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Flat Funding? Spreading Out the Pain? Norwalk Board Weighs Options Ahead of Budget Vote

The Norwalk Board of Estimate and Taxation during its budget review sessions this month.

Keep the budget the same as last year, phase in tax increases, find other areas to cut spending—these are among the scenarios Norwalk’s Board of Estimate and Taxation is weighing ahead of a vote on the budget scheduled for Monday, April 1. 

“I think we need to decide as a board are we comfortable with just a phase-in impact and the recommended budgets of 3.9% and 4% [increases for the city and schools]? Are we comfortable with a flat budget? And with a flat budget, do we want to add a phase-in on top of that?” Chair Ed Abrams said to the board on Thursday night. “From those two things we can then get to a vote on which approach we want to take. I don’t expect that we will reach consensus across the board. I don’t expect this to be a unanimous vote but I think those are the legitimate options in front of us at this point in time.”

Abrams and the board discussed various scenarios on how to try to mitigate the tax impacts many residents will face. The city went through a required property revaluation this past year, which saw large increases in value on the residential side and decreases on the commercial side, both due in large part to trends over the past few years. 

Homes in Norwalk sold at higher prices as demand increased, with many people looking to move to the city, especially from places like New York City, while office and retail spaces emptied due to remote work. That shifted the tax burden more onto the residential properties in the city, which is a large part of why tax bills are increasing, officials said. 

If the city budget were the exact same as last year, a scenario the Board of Estimate and Taxation is considering, residents across the city would still see an increase in their tax bills. According to data presented by Tom Ellis, Norwalk’s director of management and budgets, a flat budget would result in:

  • $1,178 increase in taxes for the median homeowner in the First Taxing District
  • $1,444 increase in taxes for the median homeowner in the Second Taxing District
  • $1,132 increase in taxes for the median homeowner in the Third Taxing District
  • $432 increase in taxes for the median homeowner in the Fourth Taxing District
  • $77 increase in taxes for the median homeowner in the Fifth Taxing District
  • $1,413 increase in taxes for the median homeowner in the Sixth Taxing District

Last year’s budget was nearly $423.7 million, or about $17 million less than the $440.6 million proposed for the coming year. Mayor Harry Rilling and Ellis noted that the proposed budget was mostly made up of contractual increases and obligations, so cuts to that would be impactful.

“There were a lot of wants that we pulled back on, including zero hires of extra people,” Rilling said. “There were a lot of things that people asked for that we said, ‘No, this is not the year for that.’”

Rilling said that on the city side, “some of the contractual increases are 2.35%.”

“Those are negotiations, so once you negotiate something, it’s hard to get any union to back down or to agree to a lesser amount,” he said. “These are challenging times. Inflation is out of control. And we saw what happened with the reval— that’s nothing that anybody could control, because the commercial side, the vacancy office rate, we’ve never seen anything like that in years.”

Many members of the board, however, said they felt that if they were asking residents to deal with some of this financial pain, the city should as well.

“I would say that if the city is asking a resident to find money in their budget, and cut their budget in order to fund city spending, the city should be able to do that as well,” board member Anne Yang said. 

Others said that in the business world, companies are often asked to deal with cuts and “find the money.” 

“I understand there are contractual committed aspects, but finding 3.9% or $6.5 million, while challenging, I don’t view as an impossible path that will dramatically impact the level of city service that will be felt negatively by those of us in the community,” Abrams said, in reference to keeping the city budget the same as last year. “I live in a corporate world and if I’m told I gotta go find $6.5 million out of my budget, I’ll find it and chances are I can do it without touching headcount—it’s not pretty, but to all the points raised, this is not a normal time.” 

Phasing in the New Property Values

In addition to looking at reducing the budget, the board is also weighing phasing in the property revaluation. Under state statute, municipalities that have undergone a revaluation can phase in the new property values over a two-, three-, or four-year period. Stamford is currently in the middle of a two-year phase in. 

The pros of a phase-in, board members said, would allow the “pain to be spread out” over a few years. On the con side, residents would automatically see a tax increase of 8 to 9% each year for the next four years, as opposed to dealing with the increase all at once. 

Using the $440.6 million recommended budget, Ellis showed that the tax increases this year without a phase-in would look like: 

  • $1,567 increase in taxes for the median homeowner in the First Taxing District
  • $1,830 increase in taxes for the median homeowner in the Second Taxing District
  • $1,605 increase in taxes for the median homeowner in the Third Taxing District
  • $829 increase in taxes for the median homeowner in the Fourth Taxing District
  • $590 increase in taxes for the median homeowner in the Fifth Taxing District
  • $2,554 increase in taxes for the median homeowner in the Sixth Taxing District

Using that same budget, but phasing the property values in over four years—an option the Board is considering—Ellis showed the first-year tax increase would look like:

  • $573 increase in taxes for the median homeowner in the First Taxing District
  • $644 increase in taxes for the median homeowner in the Second Taxing District
  • $615 increase in taxes for the median homeowner in the Third Taxing District
  • $367 increase in taxes for the median homeowner in the Fourth Taxing District
  • $334 increase in taxes for the median homeowner in the Fifth Taxing District
  • $902 increase in taxes for the median homeowner in the Sixth Taxing District

Yang advocated strongly for the phase-in, calling it a “bridge to the next revolution, where at the time the commercial market may have recovered,” so that way the city is not putting in tax increases “at the bottom of the commercial market.” 

Yang gave an example of a property owner who had a $10,000 tax bill and was facing a $10,000 tax increase, and what that could look like if it was phased in over a four year-period.

“I think people would rather—I’d personally [rather]—rather than paying $20,000 [in year one], next year you’re going to pay $12,250, $15,000, $17,250, and then $20,000,” she said.

But others, such as board member Ed Camacho, were skeptical about automatically building in these increases over the next few years. 

“It’s a big bite, but I think to get it done in year one and then get back to our usual, 3, 3.5% tax increase —I think is more hopeful than locking in an average of 9% tax increases, year in and year out for the next four years,” he said. 

Board member Troy Jellerette said that the city is in a “difficult situation.”

“I came from a corporate life,” he said. “You’ve seen it. It’s horrifying. They say, from the top down, ‘Projections didn’t come in the way we wanted, we want a 15% cut,’ and they tell each department, ‘You get it.’ I think we’re in a very difficult situation here. We’re trying to spread the pain as much as we can with the phasing, and with these anticipated discussions about flat [funding] and yes, they are painful decisions that have to be made. Is it something we are anxious to do? No, but it’s something I think we have to do in our fiduciary responsibility.”  

Next Steps

The Board will meet on Monday, April 1 at 6:30 p.m. There were a few outstanding questions, such as what it would look like to phase in a flat budget, that the board plans to get answered before voting on the proposed operating budget.

Comments

4 responses to “Flat Funding? Spreading Out the Pain? Norwalk Board Weighs Options Ahead of Budget Vote”

  1. John O’Neill

    For those officials who didn’t see these issues coming, shame on you. This should have been planned for long in advance.
    For goodness sakes, Norwalk doesn’t even have a freaking Full Time Tax Assessor. I’m not sure if they’ve even interviewed anyone.

    Maybe less time at construction site taking photos and more time planning would be the way to go….

    Lastly, when will the city be taking down any of the project signs congratulating politicians for spending our money??
    (After all it is our money) An idea for the future is to auction off names on signs. It would bring in needed revenue and actually
    credit a taxpayer for the work done…Those signs out there are hideous..If elected officials want trophies they should buy them.
    Heck, I recently saw a sign applauding a local politicians Uncles ..Really ??

  2. Bryan Meek

    We’d be lucky to get flat funding. Then maybe we could still only pay $1350 per garbage can like this council just did for ones you can get for about 1/4 the cost on amazon that do the same job. Give this crew any increase and they’ll figure out how to spend $1500 on them next year.

  3. David Muccigrosso

    Just for reference… a $10,000 tax bill would come out on a $582k house.

    Anyone who owns a house this expensive and claims poverty should be laughed at in their face, meanly.

    I *wish* I could afford a house like that. Instead, I’m paying my landlord’s mortgage for him. Cheers! It’s almost like the starter homes and condos have all been bought up, so there’s nothing left for anyone else.

    I’ve been here 6 years. Someone remind me again, how long does it take to become a “naturalized” citizen of Norwalk? How long does it take for my concerns to be taken seriously?

  4. John O’Neill

    @David: The odds are someone who owns a $ 582k house has a $ 480k mortgage, which means they have about $ 100k of equity. I wouldn’t call that wealthy.
    That monthly payment on that $ 480k is a heckuva lot more expensive that it was in 2019. On top of that, Norwalk Residential taxes are going up another
    couple of hundred dollars per month based on a revaluation that isn’t managed by a Full Time Tax Assessor? Really? I think you’re letting our elected
    decision makers off the hook too easily. That additional $150-200 in increased property taxes makes your purchase that much further out of reach.
    That’s not right. For those readers who are happy to pay add’l property taxes, please call me. I’ll be happy to share my pain.
    The bottom line is City officials have gotten used to the DC free money in order to fund programs that we couldn’t afford. It’s time to get back to basics.
    The lack of forward planning/thinking at the city level is pathetic. We’re owed an apology.

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