Budget Proposal Increases Mill Rate, But Decreases Taxes For Many Homeowners

The mill rate goes up, but for a majority of homeowners the actual tax payments go down in City Manager Lawrence Kendzior's proposed 2012-2013 city budget. Kendzior presented his $185.6 million plan to the Meriden City Council Monday night – kicking off the annual budget season.

The City Council has the next two months to discuss the document in a series of planned meetings with city departments and a public hearing before it is expected to adopt a final budget and tax rate in May. 

This year the City Manager has proposed to raise the current mill rate to 34.56 for the city's outer district and 36.64 for the inner district. Point-wise, it's a substantial jump from the 2011-2012 mill rates of 29.83 for the outer district and 31.65 for the inner district, rates that had increased barely a full point over the last three years.

But because the city's five year revaluation of homes completed in 2011 put values of many residences at dramatically less than their 2006 worth, 65 percent of homeowners would pay less in the next fiscal year than they did in the current one with Kendzior's plan, according to his calculations. Another 20 percent of residential properties would see a tax increase of a maximum five percent in the proposal.

That means, according to Kendzior, the owner of a median value single family home would pay $181 less in taxes in 2012-2013 with the new mill rates. [Wondering what your taxes would be? Multiply 70 percent of your 2011 appraisal, available on the Meriden GIS site by the new mill rate and divide by 1,000.]

While the property taxes of many homeowners would decrease, those of industrial and commercial property owners would likely rise. The values of these properties on the whole did not see a decline in value in the 2011 revaluation.

"The overall tax burden will shift somewhat to commercial properties and to other classes of property," Kendzior said in an executive summary of the budget he handed out Monday. He likens the change to a correction.

"In 2006 the value of residential property appreciated at a much greater rate than the value of commercial property appreciated, so the overall tax burden shifted to a fairly significant degree to residential property owners," Kendzior said in an interview following the council meeting. "This year that pendulum will swing back partially – it's not all going back, so commercial property owners are still paying less of the overall tax burden than they did in 2001."

Kendzior said that about 400 assessment appeals will be filed with the city to change valuations – mostly on large commercial properties.

At $185.6 million, the overall total of the budget proposal has increased almost $5 million from the 2011-2012 budget of $180.8.

According to Kendzior, the bulk of the increase in expenditure figures comes from an increase of $2,091,479 in employee benefits and an additional projected that Gov. Dannel Malloy has earmarked for Meriden Public Schools if the state legislature passes the governor's plan in the next session.

On paper, the proposed budget appears to flat-fund Meriden Schools for a fourth year – something the school board has said this year – giving the district $99,608,340 for another year, despite its Feb. 27 request of more than $104.1 million.

But Kendzior said the school board allocation listed on the budget currently doesn't give the whole picture. The figure doesn't reflect the added $1.7 million ECS dollars that Kendzior has listed in the contingency fund until, and if, it is passed by the legislature, health cost benefits the city is taking on which will save the district $400,000, and another $2 million in magnet school tuition savings for Edison Middle School that the district is working with the state on.

Capital improvements in the 2012-2013 plan include the purchase of a generator for the library in case of power outage emergencies, like in the October 2011 nor'easter, $600,000 to pay half the cost of a new ladder truck for the Fire Department, which , and an additional $500,000 for road paving to take advantage of good prices on such work.  

The proposal, attached to this article in PDF format, will now be vetted and discussed by the city's Finance Committee through sessions in the next two months. City departments will go before the committee to explain specific budget requests. Important dates include: 

• Tuesday, March 6 - Budget Overview, Revenues, Library, Health
• Tuesday, March 13  - Parks, Public Works, Public Utilities
• Wednesday, March 28 - Board of Education
• Tuesday, April 3 - CIP
• Tuesday, April 10 - Fire, Emergency Communications, Police
• Tuesday, April 17 - Public Hearing
• Tuesday, May 1 - Deadline for Finance Committee to report recommendations to the City Council
• Monday, May 7 - Deadline for City Council to adopt a budget for FY 2012 - 2013
• Thursday, May 17 - Deadline for City Council to adopt a tax rate

Committee meetings are at 5:30 p.m. in Council Chambers at City Hall, according to a Finance Committee resolution. The public hearing time and location has yet to be announced.