City property taxes due on August 1st reminds us that Norwalk is still a commuter city with housing accounting for 90% of our long-stagnant grand list. So the tax burden falls on homeowners whose property values have been falling in recent years in common with most of Connecticut. Especially in the Gold Coast. So what happens with another decade of tax hikes averaging four percent? Homeowner taxes will be about 50% higher. And it’s a good bet that with Connecticut’s economic problems building over recent decades our state economy will still be struggling. Housing prices too. So in another decade city median homeowner taxes will be about $10,000 annually. That’s more than mortgage costs for a median-valued home in our city. And not a good prospect for housing values. Across the Sound in Nassau County it’s not uncommon for homes valued around $400,000 to have property taxes exceeding $10,000. In some average-income communities, housing prices have remained pretty unchanged for several decades as taxes climbed to $20,000 and higher.
So what are our options? In a struggling Connecticut economy the prospects for substantially boosting the business portion of our Grand List are modest. The only realistic option to prevent further declines in city homeowner property values is severely restraining the city budget. And that’s going to be a major challenge with parents demanding the BOE continue to match salaries with the surrounding wealthy towns. City unions under our state’s generous arbitration statutes will certainly demand ever higher salaries.
Some will argue for adopting a professional manager. But in our one party city there’s not much enthusiasm for such a major change. And as long as our elected officials have modest business and management experience and avoid using professional search to secure top talent it will be very challenging indeed to restrain the city budget.
Norwalk will be in a tough spot over the next decade. And subsequently. The BOE’s recent demand for a $12.7 million budget increase really suggests our city needs to have some serious budget discussions. If it’s “business as usual” Norwalk will follow the sad path of Connecticut’s other once-vigorous cities into a path from which there’s no visible escape. Nassau County across the Sound provides a good example of how housing values respond to ever-higher property taxes.
Of course if one believes that all of Connecticut’s problems originated with Governor Malloy’s team then there could be a positive outcome. But the well-documented facts are that our State’s fiscal and economic problems go back many decades. And can’t be easily resolved. It may take another decade or longer to reverse course. So maybe it’s time to demand that our well paid city administrators do more with fewer resources. Or at least not get annual salary boosts for simply spending more money than the prior year.
Without some very major changes in how we do business in City Hall, Norwalk homeowners will face ever higher property taxes on falling property values. And few homeowners will retire here fundamentally changing the nature of our city. Making it even more transient as lower-income families taking advantage of lower housing prices displace higher-income homeowners. The real issue here is not focusing on changing our elected officials, but changing how we govern our city. That may well be the greatest challenge our city has faced in modern times. It’s a discussion we ought to begin.
Peter I Berman