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Barron provides SALT info

Norwalk Finance Director Bob Barron.

NORWALK, Conn. – There are 3,866 Norwalk residential taxpayers who are potentially affected by the recent change to federal tax law to limit SALT deductions to $10,000, Finance Director Bob Barron said.

That’s from a total 21,241 taxpayers and based on the 2016 Grand List used for Fiscal Year 2017-18, making it 18.2 percent of Norwalk taxpayers.

The GOP-led Congress in December passed a tax reform bill that puts a $10,000 limit on the deduction for state and local taxes (SALT). Mayor Harry Rilling and the Common Council expressed concern for Norwalk citizens as they set an appropriations cap recently, saying that Norwalk’s taxpayers are already under duress.

Tax Collector Lisa Biagiarelli, responding to an inquiry from NancyOnNorwalk, said she couldn’t estimate what percentage of taxpayers are affected by the feds’ SALT deduction move.

“You can look at tax bills but you don’t know who itemizes, you don’t know how many properties any one individual taxpayer may own; you have taxes in names other than personal names … no way of telling,” she wrote in an email.

She couldn’t go through the computer and come up with an estimate because, “My data does not distinguish between ‘types’ of real estate – for example, office building, single family residence, strip mall, garage, boat slip, vacant land etc.  All I have is an assessment and values for land and buildings if any.”

Tax Assessor Michael Stewart said an assessed value of $555,000 would generate a tax bill of about $10,000, but, “other questions are best directed to the Tax Collector.”

Barron asked Norwalk’s IT programmer to extract the information from the database “as there are no canned reports that generate this easily.”

The 3,866 residential taxpayers who pay more than $10,000 a year in property taxes generate $65.8 million in tax revenue, and average $17,015 per taxpayer, he said.

Barron said he’s not a tax advisor and does not know the net impact of the changes but, “For example, a person that pays $10K in state income taxes and $10K in property taxes in 2017 would be able to deduct $20K from their taxable income and in the current 2018’s tax code will be limited to $10K; however, it’s hard to say if the new tax code will generate more or less taxes due to the standard deductions that have increased substantially.  The tax impact will vary greatly depending on your income level, prior versus current available deductions, marital status and number of children.”

7 comments

Sue Haynie April 12, 2018 at 6:37 am

The City of Norwalk did NOTHING to help its SALT-affected taxpayers.

The Norwalk Tax Collector’s Office had one person who handled SALT taxpayer requests, only that person could even ‘fax’a form to a bank/escrow agent. But yet, no information was collected, no expedited process offered, no contact person provided to taxpayers who were negatively affected by SALT and double paid their taxes.The process for asking for a refund is onerous and wasn’t adjusted for the vagarity of SALT.

The taxpayer funds for double payment are held in Norwalk’s general fund, NO INTEREST IS BEING PAID. Taxpayers will get their SALT double payment refund when Norwalk gets around to it.

One would think that with some of the highest taxes in America, Norwalk taxpayers could expect better service when an exceptional event like SALT, affecting 20%+/- of their taxpayers, happens.

Piberman April 12, 2018 at 9:51 am

The proper way for City officials to express their “concern” for taxpayers is to make major steps on improving City management to create affordable budges. Two good steps would make Administrator raises dependent on demonstrating cost savings – doing more with fewer resources. Second, end the embarrassing refusal of always (yes always) avoiding using Professional search to secure Top Talent for the City in favor of “friendly hires” acceptable to our public Unions.

Is it beyond the ability of the Mayor to assemble a team known for their capable efficient management of City tax funds. That few City administrators ever get hired away by other towns and cities seeking top talent speaks volumes. As do our declining property values, exodus of homeowners and influx of renters.
Prospective homeowners are sending a major signal to Norwalk – we’ll pass you by.

Who wants to buy a home that’s overtaxed and declining in value. Building more apartments whose owners don’t pay their full share of City expenses doesn’t solve the problem. Just the reverse.

Debora Goldstein April 12, 2018 at 5:03 pm

Time to move to outcome based planning and budgeting. Taxpayers determine the price they will pay for services and set the priorities. Departments will bid to provide services at the best price while meeting the priorities. No more decisions in a vacuum.

Council will know what developments cost in services and what revenue they bring in. Taxpayers will decide on funding schools, parks and other services vs incentives for projects.

In this day and this economy, we need to start squeezing $1.15 worth of service out of a $1.

Mitch Palais April 12, 2018 at 7:08 pm

It’s time for zero based budgeting. Every year -every department head should justify every dollar requested. Not just a tack on to last years ask.

Salt- what we are witnessing is a decision by the “red” states to no longer subsidize Blue state policies. We can reduce our property tax burden ( and salt impact) by

-1 enforce zoning and eliminate the scourge of illegal apartments
-2 Allow sono to be gentrified
-3eliminate any more subsidized housing requirements until we get back down to the 10% goal
-4 eliminate our sanctuary city policies that have swollen our school enrollment and significantly increased spending on ELL and SPED programs.

Bryan Meek April 13, 2018 at 6:13 am

How embarrassing. It takes about 2 minutes to look up IRS data on this topic.

https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-statistics-2015-zip-code-data-soi

Click on CT. Every single income tax form line is presented

In 06851 14,390 tax returns were filed reporting $1.24 billion in income. These filers deducted $56 million in state and local income taxes.

If someone wants to they can add the other zip codes together, but I guess its better to speculate wildly so you can scare people into thinking we can’t afford to fund certain things.

Debora Goldstein April 13, 2018 at 4:04 pm

Zero based budgeting is what we do now. It’s not good enough. Prioritizing scarce dollars means that our budget has to follow our planned priorities and common council members need to know what those priorities are before handing out tax incentives to developers or setting up TIF zones, or approving additional personnel.

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