Milford Budget Proposal: What Impact Will It Have On Taxes?

MILFORD, CT — For the fourth consecutive year Milford residents are looking at a tax decrease. The projected savings amounts to $2 for the average Milford homeowner and while that isn't a big number, it definitely beats the alternative.

Communities all across the state are projecting tax increases and some are even hefty hikes, but in Milford residents won't have to worry about that, Mayor Ben Blake said Thursday.

"The budget is good news as we are able to keep taxes down while funding the great services that Milford residents have come to expect. We're also able to improve our open spaces and invest in schools and recreational facilities."

For the record, the budget proposal is $216.52 million for next year, which is $6 million more in spending or a 3 percent increase on the expenditure side.

Here's a quick breakdown of the $6 million increase:

The Board of Education is seeking a $1.763 million increase over this year's budget plan

The city's debt service payment is increasing by $1.5 million

The city's pension contribution is also increasing by an additional $1 million

Contractual wages for employees are increasing by $934,000.

And the city's health insurance costs are increasing by $376,938

The city is not adding a new net positions in next year's budget.

Why Are Taxes Decreasing In Milford?

Blake said the city has a very robust undesignated fund balance, which is also known as a contingency account, due to budget surpluses in recent years. Blake is seeking to take $9 million from the city's contingency fund in an effort to keep the tax rate as low as possible for residents.

The $9 million figure represents a $4 million hike over what was used for this year's budget, but Blake said the city still has between 15 to 20 percent of the total city budget in its contingency fund. Bond rating agencies want a municipality to have at least 5 percent of the total budget in its contingency fund. Milford is still way above that number, Blake said.

How Did Milford Find Itself In Such Strong Financial Shape?

Blake said because the city's tax rate has dipped for four straight years its led to even more businesses wanting to relocate here.

"Businesses want to come here because of the low tax rate, our great location and the permitting process is much improved," Blake said, while adding he believes the tax base will likely continue to significantly increase next year.

Blake noted this year that 465 new businesses have opened in Milford. The city's tax base has soared to an estimated $6.7 billion and Milford has the largest grand list in New Haven County, he said.

Budget Process

The Board of Finance is holding a public hearing on the budget proposal at 6 p.m. on Feb. 11 at City Hall. The Finance Board is expected to vote on the budget sometime in March and then the Board of Aldermen will hold hearings in April and May before voting to approve a final plan and tax rate in mid-May.

The proposed tax rate would be 27.73 mills. The current tax rate is 27.74 mills. In 2011-12 the tax rate was 28.89 mills.