Report by Bill Generous – Windsor CT – 06/12/07

Nine towns will have town budget referendums this week.

West Hartford:

West Hartford budget voters will consider a 3.5% spending increase that will increase home taxes by 6.6% unless you are among the fortunate few homeowners with a home assessment increase less than 25%. The current year tax levy of the town is projected to increase by 1.9% and the effective tax rate increase (*- see below at the bottom of the report for technical note) would be less than that due to non-revaluation related grand list growth.

The West Hartford Town Council chose to phase in revaluation over 5 years. No other town in Connecticut is implementing a revaluation phase-in quite like West Hartford. For comparison purposes, East Hartford’s fully implemented revaluation only tax effect on citizens was over twice as large as West Hartford’s, but East Hartford is phasing in their revaluation over only 2 years. East Hartford moderated the revaluation tax impact on citizens by implementing a spending decrease. On the first vote this budget season, 78% of referendum towns undergoing revaluation have had their budget rejected by voters.

Spending and tax changes aren’t the only things being considered by referendum voters. West Hartford citizens as a whole pay a higher portion of their income in property taxes than most other towns in Hartford County. Citizens receive many services in return. As usual, a budget referendum will provide a reality check on the level of services people are willing to pay for with their tax dollars.

If at First You Don’t Succeed…

In Sprague, the town budget referendum failed by a large margin. Now Sprague will have a budget vote in a town meeting instead. Voters in Sprague rejected an 8.3% tax rate change last time. The voters consider a 2.2% spending increase this time and it carries a 7.7% tax rate increase. After a budget referendum, town meetings usually offer a better chance of budget approval than having another budget referendum. Switching to a town meeting approval method is really never about the cost of referendums, it is about trying to get a budget approved.

Last Week in Westbrook:

By over a 2 to 1 ratio, voters in Westbrook approved a 6.6% spending increase that carried an effective tax rate change of 7.2%. The tax increase for all homes combined will be 16.0% and the effective tax rate increase for all homes and motor vehicles combined will be 12.1%. There may be some surprises when those residential tax bills are mailed out. Because of the revaluation tax shift, citizens had to carry an additional 4.6% tax increase than they otherwise would have (1.0464 = 1.1213 / 1.0716). Don’t expect the Westbrook shopping outlets to lower their prices with their revaluation tax shift savings anytime soon.

Town Budget Referendum Schedule This Week:

Monday, June 11: Sterling

Tuesday, June 12: Bolton, Brookfield, Hampton, Preston, Tolland, and West Hartford

Wednesday, June 13: Lisbon

Thursday, June 14: Cromwell

Total Annual Spending Increases for This Week’s Town Referendum Budgets:

Bolton (3rd vote): 5.4%

Brookfield (3rd vote): 4.6%

Cromwell (4th vote): 2.7%

Hampton: 3.5%

Lisbon (2nd vote): 6.2%

Preston (2nd vote): 4.8%

Sterling: 12.9% (but with a 2.3% projected tax rate change)

Tolland (4th vote): 6.2% (same as the 3rd vote)

West Hartford: 3.5%

Note: Regional School District spending, if applicable, is included in the total spending increases above and below. The annual spending increases are generally based on changes between this year’s proposed and last year’s approved referendum amounts. Comparisons are not made to the Current Year budget that may reflect additional appropriations during the budget year and are therefore not annualized changes.

Last Week’s Voting Results:

Cromwell (3rd vote): 52% rejected the municipal portion of the budget and a 2.7% spending increase for the total town budget (the education portion of the budget was previously approved)

East Windsor (2nd vote): 57% approved a 7.4% spending increase that carries a 0.4% tax rate change

Griswold (2nd vote): 58% rejected a 2.3% spending increase

Monroe (5th vote): 51% rejected a 4.1% spending increase

Newtown (4th vote): 54% approved a 4.7% spending increase

Prospect (2nd vote): 55% approved a 5.8% spending increase that carries a 2.2% tax rate change

Salem (2nd vote): 54% approved a 2.3% spending increase

Vernon (3rd vote): 56% rejected a 3.6% spending increase

Watertown: Voters approved a 5.3% spending increase that carries a 0.0% tax rate change (72% approve the municipal portion of the budget and 73% approve the education portion of the budget)

Westbrook: 68% approved a 6.6% spending increase

Woodstock: 55% approved a 6.1% spending increase

This Year’s Referendum Summary Statistics:

78 towns will have at least one official town budget referendum this year (East Hartford and North Branford are not considered official due to not meeting minimum voter participation requirements).

42% (31 of 73) of town budget referendums have been rejected on the first vote to date, down from 54% (41 of 76) last year.

20.4% is the voter turnout for all town budget referendums combined. As usual, Bolton budget battlers have the highest percentage voter turnout. Slothful Simsbury citizens produced the lowest turnout for an official town budget referendum.

In a same town comparison of referendum towns without revaluations this year or the prior year, median approved tax rate changes are about 1% less this year than last year (2.79% versus 3.74%). The median spending increase for that same 32 town comparison is also down about one-fifth of percent compared to the prior year (5.37% versus 5.55%). For all 51 referendum town budgets approved to date, the median spending increase is also about one-fifth of a percent lower this year compared to last year’s spending increases for those same towns (5.29% versus 5.52%).

Last Year’s Referendum Summary Statistics Review:

The median and total effective tax rate change for all 76 towns that had at least one town budget referendum last year was 3.2% and 3.5% respectively. The median as well as total current year tax levy increase for those 76 towns was 5.8%. The median as well as total spending increase for those towns was 5.4%. (Statistical Clarification: When calculating the median effective tax rate change of the 76 towns, the median of the aggregate tax rate change for that town is used [i.e. it is not the median of the town’s median tax change]; Total represents all 76 towns combined.)

For all 169 towns, the total effective tax rate change and total current levy increase last year was 3.9% and 6.1% respectively. While last year’s referendum towns had lower tax changes than non-referendum towns, over the last four years, there has been very little difference in the tax changes as a group between budgets adopted via referendum, town meetings, or elected officials. However, within a given town, tax and spending changes adopted via referendum tend to be lower than other budget adoption methods.

Bill Generous

Windsor, CT

(*): Technical note: The effective tax rate change is the same with or without revaluation, and it can be measured by the projected change in the mill rate if revaluation was not implemented. The West Hartford effective tax rate change and fully implemented revaluation only tax increase on citizens (residential real estate + motor vehicles) is dependent on non-appreciation growth in the net taxable grand list. West Hartford officials have not publicly released such a figure, nor have they released how much business real estate is appreciating in total for the first year of the revaluation phase-in. If the non-appreciation growth this year is 0.9%, the effective tax rate change for West Hartford would be 1.1% and the fully implemented revaluation only impact on citizens would be a t ax increase of 4.3%. If non-appreciation growth was 1.7%, the above figures would be 0.3% and 5.1% respectively.