Crunched By Numbers–––

Finance Chairman John Kortze Reflects On The Proposed Budget

By Dottie Evans

A reduction of $200,000 from the school budget would result in a savings of only $10 or $11 in taxes for an individual whose home was assessed at $150,000. That is a mind-numbing concept, according to Board of Finance Chairman John Kortze, because it shows just how big the numbers really are.

“This is an indication of the extent to which the school budget –– and this town in general –– has grown,” Mr Kortze said following Monday night’s Board of Finance meeting.

During the hearing for the proposed 2003–2004 Newtown Schools budget, finance board members finally stepped aside from their “just listening” mode, and showed a deep determination to address the hard realities of an extremely difficult budget year.

Reflecting on the numbers and the possible ramifications to taxpayers if the entire proposed $50.7 education budget were passed, Mr Kortze mentioned several factors and asked for consideration of the history behind the numbers.

This year, he said, more than 90 percent of Newtown’s town/school taxes will be paid by individual homeowners. This represents a change from previous years. In 2001, homeowners paid 79 percent of the tax burden and the rest was paid by commercial, industrial, motor vehicles, and personal property taxes. In 2002, homeowners paid 83 percent. These figures point to the fact that Newtown is becoming an increasingly residential town and the commercial base has not kept up the pace.

During the recent (October 1, 2002) revaluation, only 20 percent of homeowners saw their assessments stay level or go down. Conversely, 80 percent of the assessments went up and the percentage increase can be expressed in the following way, assuming that the current proposed budget is passed.

“If an assessment went up 60 percent, your taxes would go up 15.5 percent. If your assessment went up 70 percent, your taxes would go up 22 percent. If your assessment went up 80 percent, your taxes would rise 29 percent.”

The most disturbing fact, according to Mr Kortze, is that fully one-third of Newtown taxpayers fall into that category of homeowners whose assessments went up by 70 percent or more, meaning “their taxes are going up 22.7 percent.”

And these may be the very people who are least able to pay.

 

Smaller Homes Took The Biggest Hit

Unfortunately, Mr Kortze added, the individuals falling into this last category, whose homes saw the greatest rise is assessments, are often the elderly and those on fixed incomes.

According to the Lesher-Glendinning Revaluation Company that was hired by the town for the 2002 revaluation, those homes (out of a total of 11,122 homes studied) that saw the greatest rise in assessments came from the $150,000 to $270,000 range.

Remembering that assessments are based on fair market value as measured by current sales of comparable homes, it is not surprising that lower priced homes saw a substantial rise in their assessed value across the board. Smaller houses in this price bracket are highly sought-after, according to Newtown realtors.

Many families moving into Newtown are looking to buy houses in this price range, and the sellers are people who have lived in Newtown for 20 to 30 years or more. They can realize a good profit on their homes if they sell. But if they stay, they must bear the brunt of higher taxes resulting from the 2002 revaluation assessment.

“These are people on fixed incomes who are going to be hit,” said Mr Kortze.

“These are also the same people who were in here a couple of years ago complaining about not being able to afford to live in Newtown,” and it was for these people that the town passed the Senior Tax Abatement Program giving tax credit to people over 65 whose incomes are below $35,000.

If this budget is passed as proposed, Mr Kortze continued, the top third group of homeowners who saw their assessments go up 70 percent or more will see a 22 percent or better increase in their taxes.

In theory, newer homes that have been assessed recently at current market values might not see as great an increase, percentagewise, even though the bottom line might be a larger number.

The positive side of all of this is that Newtown homes are increasing in value. The town is a desirable place to live and the result is that more and more people want to come. In general, the population is growing more affluent.

Yes, it is “Nicer In Newtown,” reflected Mr Kortze, remembering a green bumper sticker seen around town about 15 years ago. But quality of life in Newtown is dependent upon many factors. Excellence in the schools may be near the top of the list but it is not the only reason people like living here, he noted.

He asks residents and town officials to remember those who will bear the greatest burden of a tax increase in the current day’s negative economic environment.

“It is important for the financial bodies of this town and the Legislative Council to take into consideration those people that show up at these budget hearings, as well as those who don’t. They must make an educated decision,” keeping in mind both groups, he concluded.