Finance panel trims tax rate for new fiscal year
Updated 10:12 am, Thursday, May 22, 2014
Even though town spending for the new fiscal year that starts July 1 is set to rise more than 2 percent, the tax rate funding the 2014-15 budget will be lower.
After discussing the impact of higher-than-anticipated revenues, the Board of Finance on Wednesday unanimously approved reducing the tax rate from 18.07 mills to 17.94, a 0.72 percent reduction, according to Finance Director Gary Conrad.
That means a property owner with a house assessed at $600,000, with a market value of $857,000, will pay $10,764 under the mill rate compared to the current $10,842, a $78 reduction, said Conrad. Taxes on a house assessed at $1.5 million, with a $2.14 million market value, will drop from the current $27,105 to $26,910, or $195 less, he said.
The reduction was possible because of additional revenues of about $2.5 million, instead of the $1.5 million initially anticipated, during the fiscal year.
"I think it's extremely important and it sends a message to households and businesses that taxes don't always go up but can go down if conditions are right," said finance board member Brian Stern.
Stern said he and fellow finance member Tom Lasersohn worked the past several days reviewing financial data spread sheets to make sure the reduction could be done responsibly. "We have sufficient reserves to keep education and other services the best we can," he added.
"I will propose and Tom will support the reduction," Stern said.
The overall budget approved earlier this month -- including accounts for things like debt service -- stands at $198,249,184, a 2.5 percent increase over current spending. That amount includes $76,595,682, a 0.6 percent increase over current spending, for the town side of the ledger, and the Board of Education's $109,202,984 operating budget, a 4.8 percent increase over its current budget.
Finance member Jennifer Tooker said she would "100 percent, fully support" the proposal. "We have reserve levels that are appropriate in the 9 to 11 percent range," she said.
"I think a decrease will benefit all of Westport and is the best thing to keep seniors in town," said member Michael Rea, who called in to the meeting. He said a tax reduction "is better than a rebate or special programs."
"I have never been for overtaxing," added member Janis Collins. "This board has been very conservative and this is a result of that," she said, adding "I think it's the right thing to do."
Board Chairman John Pincavage said the reduction can be done without neglecting municipal services, education or investments.
"This is a nice confluence and I'm really happy to be able to do this," he added.
Board of Education Chairwoman Elaine Whitney agreed a reduction would not affect educational needs, adding that as of May 12, the school district will actually see a positive net balance in its health care fund of between $700,000 and $1 million, meaning it won't need to seek a special appropriation from the finance board.
Late last year, the school officials had anticipated a shortfall of nearly $2 million in its current budget because, in part, of several large insurance claims.
However, the school board's Health Insurance Fund Review Committee, an ad hoc group formed to look into the issue, discovered that instead of a deficit, the board could possibly realize a surplus by the end of the fiscal year June 30. That was the budget status that Whitney was referring to Wednesday night.
First Selectman Jim Marpe also backed the mill rate reduction, saying that "over the past few years, this Board of Finance has taken a conservative approach to ensure the stability" of the town's finances.
"Your hard work is paying off," he told board members. "We have grown our grand list, our tax collection percentage is up, our shift to high deductible health savings plans is helping control our medical costs, and our department heads are finding innovative ways to enhance productivity."
Marpe added that he believes "we can make a responsible tax reduction this year while retaining this board's conservative financial discipline, particularly maintaining a reserve balance that stays at the top end of the range you have established."
He said the town "should take this unique opportunity to offer some relief to our taxpayers."