First Selectman's Corner April 9, 2022 - Budget Planning

First Selectman’s Corner – April 9, 2022

March and April are typically the time of year when our town budget comes into focus.  Our Boards of Education and the Board of Selectmen gather to review past expenditures and the future needs of our town to draft a plan on how best to proceed in the coming fiscal year.  For those accustomed to the process, this can be somewhat of a repetitive process as many items within municipal and school budgets recur year after year.  That said, the study associated with budget development gives confidence to the process and the corresponding decisions to ensure that your hard earned tax dollars are well spent. 

After review, the estimates within the budget are then presented to our Board of Finance to ensure that the spending initiatives are well reasoned and of course the math “works” both in the development of the calculations as well as the tax impact on our families.  The Board of Finance frequently modifies the budget weighing the “big picture” of the proposed expenditures vs the general health of the economy trying to gauge how the towns spending plan will impact families in terms of any proposed increase in taxes. 

One of the larger considerations in the development of our budget is the status of the “Grand List”.  For those who don’t follow, the Grand List is the sum total of all taxable property in town - currently standing at roughly $682 million. The Grand List is broken down into three (3) categories: real estate (both homes and land), automobiles (both cars and trucks) and personal property (aka equipment).  Annual growth in the Grand List typically comes from home building (or commercial construction).  Traditionally the town sees three or four new homes built per year and along with some renovations that can equate to an increase of a few millions dollars.  Put that alongside some new car purchases and the changes to the Grand List might increase by $3.5 million dollars in a “normal” year.  The addition of new home or car  assessments create new tax dollars that will partially off-set increases in the cost of education or running our town services.

As I’m sure your saying by now….where’s he going with this?  Well this year – due to the “Supply Chain” ordeal an anomaly has occurred that will have an impact on all of us.  The valuation of automobiles (both cars and trucks) has skyrocketed due to the supply chain situation.  On average, these values have increased 20 to 25 percent.  In the case of New Hartford, the increase has added roughly $18 million to our Grand List.  This has never happened before and will make it fairly easy for town officials to lower the “mill rate” causing a slight reduction in your real estate taxes.  As it stands today, the budget recommended by the Board of Selectmen and approved by the Board of Finance calls for a lowering of the Mill Rate from 30.934 to 30.617.  Based on this estimate the average home in New Hartford will see a small decrease in their taxes – estimated at roughly $67 per year (based on an average home assessment of $212,000).

But this is not to say there won’t be a tax increase – it will just come in the way of your car taxes. Over the last year, car values have increased significantly (from an average of $10,570 to $13,800).  As such, the tax you pay on the average car will increase roughly $96 per year. 

By the way – these car value estimates are not done by Town officials like the Town Assessor, the Board of Selectmen or Board of Finance.  These valuations are generated by NADA “Blue Book” values that come from the State of Connecticut Department of Motor Vehicles.  As you can probably guess, I’m not a big fan of the car tax, but it is something we have to contend with each year.

As it currently stands, the Town Officials (both the Boards of Selectmen and Finance) are trying their best to present a budget plan to reduce the Mill Rate – and we understand that taxes are taxes be they real estate taxes or car taxes.  I’m hopeful that by the end of this process we can achieve our goal of lowering the Mill Rate to a point where the decrease in home taxes will generally off-set the increases in the car taxes.  Time will tell.

As always, we encourage all residents to be a part of the annual budget process – including the Annual Budget Hearing and Annual Budget Meeting.  We all want our towns to have good schools, a well-functioning Town Hall and great Public Works Department (with nicely paved roads) and beautiful parks for our enjoyment…at a price we all can afford.

Ultimately, the approval of the town’s budget remains with the voters who will have the opportunity to vote on the spending plan on May 3, 2022.  A complete copy of the proposed budget is included on the town’s website.  

Another interesting component to this year’s town budget vote is the inclusion of the Board of Selectmen and Board of Finance’s recommendations for use of the American Rescue Plan Act (ARPA) funds totaling $984,400.  Highlights of the plan include: a New Ambulance ($75,000), a new DPW Plow Truck ($200,000), Improvements to Brodie Park and Brown’s Corner ($250,000), Library Improvements ($150,000), a new roof for New Hartford Elementary ($187,400), and resident, business and non-profit aide ($77,000).

These spending initiatives are balanced to address the many needs of the community so that all residents can share in the recovery from Covid-19.  A complete list of the town’s recommendations is included on the town’s website.

As always, if you have any questions you send me a note at (djerram@newhartfordct.gov), I’m always here to answer any question or help in any way I can.

Stay safe and enjoy the warming Spring weather!

Dan Jerram, First Selectman