Grand list shrinks…. again. Does this mean tax increases?
The grand list has shrunk again this year marking a consistent trend during the term of Mayor Melody Currey. The only years not showing a drop in the list were attributed to the widely unpopular revaluation, but even the reval adjusted list shrank. This history makes it disingenuous at best when the Finance Director and Mayor make their public budget projections based on the grand list not shrinking.
Despite the annual drop in the list the Mayor has submitted budget after budget which increases the spending of the town without regard for the tax impact on the citizens. Last year some of the council members were declaring victory that the mill rate had fallen despite the fact that the actual tax impact on East Hartford Residents had never been higher.
Now, almost 12 months later foreclosures have become an epidemic and the per household tax burden is approaching $400 per month. Could the two be related? You be the judge.
The newly release Net Taxable Grand List is $3,103,953,346 down $43,013,279 from $3,146,966,625 for the 08/09 budget year. When multiplied by the 98% collection rate that gives the town $3,041874,279 of property to base the mill rate on.
To maintain the same level of spending as 08/09 which was itself an abusive budget tax increases are required.
So far the Mayor has revealed a drop in Non-Tax Revenue of 3.2 million of 08/09 which we’ll assume will exist in 09/10 as well. That brings the Non-Tax Revenue estimate to $55,622,281 reducing portion of the 08/09 spending level of $155,830,432 which needs to be raised through property tax to $100,208151. That means a minimum mill rate of 32.94 to maintain spending. That translates to an average tax increase of $184 or $15/month per household. That’s 4% in one year. How many residents lost their jobs, forget received a 4% increase in wages. As a portion of household income property tax would represent burden of 11.52% up from 11.07% in 08/09. At this growth rate the local property tax burden will equal 14% of the average household income within 5 years.
This picture will get worse as PILOT, ECS and grant money dries up. It’s also going to be magnified many fold if the BoE doesn’t get it’s act together and commit to a serious trimming of fat in the East Hartford education district. So far the BoE has offered no substance to indicate they understand the problem.
What our officials need to do is draw a line. They need to understand that a ZERO increase in all areas of the budget is the starting point this year. They need to pare down from there. To even pretend to be serious about the plight of the businesses and residents of East Hartford our officials must cut spending by $3.9 Million. To properly govern they probably ought to pare at least 3 times that and, as unpopular as it will be with those who have a vested interest, most needs to come from the education side.
The Mayor’s public statements so far have been encouraging, but given the history of East Hartford’s government I’d be surprised if they could even hold the budget, forget implementing the reductions required to prevent a tax increase.
Taxes… worse than strip clubs?
Unfortunately, despite the fact that I was in New Haven on business anyway, I was unable to attend the Masters Club v. East Hartford case in court today. The New Haven Federal District Court requires you to check your cell phones at the door and I could not be separated from my phones during business hours. I’ve not heard any updates yet from either side either.
What I did instead was go to the Raymond Library to conduct some budgetary research for a tax reform proposal I’m working on. What I found was two fold. First, the reference section has a woefully inadequate resource of town budget documents. Quite frankly, there is no where near the information required for an average resident to form a working knowledge of the budget history of East Hartford. I won’t judge too harshly however because the regular reference librarian is on vacation. There may be more information squirreled away which the other librarians don’t know about.
What I did find was interesting. The most interesting part being that student enrollment in the East Hartford School District totalled 7,438 in 1998 and increased to 7,918 in 2007 which represents a 6.4% increase in enrollment. During the same period the employment rolls of the East Hartford School District increased from 934 in 1998 to 1222 in 2007, or 30.8%. Is it any wonder why our school budget is spiralling out of control?
How much does the average employee make? According to the 08/09 BOE proposed budget the answer is $53,315 before benefits. The budgetary impact of these 288 additional employees is huge. Based on the 08/09 adopted budget’s mill rate calculation these employees represent 4.98 mills of the current 31.67 mills. In plain dollars and cents that’s $721.62 that the average taxpayer has no choice but to pay.
What was it that Bill Horan and Barbara Rossi said at budget time earlier this year? They said that taxes don’t cause foreclosures. Well, I’ll counter that by saying when this kind of unchecked excess represents $60/month extra on the “average” persons mortgage and tax increases of 5% or greater come year after year the result is the inability of the homeowner to pay the mortgage and the taxes. The average East Hartford taxpayer today has a burden before state and federal taxes of $382/month.
It can be assumed based on previous unbridled budgetary growth that when budget season ‘09 concludes the monthly tax burden will be over $400 while the median household income in East Hartford remains stagnant or falls and the grand list shrinks.
Stay tuned, major changes for the East Hartford tax system are coming. With any luck these changes will force the BoE to realize it’s strangling this town and they’ll fix these problems voluntarily. If not, we’ll drag them kicking and screaming to an education system that this town can afford.
UPDATE: I did manage to find the exhibits and witness lists filed by the town and Masters Club. When you put them together you get a pretty good idea of what is being argued in court.
East Hartford (Defendant) Exhibit List
East Hartford (Defendant) Witness List
Masters Club (Plaintiff) Exhibit List
Masters Club (Plaintiff) Witness List
My $5 says the Masters Club case is two pronged.
The first prong is an attempt to demonstrate through testimony of Council & P&Z members as well as town officials that certain persons, whether in executive session or out, have indicated that the goal is to prevent clubs from coming to town. *cough* Currey *cough* Any such statement by a town official would likely lose the case right there since it is illegal for the town to regulate speech for reasons other than secondary effects.
The second prong will be ripping apart the claims of regulating for secondary effects. As you’ll see on the witness list a variety of people not named on the case have been subpoenaed to testify in addition to P&Z members. I don’t honestly believe the claim of regulating for secondary effects can be defended here, but good luck to Mr. Gerard.
On the defense side it appears their strategy is to disqualify as much of the plaintiff’s exhibit material as possible followed by an attempt to get Mr. Chu and or his real estate agent to blow the case and finally a vigorous defense of the actions of the P&Z and town hall officials to date as regulating for secondary effects.
I’m anxious to see the resolution of this preliminary injunction hearing and find out if everyone told the truth up on the stand based on what has been told to me over the months. If you are interested here is the relief that Masters Club is seeking.
