Are Wilton taxes out of line with its neighbors?
If you have $1 million to spend on a house you will pay more in property taxes in Wilton than you will in any of these other area towns: Darien, Fairfield, Greenwich, New Canaan, Ridgefield or Westport.
That’s because a $1-million home — with an assessed value of about $700,000 — carries an approximate tax bill of $18,781 compared to $7,890 in Greenwich, the town with the lowest mill rate; $10,745 in Darien; or $11,190 in New Canaan. In Westport, a $1-million house would cost you $12,663 in property taxes this fiscal year, $17,353 in Fairfield, and $18,207 in Ridgefield.
These property tax amounts are determined by the towns’ mill rates, which are reported by the state of Connecticut’s website CT.gov.
Assessed values are 70% of the estimated market value, so a home with an assessment of $700,000 would have a market value of $1 million.
Tax rates, known as mill rates, are set by towns in order to raise the revenue they need to cover the costs of town government. The mill rate is the amount a property owner is charged in tax for every $1,000 of assessed property value they own in town. Since a $700,000 assessment has 700 thousand-dollar units, Wilton’s mill rate of 26.83 for fiscal year 2016 multiplied by 700 brings the tax bill to $18,781.
A primary factor in determining a town’s mill rate, other than the amount of money needed to run the town, is how much taxable property is in the town. The sum of the assessed value of all taxable property in a town is known as the grand list. This list is compiled each year by the tax assessor.
If all towns needed to raise the same amount of money, say $100 million, the town with the largest grand list would have the lowest mill rate — the factor needed to raise the $100 million — and the town with the lowest grand list would have the highest mill rate.
Of course towns do not have the same size budgets. In the accompanying chart comparing seven towns in the area, Wilton has the lowest grand list and the highest mill rate and thus the highest tax bill on a $700,000 assessed value property. Greenwich has the highest grand list and the lowest tax bill on a $700,000 assessed property.
Towns with even smaller grand lists have even higher mill rates. That $1-million house would cost the following in taxes:
- Redding — 28.91 mill rate: $20,237
- Weston — 28.67 mill rate: $20,069
Some towns, like New Canaan, juggle the tax collection rate, budgeting an amount that is less than it expects to receive. For example, in fiscal year 2016 New Canaan budgeted to receive 98% of taxes due, when it historically has a collection rate of 99.6%. That gives it about a $2-million cushion.
Wilton, on the other hand, tries “to use the best estimate of the collection rate as we can,” Serenbetz said. “For FY16 we increased it from 99.3% to 99.4% to better reflect our actual experience (which varies by year).
“One thing we do which many other towns do not is to augment our actuarially required pension contribution by 5% to 20% depending on how underfunded the plan is. For FY16 the pension plan was funded at about a 90% level, which called for an additional 10% contribution to the plan.”
How concerned is the Board of Finance with Wilton’s tax rate relative to its neighbors?
“Very concerned,” Serenbetz said, “first because it imposes a high tax burden on homeowners and businesses, and second because we believe it disadvantages us by making our real estate less attractive than that of our neighbors.
“Part of the reason for a higher mill rate is because our grand list is smaller. For example: all of the towns must provide police, fire and public works services. Assuming that delivery of those services is similar from a head count perspective in each town, it stands to reason that Wilton would have to have a higher mill rate (based on the smaller grand list) than those other towns. That said, if our mill rate is causing people to look elsewhere for housing our housing prices remain suppressed (or do not grow) and that keeps the grand list from growing.”
It used to be that Wilton’s school system set it apart from other towns, but towns like New Canaan, Darien and Ridgefield also have excellent schools. And home buyers are taking lots of things into consideration when shopping for real estate.
“I do think that there is a growing concern that we’re getting closer to Westchester, though still well under Westchester taxes,” said Patrick Filley, a real estate agent with Berkshire HathawayHome Services. People looking for a home under $2 million “are taking their monthly payments, which include taxes and insurance, and comparing it.” They are also comparing how quickly they can resell their home, he added.
Real estate, of course, is an industry with many more gray areas than black and white. The condition of homes for sale, what you get for your money, the lifestyle people want, the quality of the schools, and commutation are all factors.
Filley said a real estate agent from New Jersey told him “the band around New York is going crazy. They are putting up 40-story condo buildings in Jersey.” Many potential buyers are biding their time in rentals.
“Connecticut continues to be in the bottom two [of states] in recovery of the real estate market,” he said, “and more importantly we know that G.E. is talking [of leaving] — thousands of jobs will be gone by the beginning of the year. We’ve got UBS, people are going to Tennessee already. There are not a lot coming in.
“The overall fiscal view of Connecticut is not positive,” he said. “That’s what worries me.
Lynne Vanderslice, the Republican candidate for first selectman, has been a member of the Board of Finance that has had a goal for several years of keeping budgetary increases to 1.75%.
The Bulletin asked her to comment on Wilton’s position among its neighbors in terms of taxes and she offered the following statement.
“As a Board of Finance member I have been focused on minimizing mill rate increases because of my concerns with how they impact affordability for current residents and businesses and desirability for potential future residents and businesses. As first selectman, I will continue to focus on minimizing growth with the long-term goal of no mill rate increase. This will require a three-pronged approach: containing operating costs, increasing revenues through grand list growth, and minimizing borrowings. I have a detailed plan on my website, lynnevanderslice.org, which lays out how I plan to work with the Board of Selectmen to accomplish this. Included within the plan are aggressive efforts towards shared services between the town and the Wilton Public Schools and the town and other CT communities, zero-based budgeting, proactive approaches towards encouraging housing options for seniors and empty-nesters, outreach to commercial property owners and businesses and support for the recommendations of the Economic Development Commission.
“As to the five-year increases in the chart, aside from the typical disclaimers, they are also somewhat misleading as during that time period not all towns incurred the mill rate increases generated as a result of a post-recession revaluation. Only Wilton and Ridgefield did. For example, had the chart begun with FY2011, Westport would have a six-year growth of 21.8% and Wilton 33.1%, rather than the 3.7% and 28.6% in your chart. Higher, and more than any of us want, but not as dramatically so. As first selectman, I will continue to chip away at the mill rate resulting in a more competitive comparison with neighboring towns.”
Deborah McFadden, a member of the Board of Selectmen who is running for first selectman on the Democratic ticket, said, “We need to hold the line on mill rate as much as we can,” but felt comparing towns is misleading. “Mill rate is a poor indicator of financial management,” she told The Bulletin.
Rather than comparing mill rates, she said, “the more realistic numbers to look at is the size of the check that the typical family sends to town hall twice per year.”
She said New Canaan’s mill rate is lower because the median house price is much higher. “A better way of comparing Wilton and New Canaan is per household taxes which, based on median house price, is $20,583 in Wilton and $20,428 in New Canaan.” And, when compared to other towns in Fairfield County, Wilton is in the middle of the pack.
“But ultimately it is not about comparisons,” she said. “It is about what we do in Wilton with the resources we have. Keeping spending and bonding under control with sound fiscal management is key.
“I plan to champion both increasing revenue and cutting expenses.
“We need to continue to look for ways to reduce expenses but not to the point of jeopardizing our AAA rating from Moody’s. I plan to work with our new CFO to take a fresh look at the entire budget and enhance our financial reporting. Wilton just brought on board a new facilities manager and that position should pay for itself in cost savings.
“Schools are most of our budget and I have confidence that our new superintendent will make our schools more efficient as the enrollments change.
“I do believe planned economic development with the input of all the stakeholders should be a priority. Growing our grand list in a smart way will take time but will ultimately take pressure off the taxpayers. Working with the business community is essential.
“We need to enhance the Wilton brand, which will benefit business and residences. Building the Wilton brand and strengthening our community with long-range planning and economic strategy, and the crafting and implementing of an economic development plan are critical.”
Serenbetz added this. “The bottom line is that the Board of Finance believes that we must control costs, i.e. we cannot keep spending at a rate that requires 2% mill rate increases. On the education side we are encouraged by the new administration’s willingness to address the cost issue and we look forward to working with the new Board of Selectmen on the FY17 budget.”