Council considering phase-in of tax increase
By Kym Soper
VERNON - Saying older residents can't afford a dramatic tax hike all at once, Republican council members are pushing for a graduated phase-in of the property revaluation.
Property values rose significantly after revaluation was completed this year with the 2006 grand list soaring upwards of 41 percent. For many, real estate values swelled by more than 50 percent, as the tax burden shifted from commercial to residential.
According to town finance office calculations, property taxes are expected to rise on average $800 for most homeowners.
Low interest rates and a vigorous real estate market caused property values to mushroom in recent years. Commercial properties also increased, but not quite as severely, which accounts for the shift in tax burden, town officials say.
State statutes allow municipalities to gradually phase in assessment increases resulting from a revaluation for up to five-years, a practice that is being employed in Manchester and is being considered in Enfield.
Democratic Mayor Ellen L. Marmer has said she is against a phased-in approach, as many residents want it done "in one fell swoop." Also, a phase-in would cost the town more in the long run, and adversely affect the town's bond rating, she has said.
"If it affects three quarters of the people like the way I think it does, then we're absolutely going to do it," Deputy Mayor Jason L. McCoy, a Republican, said of the phase-in plan. "We want to see a few more numbers run, but it's probably something were going to have to do to deal with her spending spree."
Town Assessor David Wheeler, who presented the latest figures on the Grand List and revaluation to council members Tuesday, said a phase-in would have limited value. The tax rate would have to be raised in order to make up the loss of tax revenue to fund the budget, he said.
Taxpayers would still have to make up the estimated $9 million shortfall in the mayor's proposed $75.7 million budget, he said.
"But what they won't get is the sticker shock of $800 as opposed to a $300 tax bill this summer," Republican councilman Daniel E. Anderson said. "I'm concerned about the elderly, who didn't get an $800 increase in their income."
Republicans, who are in the majority on the council, say a phase-in would also delay the shift in the tax burden from commercial to residential, making businesses carry the load a few years more.
"Somebody is walking away from this with a huge paycheck," Republican councilman Daniel Champagne said, referring to commercial businesses and industry which, due to revaluation and new state regulations regarding tariffs on equipment will see their taxes stabilize or go down.
"We're making it very difficult for retired people to remain in this town," Bill F. Campbell, Republican council member said.
Wheeler agreed that a phase-in would stave off the shift from business to residential.
But Democratic councilwoman Marie Herbst countered by saying a phase-in wouldn't change tax bills as much as Republicans believe it would.
"Phasing in really doesn't give you the big bang for the buck you think it will," Herbst told council members. "People are thinking they are going to be saving hundreds of dollars and that's just not true. The only way a phase-in would be effective is if you were to hold the line on spending to this year, but then you'll be faced with some very serious choices."
A phase-in would cost the town $15,000 in computer software and overtime expenses, Wheeler told council members.
Marmer thanked Republicans for not pushing the issue to a vote Tuesday, as "there's a lot of information here to digest."
McCoy said today that Republicans had to fight to get the discussion on the table and have no intention of backing down.
"We've been hearing from people that they would not like to get hit with a huge tax increase all at once - that hasn't changed in eight years," McCoy said.
The issue will return for a council vote at the May 1 public hearing and town meeting on the budget.
©Journal Inquirer 2007