Average Monthly Tax Increase:

Around $20

By John Voket

According to an informal study mounted by The Newtown Bee and a consortium of Newtown PTAs, about half the households in Newtown, which are not already qualifying for tax relief through senior, veterans, disability, and emergency service benefit programs, would pay between $15 and $25 more per month to cover more than $102 million in programs, benefits, equipment, vehicles and facilities proposed in the 2007-2008 municipal budget.

While the average home value in Newtown may be skewed upward by the approximately 500 homes valued between a half-million and $6.8 million, Assessor Tom DeNoto confirmed this week that slightly more than 10,000 of Newtown’s 12,000 taxable parcels are valued at less than $500,000. The greatest segment of taxable properties — 5,950 of them — are valued between $150,000 and $299,000, with 3,545 taxable properties valued below $149,000.

The current proposal, which elevates spending 5.9 percent above the current package, would provide $102,232,877 and raise taxes 1.6 mills. A mill equates to $1 in taxation for every $1,000 in assessed property value, before any other local tax relief incentives.

One of the most popular incentives for local seniors just received a $200,000 boost to accommodate even more applicants who may feel squeezed by local taxes. Currently, hundreds of property owners enjoy some modest to significant tax relief available through a combination of local, state, or federal programs.

According to tax officials, there are hundreds more in Newtown who qualify for some tax relief who are not taking advantage of the programs.

Another factor in the larger financial scenario is the money being returned to offset larger tax increases, as well as a modest payback to a rainy day fund that has been used in previous years to offset tax increases. Town Finance Director Benjamin Spragg said that $2.8 million of a $3.3 million surplus is being returned to taxpayers to offset tax bills that come due July 1, 2007, and another $500,000 is proposed to be returned to a reserve fund.

First Selectman Herb Rosenthal said the half-million dollars earmarked for the reserve fund, would replenish money that has been drawn from the account in past years to reduce the mill rate, and the individual tax burdens of residents. Mr Rosenthal said the $3.3 million town-side surplus is unusually high because of a bubble of unanticipated revenues that came to the town this fiscal year from a combination of one-time state grants as well as other fees, programs, and collections.

The advantage of using $500,000 to infuse the reserve fund is two-fold, he explained. It not only helps offset a greater tax increase, but perhaps more importantly, the reserve fund is viewed favorably by the town’s bond rating company. Currently Newtown is on a positive outlook from Moody’s Investment Service.

This means a bond rating upgrade, which Newtown requested at its last visit to the agency, is likely. Mr Spragg and finance board chairman John Kortze have both indicated this imminent bond rating enhancement would generate millions in tax relief going forward on bonds sought for capital improvements.

In addition, a bond rating upgrade would generate up to $2 million in savings almost immediately through refinancing of current bonds at a lower interest rate.

Mary Ann Jacobs and Kathy Fetchick, who helped formulate statistics for the Bee/PTA study, said taxpayers considering voting down the increase to gain measurably greater relief should know that the proposal would have to be downsized by almost $5 million to zero out a mill rate, and a reduction of $1 million would provide just three-tenths of one mill reduction.

Citing last year’s historically low budget voting trends, and back-to-back budget failures, Ms Fetchick said it is critical that all taxpayers who feel strongly either way on the budget either vote by absentee ballot, or turn out to the polls April 24.

Ms Jacobs concurred.

“Last year, only 22 percent of the voters came out to cast their vote, even after the second budget failed,” Ms Jacobs said. “Comparatively, 67.8 percent of the voters participated in the November elections. When a budget can pass or fail by 53 votes like it did last year, your vote really does matter.”