Letter to the editor submitted by Brooks Harris, May 16, 2018
Your property taxes will be more expensive this year. Not because of an increase in the mill rate or your assessed value. This year, due to changes in the federal tax code, your ability to deduct state and local taxes will be limited. After deducting state and local income taxes, many Greenwich residents will have used up this limit and get no deduction for their property taxes. This means for every dollar of property taxes you pay you will lose a deduction you got last year worth up to 37 cents. That is a big economic impact.
Other towns in southern Connecticut such as Darien and Westport have approved reductions in their mill rate in recent years in deference to tax payers. While Greenwich’s mill rate is projected to be flat for next year, there is an opportunity, like some of our neighbors, to actually reduce the mill rate. And we can do this without sacrificing any of the good services our town has come to expect and without raising a dollar of additional debt for our children to pay off.
Helping people offset some of this increased tax burden by lowering the mill rate would be a clear signal that we empathize with this financial challenge, yet some in our town government do not see this as a priority. On Monday evening, the Budget Overview Committee of the Greenwich Representative Town Meeting (RTM) made a proposal to urge the Board of Estimate and Taxation (BET) to take $3 million from our overfunded reserve fund and use it to reduce the mill rate for all Greenwich tax payers. The RTM Finance Committee, a body on which I serve, recommended unanimously that this proposal be adopted. Yet when this was brought before the entire RTM, not only did they not approve this, they voted against even debating the proposal.
To clarify the sensibility of this measure, consider that the BET’s target level for the reserve fund is 5-10% of the annual budget. This level corresponds to the amount of reserves rating agencies seek to give a municipality a “AAA” rating, the highest possible. That is what Greenwich is rated. But our taxes have exceeded our expenditures for each of the last 10 years, and this fund has grown to more than $10 million higher than the upper end of the BET and rating agency targets. And this is after funding every budgetary request for the coming year that was put before the RTM and not withdrawn. In addition, this excess balance is after allocating money to reduce our outstanding debt for next year. We would not be taking this from the schools or the fire department. Our services are a priority, and we approved 100% of what came before us. $3 million is not a lot in the context of our budget, but it is important that we demonstrate that the tax burden Greenwich residents face is a matter we should not take lightly.
Finally, some might say that we need a larger reserve fund because we may have to increase funding of pension liabilities, pay for unforeseen waste clean ups or even spend the money on new capital projects. The rating agencies have proven fallible in the past, so perhaps a larger buffer than that needed for a “AAA” rating is appropriate? This may be true, but if it is we should have a robust debate and change our target reserve fund levels. Not capriciously retain funds in excess of our established targets that set our taxes at a higher level than they should be. The right thing to do is return at least a portion of the overfunding to the taxpayers of Greenwich through a mill rate reduction.
So, what can you do if this is an issue you care about? First, you can reach out to your RTM representative and let them know your opinion. I can be reached at [email protected] or you can look up your district representative at http://rtm.greenwich.org/members. You can also come out to the upcoming BET meeting where the mill rate will be set. That will be held on Monday, May 21st at 4:30 PM in the Town Hall Meeting Room. I believe town representatives care what you think. Your opinion matters. But it can only have impact if you speak up.
RTM District 10