Ridgefield voters overwhelmingly approved the 2023-2024 budgets, including the Town, the Public Schools, and capital. Sound financial management resulted in the overall average property tax increase being just 1% over the fiscal year that is coming to an end on June 30th. Voters recognized that the budgets succeeded in controlling spending, an excellent result in light of overall cost trends.
The new mill rate of $25.81 per $1,000 is based upon the new Grand List of taxable property value as of October 1, 2022. The Grand List rose by 2% over the past year due principally to new building construction and additions to existing buildings. This growth in the tax base offset a portion of the increase in revenues required by the approved budgets, thus enabling the Board of Finance to unanimously set the new mill rate that provides for an average increase in taxes of 1%.
This year, because of the state-mandated property reassessment that occurs every five years, the amount of actual tax increase for each taxpayer can vary in its effect depending on how individual property valuations changed over the prior five years since the last re-evaluation.
All property is assessed, by law, at 70% of its actual market value at the time of each re-assessment. For example, a home valued at $720,000 in 2017 would have had an assessed value of 70% of that amount, which is $504,000. At the mill rate of $28.43 per $1,000 of assessed value, that home had an annual property tax this past year of $14,329.
Over the ensuing five years, the value of properties in town generally rose, with the overall average being 11%-12%. This aggregate valuation change in the Grand List gets factored into the mill rate calculation, so even with increases in budgets this year, the mill rate used to calculate taxes actually decreased, from $28.43 to $25.81.
So if the home in our example was re-valued on October 1, 2022 at $800,000, its new assessed value (at the 70% level) would now be $560,000. This means that the new tax on that home will be $14,454, roughly a 1% increase.
Note that the overall change in property values from 2017 to 2022 of 11% to 12% is simply the average. Some homes rose by more and some by less. For homes whose values increased by more than 12%, the property tax increase for next year will be more than 1%. And for homes whose values grew by less than 11%, their property taxes will increase very slightly or may actually decrease next year.
For 2022, the relative changes among valuations for different properties across the Town were substantially less pronounced. Still, the result of the new assessment produces variable results, as it always does. Since 91% of the dollar total in the Grand List consists of real property, the increase in the total value of the Grand List was driven by the increase in real estate values.
One bright spot for many taxpayers is the motor vehicle tax. Because the rise in home values resulted in a lower mill rate, that means that our lower mill rate applies to cars too. For example, a car valued at $25,000 on October 1, 2021 would have had an assessed value of 70% of that amount, which is $17,500. At this past year’s mill rate of $28.43, this resulted in a tax of $498. This year, a car valued at $25,000, which has an assessed value of $17,500, will have a tax of $452, because of the lower mill rate of $25.81.
The authors, Dave Ulmer and Joe Shapiro, are members of the Ridgefield Board of Finance. Mr. Ulmer is the Chair of the Board.
Note that the views expressed here are solely those of the authors and do not necessarily represent nor have they been endorsed by the other members of the Board of Finance.
The views expressed here belong solely to the author and do not necessarily reflect that of HamletHub.