A Taxing Time

In this world, Benjamin Franklin noted, nothing is certain but death and taxes. But while no one knows when the Reaper will come calling, in Waterford the tax man comes knocking every year in July.

As of June 24, the town of Waterford had sent out nearly 20,000 envelopes containing property tax bills for vehicles and real estate. Payment is due by August 1, unless you want to pay a penalty. If you’ve opened that envelope, however, you’ve probably noticed that you’re already paying more than you did last year.

The tax rate—the amount of tax paid per dollar of assessed property value--has risen to 18.79 mills for fiscal year 2011/2012. That’s 4.1 percent higher than it was in the fiscal year that ended June 30.

“The mill rate can change each year, and generally it does,” says Waterford Tax Collector Mark Burnham. “The assessments on real estate don’t change until a revaluation, and this year that’s not being done, so any increase would be due to the 4.1 percent.”

Although property tax assessments haven’t changed since 2007, the grand list—the aggregate valuation of taxable property--has gone up steadily by 1 to 2 percent a year. “That’s been a stable move,” says Waterford Tax Assessor Michael Bekech. “Any gyrations in the mill rate are tied to the town’s need for money.”

Compared to other towns, Waterford relies heavily on taxes to cover the budget. The budget for this coming fiscal year adds up to $74,335,161, says Waterford Director of Finance Rudie Beers, and some $68 million of that will be raised through property taxes.

“Unlike other communities, we don’t have a whole lot of revenue from other sources,” Beers says. “92.7 percent of our budget is supported through current-year taxation. That’s huge.”

This year’s budget hike was primarily due to an increase in the town’s health insurance costs. “We’re a self-insured plan and the number and value of claims has gone up. We had to bring our plan level up to $9.5 million,” says Beers. “That was a significant increase to the budget.”

The phasing out of the systems benefit charge, however, also meant that additional revenue the town had been receiving from Millstone Power Plant—Waterford’s biggest tax payer--dropped by more than a million dollars. And when costs rise and revenue dips, Waterford taxpayers have to make up the difference.

But though the tax bill may be bigger this year, Burnham doesn’t anticipate any major problems collecting. Regardless of how they pay—with escrow, in person with checks or cash, by mail, or online with a credit card for an extra fee—99 percent of Waterford residents ante up when the bill comes.

In 2011, Burnham notes, the town needed to collect $66,008,005 in taxes to cover the budget. “What we collected was $65,364,469, so the collection rate was 99.3 percent,” he says. “The actual amount uncollected as of June 30 is about $642,000, most of which is real estate taxes.”

Some municipalities take a hard-nosed approach when it comes to dealing with delinquent taxpayers but Waterford isn't generally one of them. People who can’t pay the whole nut can make partial payments, Burnham says, and as long as they keep making those payments the town won’t take any enforcement action. It’s worth noting, however, that state law holds delinquent taxpayers accountable for 15 years.

Between now and the end of July, meanwhile, Burnham will be around to remind you when taxes are due. “I’m going to be putting a message out on electronic boards by the schools,” he says. “Don’t forget about August 1!”