When factored against the 2020 Grand List (as described above), this necessitated the new mill rate of 18.07 mills. It is up from the current 16.71 mill rate. Individual property taxes for the ensuing year will be calculated based on the new assessment.
2020-21 budget: $212,772,828
2021-22 budget: $218,479,214 (+2.6%)
2019 Grand List: $11,445,273,580
2020 Grand List: $10,830,370,714 (-5.4%)
This may seem like a dumb question, but is the mill rate of 18.07 mills an INCREASE or DECREASE from previous years? Furthermore, what was the mill rate before, since the difference between the two mill rates will have a direct impact on Westport residents’ tax bills. Another piece of information would be to indicate if someone had a home worth $1,000,000 under the PREVIOUS mill rate, taxes would have been $X and with the new mill rate taxes will be $Y.
Well the mill rate was 16.71 and the new mill rate is 18.07 your taxes go up (a lot!)
From the article you are commenting on:
“When factored against the 2020 Grand List (as described above), this necessitated the new mill rate of 18.07 mills. It is up from the current 16.71 mill rate.”
Of course, the impact on anyone’s actual taxes will depend on how much, if any, their assessment increased or decreased which is likely to be different property by property.
This is typical government. Determine the budget, then look at your income, then increase taxes to make up the difference. Did it ever occur to anyone that if your income goes down you’re spending should also go down.
It’s complicated. If your individual property was also devalued by 5.4% (like the grand list overall), then your individual taxes will go up by 2.6% (the same as this year’s budget increase). You can’t just look at year-over-year mill rate change.
The mill rate went up by 8.1% (18.07 vs 16.71). The Grand List fell by 5.4%. At the simplest level, this means the following for a hypothetical house previously assessed at $100,000 and taxed at $1,671 [$100,000 x .01671]. First, the house would now be assessed at $94,600. Second, the house would be taxed at $1,709 [$94,600 x .01807]. The overall tax on the house would thus increase by 2.3%.
At a more complicated level, the AVERAGE tax increase on specific existing properties is probably less than 2.3%. This is because the Grand List is affected by new housing (and commercial real estate) stock. An increase in the amount of building or renovations would thus offset the decline in the Grand List attributable to a drop in a downward revaluation. Over the past few years, I believe such building has contributed about a percentage point or so increase every year to the Grand List. If this is correct (and continued into the current year), the 2.3% increase would be more like 1.3% for any specific property as the tax burden is spread across a larger base.
Finally, results would vary from property to property. My understanding (perhaps incorrect) is that at the time of the Grand List revaluation, the less expensive part of the market had performed better than the more expensive part of the market (compared to the previous valuation). That would mean that the share of taxes attributed to less expensive homes would increase more than the average.
How does the grand list drop while selling prices of houses soar?
Why is the Grand List lower in 2020 than it was in 2019? What caused the loss in value?
Revaluations for the Grand List are done every five years. The Grand List in 2020 was based on 2015 valuations. The relevant base period is 2015, not 2019. The new Grand List does not reflect the full upswing in values that began shortly after the pandemic’s onset.
As usual, Jim Westphal presents the best picture and facts as to the Mill Rate, taxes and the revaluation. Jim was on the BoF. I believe it important to note that, for most, real estate taxes decreased a small amount as a result of the action last year of the BoF. I opposed that action. My opposition reflected my judgment then that a tax decrease should have been provided for until the completion of of full CV 19 year, i.e. 2021. I believed then that there were too many unknowns last year to justify a tax decrease last year. The fact of the increase in taxes this year, after a decrease last year, confirms to me that we should not have had a tax decrease last year. I hope the timing of the decrease last year and the increase this year was not impacted upon by the BoS election this November. I could make a case on either side of the political equation but actually believe political considerations were not relevant last year or this year.