Meriden, Wallingford, Southington and Cheshire homeowners could all see their tax bills increase more than $100 in the next fiscal year.
Local leaders have proposed rate increases, blaming this on increased health benefit costs, union-negotiated contracts, or a combination of both. While each municipality has its own set of circumstances, it is likely that owners of the average single-family house in each town will see an increase of about $100.
In Meriden, City Manager Lawrence J. Kendzior proposed a tax rate increase of 0.85 mills, which equates to a $102 increase for the owner of a median value single-family house. One mill is equal to $1 of tax for each $1,000 of assessed property value. Last year, city residents saw an average tax increase of $29.58. Meriden’s median value single-family house is $170,000.
By pre-funding health care and workers’ compensation costs, effectively reducing them in the current fiscal year, Kendzior said both items need to fully funded in the 2014-15 fiscal year. There was also a rise in serious illnesses, which caused a significant increase in the cost of health benefits, Kendzior said.
“Those two cost centers account for more than the amount of an additional mill,” Kendzior said. “If there wasn’t a need to put those additional funds into those two items, there would be no tax increase or a slight decrease.”
Kendzior added that he has been encouraged by property sales, not including foreclosures. The city last went through a property revaluation in 2011. There are also signs of increased business activity.
In Southington, Town Manager Garry Brumback proposed a budget that would result in a tax increase of $158 for the median value single-family house. The average Southington house value is $250,000.
“It was pretty simple for us,” Brumback said. “The biggest things for me are health care costs, union-negotiated wage increases and the town embarking on a very aggressive capital improvement plan.”
Southington has put off capital expenses, including new trucks, culverts and improvements to parks. Last year, the Town Council approved a spending plan that lowered the tax rate, but Brumback’s plan this year would increase it 0.9 mills from 27.46.
“We are being mindful of the economy, but the residents have spoken,” Brumback said, noting they want to see capital improvements. “I do believe the economy is starting to bounce back and while it’s not a full bounce-back, we can no longer defer some of these capital improvements.”
Southington last went through a property revaluation in 2012.
Wallingford Mayor William W. Dickinson Jr. painted an ominous picture during his budget proposal Tuesday afternoon. Dickinson called for a spending increase of nearly 3 percent, which would raise the tax rate by 0.54 mills. For the average homeowner, it would mean a tax increase of $103. In Wallingford, the average single-family homeowner has a property valued at $191,000. Last year, the Town Council approved a tax increase of more than half that, at $46 for the average homeowner.
Dickinson said the town is also facing increased health insurance and pension costs.
In his budget message, Dickinson said the town is in need of adapting plans and priorities to “harsh economy realities.” The grand list showed growth of less than 1 percent.
Cheshire’s proposed tax rate increase from Town Manager Michael Milone is more complicated. Having just gone through a property revaluation, Milone proposes increasing the tax rate by 3.1 mills. Because many properties in the town saw a decrease in value, 37 percent of the town’s taxpayers would see their property taxes decline. Eleven percent of the town would see an increase of less than $100 and 18 percent would see an increase of over $500. One-third of the town would see an increase of between $100 and $500.
“This is most unusual,” Milone said.
Also playing a role in Cheshire’s budget is the Board of Education’s plan to start all-day kindergarten. The plan accounts for close to $800,000 in spending. A budget proposal from the council is expected to propose a lower tax increase, Milone said.
Milone said he is also encouraged by development and the real estate market. Unfortunately, he said, the last revaluation came in 2008 just before the housing market saw a devastating collapse. The proposed tax rate increase would have been even higher had the revaluation taken place last year, he noted. There has been a slight increase in real estate value in the last year, there have been signs of economic development progress and building permits have seen no recent decline, he said.
“Those are all signs as far as the economy goes,” he said.