Opinion
Wilton Bulletin Editorial: A taxing effect

Mar 6, 2008

The recently released assessments have many residents up in arms and clamoring to know why the town thinks their house is worth 30% more, or higher.

The revaluation of all property in town has been put under a microscope more this year than in years past, mainly because there is a growing concern over the housing market, and a sense that the economy is sputtering on the brink of recession — if it’s not there already.

It’s an emotional reaction more than anything for residents — though some will have valid claims to appeal their assessment and can do so by filing appeals with the assessor’s office before March 20. The important thing for residents to recognize is that everyone is in the same boat.

Assessments increased 31% on average across town, meaning every residential and commercial property owner is looking at the same, seemingly high, increase.

But considering that the last full revaluation was conducted for the 2002 grand list, 31% isn’t an extraordinary hike.

Property values have risen, in some cases substantially, across town in the past half-decade. The value of properties in town isn’t just an arbitrary calculation, either; the assessor and Vision Appraisal used real market data to determine a home’s worth.

When your neighbor sells his 2,300-square-foot Colonial, your 2,300- square-foot Colonial can be assumed to be worth at least that much as well.

The problem with the revaluation, of course, is that your home may no longer be worth what your neighbor sold his for the year before. The revaluation is based on analysis of all sales in 2007 up to Oct. 1, and while the housing downturn may have started within that period, it was hardly at the depth or scope it is now known to be.

The assessor’s hands are tied in many ways, as the valuations must be made on market prices. There was some leeway, however, and some consideration for the fact that house values were likely not going up.

The typical assessment is 70% of the appraised value — that is, 70% of actual market worth — but the state allows towns to drop assessments down to 63% of appraised value, and in the case of Wilton, the assessments were made on a lower percentage.

Another misconception that seems to be out there is that assessments are indicative in some way of the coming taxes.

It is true that residents are taxed on the value of their property — 1 mill for every $1,000 — but it is wrong to assume that because assessments have increased taxes will as well.

Taxes are tied to the budgets more than to individual assessments. If everyone’s assessment goes up 31%, then on the same budget, the mill rate drops and taxes remain the same — with those below average seeing a drop and those above average contributing a higher share — what some would say is a fairer share.

The tricky number to get to in this revaluation year is exactly how much of the increase is due to actual growth, and not just to higher market valuations.

Last year the grand list crept up by just 1%. It can be assumed — perhaps not wisely, but assumed nonetheless — that since not much has changed and there’s really little room for increased development in town, that this year’s growth was also incremental at best.

If the grand list continues to trend at a relatively flat growth rate, then budget increases will be felt more significantly in coming years. Basically, when the grand list is growing at 2% or 3%, any budget increase at or below that level will result in a net flat tax increase, and a 5% budget increase will be reduced to a 3% or 2% net tax hike.

When the grand list stops growing, however, a 5% budget increase is in essence a 5% tax increase.

The challenge to come is not in how we get through this year, but in how we move forward in the years to come.

There are three solutions: The town and schools stop adding programs, services, staff and building projects; the town encourages increased development, both residential and commercial; or the town can continue to increase taxes.

It’s up to residents to decide which course we take.

© Copyright 2008 by Hersam Acorn Newspapers