Declining mill rate in Wilton? It’s complicated
WILTON — Comments have been made on videoconferenced meetings this week, that if school and town budgets remain flat, Wilton residents will potentially see a decrease in their property taxes.
“Based on current mill rate projections, we’re not going to have to raise taxes even to approve budgets that have been submitted with modest increases,” Board of Finance member Mike Kaelin said at a Democratic Town Committee meeting on Tuesday, May 5.
At the Board of Education’s special meeting on the same night, Chair Deborah Low said, “Before COVID, according to the mill rate models, even our normal budget request would have resulted in a flat mill rate. Now that we’re reducing our budget request, this could mean a tax reduction.”
The budgets, however, are only one component in computing a mill rate.
“There are a lot of moving parts,” Board of Finance Chair Jeff Rutishauser said.
One part is the increase in the grand list. For 2019 it was up 0.78 percent and after offsets, closer to 0.68 percent.
With the revaluation of properties completed last year, existing property values are generally the same for the next three years.
“If we keep expenditures flat and the grand list goes up, the tax rate generally goes down,” Rutishauser said. A lower mill rate applied to an unchanged assessment this year would mean less taxes owed, he said.
Another factor is the tax collection rate, which may be lower than in previous years when COVID-19 was not an issue.
The tax deferral program, proposed by Gov. Ned Lamont and adopted by the Board of Selectmen, gives some taxpayers — generally those who have experienced a significant economic decline due to COVID-19 — a 90-day grace period to pay their property taxes. A bill issued on July 1 and due July 31 will now be due Sept. 30.
“We won’t know for a while what our tax collection rate will be,” Rutishauser said, and the finance board hasn’t yet adjusted collectibility against the grand list.
Wilton’s tax collection rate has always been very high. Last year it was 99.2 percent.
“In times of stress, people may not be able to pay their property tax,” Rutishauser said. “We rely on that tax revenue to pay our municipal bills.
“If we don’t expect to collect as much tax, say we only expect to receive 99 instead of 99.2 percent, we will have to have a little higher mill rate to offset that lack of collection. We will probably have to adjust the tax collection rate down this year.”
If the collection rate goes down, the mill rate will have to go up by an equal amount.
But there’s more.
Other non-tax revenues the town receives are also a factor and they are far from settled.
“The state may revisit the money they send to affluent towns like Wilton,” Rutishauser warned. “We need to get that number.” Right now it sits at almost $1.3 million, a significant amount.
Toward the end of the Malloy administration, the town didn’t budget any state aid because when and how much might be received was so uncertain. The Lamont administration has been more reliable in fulfilling its promises to the town, Rutishauser said, but the state’s finances are in terrible shape now, so nothing to be received from the state is certain.
There are also local non-tax revenue sources such as building permits and recreation fees.
“When you budget a revenue source, you need to know the amount and the likelihood of getting paid,” Rutishauser said.
“We’re going to have to make a guesstimate in some cases,” Rutishauser said.
One more factor is debt service. Fiscal year 2021 will see a drop of about $1 million as more bonds are retired than are issued, due to the selectmen deferring some capital projects requiring bonding. This decline in debt service will be short-lived, however, as debt service is anticipated go up $1 million the next year.
“It’s a one-time event,” Rutishauser said.
The finance board also hasn’t determine an amount of additional reserves due to COVID-19 expenditures.
What happens next?
The Board of Finance meets Tuesday, May 12, to vote on projected budgets for town and schools and to present a proposed budget and mill rate. To view the meeting, visit wiltonct.org. After that, the Board of Finance will assemble a summary of fiscal year 2021 numbers ending up with the proposed mill rate.
The FY21 Financial Summary will be posted on the town’s website and people may comment by email until Monday, June 1, when the board will meet again to adopt the Board of Selectmen and Board of Education budgets and set the mill rate. Finance board members may choose at that time to increase or decrease the rate.
Since there will be no Annual Town Meeting this year because of the pandemic, the board is charged by the Board of Selectmen with adopting the town and school budgets.
Because of this, Rutishauser stressed the only way for citizens to be heard and the board to gauge public opinion is for people to write in. The board may be emailed through wiltonct.org or at firstname.lastname@example.org.