Two questions, asked during this year’s Public Hearing on the budget, related to assessed value and mill rate. It may be helpful to address both more closely. A property tax bill is the product of multiplying the assessed value by the mill rate.
A specific comment was made that in 15 or so years a particular property’s tax bill had doubled. Under the mathematics rule of 72, (a particular rate of increase number divided into 72) yields how long it would take to double. For example, at a rate of 6 percent increase per year, the number will double in 12 years. With the last eight years’ rate of increase averaging less than 2 percent, it would take more like 36 years for a tax bill on a particular piece of property to double from rate growth alone. This highlights why the Board of Finance seeks to meet the needs of Granby while holding the line to keep the rate of increase for both spending and mill rate fairly flat.
The other factor in calculating a property tax bill is what the assessed value is and how it changes under revaluation (reval). Over time, values change and the revaluation process is required every five years under state statue to reflect those shifts in value between properties and, to a degree, between types of neighborhoods. In the recently completed reval, overall values shifted upwards by less than one percent, though not uniformly. Generally, this time the more expensive homes fell while the more economical starter homes of the older neighborhoods tended to come up a bit. This seems to happen when the market is tough and money is tight. Overall this leads to a slight shift in tax burden where pricing is less volatile and older neighborhoods hold their value in good times or bad.
A question was asked of what would be done to offset this shift. The point must be made that it is legally required to have this shift occur every five years in this state. While there are ways to phase in the effects of revaluation, given the overall shift of less than 1 percent in values, any phase-in would be negligible. One’s benefit of a slight delay in a bill going up is offset by a delay in someone else’s going down. Reval is overall a zero sum exercise. It does not, in and of itself, bring in more money to the Town General Fund. Reval simply follows the legally required process of adjusting assessments in reflecting the actual shifting in property values throughout the town and between neighborhoods.