Mill Rates Are Up But Taxes Are Down—How Did That Happen And Who's Going To Pay?

Last night, the Board of Finance set the mill rate, based on the approved budget for the next fiscal year, at 24.05 for the 2013/2014 fiscal year. That's an increase of 4.28 mills, which is a big jump. But don't panic, because that's not the end of the story.

If you're a homeowner, your taxes next year are likely to be less than you're paying now. How is that possible? Here's how First Selectman Dan Steward explains it.

"This is a revaluation year and we have recognized the difference in values from 2008 to 2013. There were decreases in the residential values of about 20 percent on an average. This will cause a large variation in our mill rate, since we still have to recover the tax portion of our revenue stream based on taxation of the properties."

Steward continues: "After many reviews of various properties, a resident with a property valued at $268,500 in 2008 and a value of $214,800 in 2013, which represents a 20 percent drop in value, will see a taxation change of almost nothing."

Indeed, in many cases, because the value of properties has decreased, the property taxes you're going to pay could be lower than last year. Here's the kicker—car taxes are going to be higher, so it's likely to be a wash.

"That same person may see the car tax increase, because cars are always at a current value," Steward explains. 

If you're a business owner, however, brace yourself. "The business-owned properties have stayed very flat in value, since they are kept at a current rate, rather than having a five-year variation," said Steward. "This does cause a shift in where our tax revenues come from."

In short, the increased mill rate—because it stemmed from an overall drop in the grand list based on the recent property revaluation—will have little impact on the average homeowner. It will, however, have a fairly significant impact on town-based businesses and on car taxes, because their value remained flat or increased. 

"Overall taxes have changed for almost everyone in Waterford with a change ranging from 0 percent to over 30 percent less in value," Steward says. 

But business owners can expect to pay more and car taxes are going up because those property values are unaffected by the revaluation and will remain the same or higher.  

"For those residents with very little change in value, the tax will be a much higher number," said Steward.