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Proposed Norwalk operating budget: 2.2 percent tax levy increase, 1.4 percent mill rate hike

NORWALK, Conn. – A proposed $326.8 million 2015-16 Norwalk operating budget that carries the lowest incremental change in the tax levy in four years – a 2.2 percent increase – was presented by Finance Director Thomas Hamilton to the Board of Estimate and Taxation on Monday evening. It received kudos from both Mayor Harry Rilling and BET member Anne Yang Dwyer, who called it “hugely fiscally responsible.”

The bottom line was laid out in Hamilton’s PowerPoint presentation: 

  • $326,769,467 recommended budget
    • 2.9 percent overall expenditure increase:
    • 2.7 percent increase in education spending
    • 2.5 percent increase in city spending
  • 5.7 percent increase in debt service (city & BOE)
  • 2.2 percent increase in total tax levy
  • 1.4 percent average mill rate increase
  • Fourth District mill rate increasing by 1.2 percent and median single family 4th District taxes of $6,523, an increase of $57, or .9 percent

Hamilton’s budget is online; an excerpt, referred to by Director of Management and Budgets Bob Barron as a “great summary,” is attached below. “It has a great level of detail with regard to trended grand list growth, detailed expense growth and detailed revenue growth,” Barron said, encouraging BET members to read it.

In it, Hamilton writes:

  • “The recommended budget represents an austere spending plan that limits overall spending to an increase of $9.2 million or 2.9%. Reducing expenditures to this level has been a major challenge, given the fact that the city faces structural expenses which are rising in certain key areas: Wages and Salaries for settled contracts, reserves and new positions total $1.8 million or 3.8%, and Debt Service costs are increasing $1.5 million or 5.7%.”
  • “If the departmental requests totaling $328,620,752 were approved unaltered, it would require a $9.3 million or a 3.2% increase in the tax levy. Mayor Rilling advised me that he could not support a tax levy increase of 3.2%. In formulating my recommendations, my objective has been to maintain essential services, and reduce the tax levy to a level that is affordable to Norwalk’s taxpayers.”

“We sent out the budget package with a mandate perhaps that the department heads do everything they can to come within a 2 percent increase,” Rilling said. “That included, as we know, the police department’s three 2 percent pay raises factored in really showing up at the end of the third year. Other contracts had all been negotiated at around 2, 2¼  percent. When they sent in their requests they did really a good job.

“I mean, there were some increases,” he said,  “but Mr. Hamilton and Mr. Barron brought back to me what I consider to be a good budget where we were able to make some good decisions and shuffle money around and fund the programs and other things that we felt were priorities and needed to be funded while still keeping the tax levy down.”

The tax levy and average mill rate have gone up every year, according to a chart provided by Barron (attached below).

In 2011, the average mill rate went up 2.8 percent; in 2012 it went up 3.7 percent and in 2013 there was a big jump linked to the revaluation, an 11.8 percent hike to compensate for the drop in the grand list. This proposed budget carries with it a 1.4 percent increase.

The tax levy went up 3 percent in 2011, 3.6 percent in 2012, and a 3.2 percent in 2013. This proposed budget carries with it a 2.2 percent increase in the tax levy.

Rowayton would see the largest mill rate tax increase, a 1.89 percent hike. The composite tax rates are based on the October 2014 grand list:

  • First District: 25.352, a 1.24 percent increase
  • Second District: 25.352, a 1.24 percent increase
  • Third District: 25.352, a 1.24 percent increase
  • Fourth District: 25.410, a 1.24 percent increase
  • Fifth District: 24.688, a 1.48 percent increase
  • Sixth District: 22.848, a 1.89 percent increase

A mill is equal to $1 of tax for each $1,000 of assessment. To calculate the property tax, multiply the assessment of the property by the mill rate and divide by 1,000.

“I would like to commend the mayor and the finance staff for coming in with a very reasonable estimate of a tax levy increase, which is, and I think is the right way to look at it, the ultimate dollars out that a homeowner has to pay,” Yang Dwyer said. “It is a very close to the proxy of inflation.”

You can look at inflation as being 2 percent, she said, and factor in that Social Security benefits will increase 1.7 percent for Norwalk’s seniors on a fixed income due to the cost of living adjustment.

“This is definitely in a great direction in terms of being hugely fiscally responsible as well as being very competitive compared to our neighbors, which allows our real estate values to increase if we have a competitive tax system,” Yang Dwyer said. “That is a positive investment cycle because if our real estate values to increase then it makes our grand list increase.”

Rilling said keeping the tax levy down was important “in order to stop overtaxing our seniors, to make sure that they can at least have some relief.”

“I still believe that the property tax method is a very regressive tax and very antiquated,” Rilling said. “Of course, in Connecticut, it is very difficult to find another way of taxing because we don’t have county government, we have municipal government. But still there’s got to be a better way to tax people rather than the regressive property tax. I know the Connecticut Conference of Municipalities is very high on that and I am keeping in very close touch with them to try to figure out if there is not some way we can get some tax relief, especially where it comes to school budget financing and so forth when we get so little compared to some other cities for each student that we have. Again, kudos to Mr. Hamilton and Mr. Barron for working what I consider their magic and trying to keep things down.”

Hamilton will present his proposed budget to the Common Council tonight. The Council will set a spending cap later this month and the Board or Estimate and Taxation will then comb through the budget to meet the Council’s figure. The final budget is due in mid-April.

 

Barron chart

Hamilton’s budget letter 

Hamilton’s budget Power Point 

Mill rates

Comments

28 responses to “Proposed Norwalk operating budget: 2.2 percent tax levy increase, 1.4 percent mill rate hike”

  1. John Hamlin

    Why not flat or down, like most taxpayer’s incomes and most corporate budgets?

  2. Non partisan

    Norwalk competes with neighboring towns for home owners and business

    Stamford- 23.73
    Westport- 17.94
    Darien- 15.01

    The average homeowner has a defined budget for mortgage and taxes. Increase taxes= decreased amount you can mortgage= decreased home values. It’s all simple math and economics.

  3. Sassy

    Lets not forget to add the extra $350,000.00 for the unnecessary advancements to the Police Dept.

  4. Amanda

    This may be a silly question – but where exactly is the 4th taxing district border line? Is it just the sewered portion of the 5th district? This map is unclear.

    http://www.norwalkct.org/DocumentCenter/View/4745

  5. LWitherspoon

    A 6.9% increase in spending for police? Is that the payback for the police union endorsing Mayor Rilling?

    Why is it that many other City employee bargaining units have had wage freezes, but the police haven’t?

  6. Taxpayer Fatigue

    Great job on holding down the city budget! A difficult job when their are union contracts involved. I still think that the BOE increase is too high but at least it is down from their usual $6-7 million.

  7. EveT

    I honestly don’t see why “only” 2% is something to celebrate. Raising spending 2% a year equals 20% in 10 years, not counting the compounding that happens when you take the current year’s baseline as the zero point of your % increase.
    How many Norwalk residents are earning 20% more now than they were in 2005?

  8. Mike Mushak

    Bravo to Mayor Rilling, Tom Hamilton and Bob Barron, and the BET! This is a “hugely fiscally responsible” budget as BET member Anne Wang Dwyer described it. As she also said, the 1.4% increase in the mill rate is below the average inflation rate of 2% and the Social Security cost of living increase (COLA) rate of 1.7% for 2015.

    The “Barron chart” Nancy linked to at the bottom of the article says a lot, especially the last column which is the tax levy shown over the last 8 years, which averaged a 3.8% increase over that time period since 2006. . This proposed tax levy of 2.2% is the second lowest in those 8 years (the lowest was 2% in 2010 at the height of the recession), but is 58% lower than the 8 year average increase of 3.8% since 2006.

    Interesting to see the difference between the Hour headline today above the fold which declares in bold type a 2.9% increase in the budget, and NON’s headline which more accurately reflects the increase in the tax levy of 2.2% and the mill rate of 1.4%. On first glance of the Hour headline by some folks it might appear like taxes may go up 2.9% instead of half that rate at 1.4%. I am sure it wasn’t intentional.

  9. anon

    Kudos to Norwalk’s finance department’s powerpoint. Wells doesn’t get a reduction in services.

  10. Ryan

    How about a spending freeze?
    No new taxes…
    Period.

  11. Mike Mushak

    EVET. I see your point, but as an owner of a large historic home in South Norwalk, the increase this year for me and my partner equals about an extra 40 cents a day, or $12 a month, or $144 per year. Many of the smaller homes in our diverse neighborhood of property values and demographics might see half or a third of that increase, or 15 to 20 cents a day, and many condo owners may see an increase of perhaps 10 cents a day, as in a single dime.

    As a small business owner, I have not enjoyed the wage and benefit growth of the public sector over the last 7 years of the depressed economy, and I can certainly relate to your point. It is frustrating to see some folks get guaranteed raises every year and still complain that they aren’t large enough. I want to suggest they try the private sector for awhile to get a good dose of reality like the rest of us!

    But all things considered, the extra 40 cents a day isn’t going to break me, nor do I think the extra dime a day for many condo owners will as well. . If I was on a much more limited income I might have to make some lifestyle changes to save that money, but honestly I can’t see any huge impact this increase will have on most residents especially since essential services, infrastructure investments, and our schools remain well-funded which helps protect our property values and our quality of life.

    There is always room for improvement, especially in the professional planning area where we all know we are sorely lacking as a city. And we need a City Manager to handle the day to day coordination and management of departments. But despite that we are trending in the right direction, and that includes the current efforts of Mayor Rilling and past efforts of mayors including Knopp and Moccia, who helped to rebuild our schools, parks, Police and Fire headquarters, and increase infrastructure investment including our treatment plant, sewers, repaving and repair of roads and sidewalks, and now an investment in early childhood education and paying down our debt service.

    It seems to me that in Norwalk, the glass seems half full now instead of half empty. Now about that lack of professional planning….

  12. Big Tex

    No celebration please – this is embarrassing. Any increase in mill rates will again punish property values and again disparage Norwalk as the “Bridgeport Junior” of lower Fairfield County (aka highest mill rates / lowest school rankings). With most household incomes and property values stagnating or dropping where is the genuine sacrifice? Are elected officials at the service of the unions/BOE? Pretty obvious what the answer is.

    They just don’t get it. And now citizens are being hood winked into supporting a shopping mall with negligible due diligence or supporting analysis. . . Bridgeport like mill rates here we come.

  13. Satisfied, But Scared….

    I have to say, I’m happy with the minimal tax increase, I’ll give the Mayor that.

    I also tend to agree with Big Tex, as I’m scared to see Norwalk as a sister to Bridgeport.

    I’m all about spending cuts, that’s why I was being so hard on Michael Mushak and his ridiculous vision of a heated staircase and the trail, to name a few.

    Michael, the one thing that I don’t like is the fact you are so nonchalant about the taxes being so inexpensive. There are clearly people who are struggling here in Norwalk and because you may be in a comfortable financial position, many aren’t. Perhaps you could supplement a couple families who are struggling?

  14. Bill

    We gave the city and its unions increases of:

    4.6% in 2006
    5.4% in 2007
    4.9% in 2008
    3.8% in 2009

    and yet we are supposed to pat ourselves on the back for a 2.2% increase?

    We should have clawback measures just like the liberals are demanding from Wall street during the boom years. Lets clawback some of those outrageous pay raises and benefit gifts we gave the municipal unions. We can’t afford it.

    Disgrace that some are making $150,000+ to sit in a city office and retire in their 50’s while we have elderly people here that had to deal with 5.4% property tax increases a few years back, and now they have the pleasure of paying these people another 2.2% next year.

    Do you municipal employees have no shame?

  15. Mike Mushak

    I did not say taxes were inexpensive here, did I? Where exactly did I say that? I said that an increase of a dime per day for a typical condo owner would likely not break anyone. I also sympathized with anyone on a fixed income who might not be able to afford the dime per day increase.

    I wish we didn’t have to pay any taxes. Send me your name and address and I’ll gladly make a contribution towards your tax increase.

  16. Satisfied, But Scared….

    “equals about an extra 40 cents a day, or $12 a month, or $144 per year.” – It’s suggestive that it’s chump change.

    $144.00 means the world to many people. And I’m all set with my taxes, thanks.

    Do you see now that a ridiculous staircase and trail can eat up taxpayer’s money? Why? All to accommodate your bizarre vision that it’s worthy and for your neighborhood’s ‘benefit’?

    Those saving could be placed someone, which leads to less taxes.

  17. John Hamlin

    Increases in taxes should not reflect the wish list of the government class — ie, the public employee unions and the politicians who serve them. Tax rates should first and foremost reflect necessity and the ability of taxpayers to pay for an increase. Who needs the money more, the taxpayers, whose average income is down in the last decade, or the public employee unions with their constant year over year increases regardless of the economy and the impact on taxpayers. I say it’s time the taxpayers were considered and accommodated. No increase this year or any year until the taxpayers can keep up with the public employees. It’s neither fair nor necessary.

  18. LWitherspoon

    @EveT

    Right on. The past five years featured the most difficult economic times since the Great Depression. Now that we’re well into a recovery, 2.2% is nothing to celebrate, unless you’re trying to put a good spin on a mediocre outcome for political reasons.

    Notice how the spinners also talk about the proposed tax hike in comparison to the average inflation rate. They have to drop the word “average” in there because the actual inflation rate published by the US Government for 2014 was 0.8%, well below the proposed tax hike.

  19. Taxpayer Fatigue

    Wow! None of you said squat when the BOE announced their $4 plus million budget increase. No partisanship here, is there?

  20. Non partisan

    Like I said this am. If Norwalk has the highest mill rate of the surrounding communities it will automatically have lower property values. It’s math.

    Municipal governments are a buisiness. They provide police, courts, social services, recreation, and public education. Some municipalities do this efficiently. The better the schools and services at the lesser mill rate gets higher property values. Norwalk doesn’t. The mill rate proves it. Therefore any increase in the mill rate is unacceptable.

  21. anon

    Summary, taxes are going up to pay for no reduction in services. Peddling in place.

  22. Mike Mushak

    Rilling decreased the last 8-year average tax levy of 3.8% by 58% to 2.2%, and a few folks are complaining here that it is isn’t a big enough decrease. What a demanding crowd!

    LWitherspoon, regarding the inflation rate, you are reading an apparent typo on the website:

    http://www.usinflationcalculator.com/inflation/current-inflation-rates/

    Scroll down to the the chart shown. The 0.8 percent inflation rate was in December only based on the drop in oil prices, but the average inflation rate for last year in total as shown on the chart was 1.6%. The average over the last 16 years was 2.2%.

    I may be wrong but it looks like the chart does not match the text. Not sure you care but just thought you might be interested.

  23. anon

    @Mushak overall costs are down because education costs are down, thanks be given to the departed Rivera, no credit to Rilling.

  24. Townie

    I’m confused. Shouldn’t the goal of the city and its finance people be to obtain a neutral budget?

  25. LWitherspoon

    @Mike Mushak

    The monthly numbers you’re citing each cover the prior twelve-month period. Therefore the 0.8% inflation rate for December, which I cited, reflects the inflation rate for the period January-December 2014. Seems more reasonable to me to use the most recent twelve-month period, but whatever your preference, the inflation number is still lower than the tax hike. It’s also worth noting that due to the extraordinary economic downturn our yearly tax hikes have exceeded inflation for far too long.

    @Taxpayer Fatigue

    There is a broad sense that the BoE, led by Mike Lyons, is working hard to contain costs. Each week we seem to read about some new cost-control effort on the BoE’s part. In-sourcing special education, outsourcing custodians, going to arbitration with the teacher’s union, and so forth.

    By contrast, I haven’t seen evidence of any remarkable efforts by the Mayor to contain the City’s most significant costs. There was a police contract that contained wage hikes. There was an article about using energy efficient light bulbs in City buildings – good, but not exactly the stuff that game-changing savings are made of. I think that’s why there’s an outcry. If the Mayor has undertaken some special initiatives that are helping hold the line on taxes he should by all means reveal them.

    It’s worth nothing that some portion of City employees are under contracts negotiated before the Mayor took office. It would be interesting to know to what extent those contracts are contributing to the tax hike, if at all.

  26. piberman

    Worth remembering that the Mayor’s refreshing proposed budget largely reflects the cost containment and budget efforts of the BOE under the leadership of Mike Lyons. Without continued budget containments by the BOE the City budget cannot be constrained. Some wonder what a commensurate effort at City Hall with new department heads and more rigorous budget constraints might yield. One would hope that demonstrated budget restraint at City Hall would encourage similar behavior at the BOE rather than vice-versa. We ought to call the current budget the Rilling/Lyons budget.

    One argument for even lower tax hikes is that reportedly City residential values are where they were in 2003, City single family housing prices declined about 5% in 2014 and its likely City incomes remained unchanged in 2014. As in years past City employees are paid substantially above City median household incomes. Would that they return the favor by actually living in the City that rewards them so generously.

    Norwalk’s future is hardly promising if single family residential homeowners can expect continued tax hikes without any real prospects of property appreciation. That’s the scenario that doomed both Bridgeport and New Haven. We’re not far from the 2% “tipping point” where property taxes exceed 2% of market value. All the more reason to encourage use of our vacant land for high valued high tax high income purposes rather than retail. But our politicians think otherwise.

  27. MikeBarbis

    The BOE is definitely continuing to do its fair share here … we represent over 50% of the City’s budget and are the City’s biggest employer … all of our employees are covered by union contracts which have annual increases …As the former BOE Finance Chair, I can tell you that we have worked hard to finally manage the BOE’s budget … which has been the main reason the City’s budget has been so under control these last several years.

  28. piberman

    Strange how the “cheering chorus” omits the obvious. The BOE’s fiscal restraint, not the foilks in City Hall made it possible for the Mayor to propose a 2% tax hike. Why the refusal to acknowledge the role of the BOE here ?

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