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Stamford homeowners who’ve been panicking since they received notice of their new pandemic-inflated property values 10 weeks ago now have clues about what that will mean for their tax bills.
Actual answers, however, will depend not only on last year’s property revaluation but on the mill rate that will be set in May, and on the 2023-24 municipal budget, which Mayor Caroline Simmons presented Wednesday night.
During a virtual meeting with the Board of Finance and the Fiscal Committee of the Board of Representatives, Simmons said she is requesting a budget of nearly $655 million for the city and school system, which is 3.7 percent more than the current fiscal year.
Simmons did not say how much of a tax increase will be needed to pay for a budget that size, but finance board members and city representatives will spend the next two months combing it for things to cut before the mill rate is set.
Those board members said during a previous meeting on Monday that they are concerned about the effect of the property revaluation on this year’s tax rate.
According to the Simmons administration, the revaluation increased the value of multi-family homes 36 percent; apartment buildings of five or more units 26 percent; single-family homes 25 percent; industrial properties 23 percent; condominiums 14 percent; and commercial property – primarily office and retail buildings – 7 percent.
The revaluation is based on property sales transacted between October 2021 and October 2022. That time included months in which home prices and rents jumped as buyers looked to escape COVID-19 by leaving New York City and other congested places.
Demand for houses and apartments in Stamford spiked, overwhelming supply, but commercial property values lagged as employees worked from home, depressing demand for office space.
Now that residential properties are worth more, they will be taxed more.
So on Monday finance board members recommended that the Board of Representatives amend an ordinance to allow them to draw more revenue from a business equipment tax, the so-called personal property tax, to offset the levy on residential property owners.
The ordinance now requires that the mill rate for personal property – such as computers, work stations, storage devices, printers, scanners, main frames, medical testing and manufacturing equipment – be the same as the mill rate for District A, one of Stamford’s four taxing districts.
District A is the largest and pays the most in taxes because it receives all city services, including water, sewer and garbage collection.
If the ordinance is not amended and the finance board, in trying to offset the effects of the revaluation, sets a lower mill rate for homeowners, the rate for personal property would also drop, Board of Finance Chair Richard Freedman explained during Monday’s meeting.
But if the ordinance is amended, the finance board can set a separate mill rate for personal property, he said.
That mill rate would stay where it is, so taxes on business property won’t change and the revenue from it will help ease the burden on residential property owners, Freedman said.
Without the ordinance change, taxes on business equipment could decrease about 15 percent, Freedman said. It would happen as taxes on houses and apartment buildings increase perhaps 6 percent or 7 percent, though accurate estimates are impossible at this stage, Freedman said.
The mill rate for motor vehicles would be affected similar to the mill rate for personal property, Freedman said. The motor vehicle mill rate should also stay the same, he said. The finance board already has the authority to set that rate separately.
Freedman recommended “that we not give a windfall to motor vehicles or personal property,” and spread the tax relief around more evenly.
He also recommended that the Board of Representatives pass a resolution to phase in the property tax this year. Simmons said Wednesday she would like to see it phased in over two years.
City Rep. Sean Boeger, co-chair of the Board of Representatives’ Fiscal Committee, said it will be difficult to rewrite an ordinance, allow representatives time to debate it, hold a public hearing and vote on it in time for the finance board to set the new mill rates in May.
“Two months is a heavy lift,” Boeger said. “We’ll have to start discussing it this week.”
He asked that the city’s law department help draft an amendment. Simmons said the city attorney is ready to help.
The mayor said Thursday that her budget “aims to ease the property tax burden on residents by mitigating the effects of the 2022 property revaluation. This includes recommending holding the personal property and motor vehicle mill rates flat and a two-year phase in of the property revaluation.”
During Wednesday’s budget presentation Simmons said her city operating budget request is $329 million, which is nearly 3 percent more than this year. Costs have increased for employee salaries and benefits, insurance, and debt service, she said. She also wants to add “a staff position focused on housing,” Simmons said.
She proposed a $91 million capital budget prioritizing “investments in school infrastructure, roads and sidewalks, and pedestrian safety projects.” She also is seeking $1.25 million for redevelopment of the Oak Park affordable housing project.
The Board of Education has already approved a $315 million budget for 2023-24, which is a 4.3 percent increase over this year. The city supports the Board of Education with an additional $4.6 million, according to the mayor’s presentation. Like the city budget, the proposed school budget likely will be cut as it makes its way through the two elected boards.
In Stamford, 92 percent of the budget for city and school services is funded by property owners. Other sources of revenue are fees, such as building permits and charges for parking and other services, which contribute 3.5 percent toward the budget, according to information provided by Simmons. State and federal funds together contribute 3.6 percent.