Rell, Legislators Make Nice Over Budget

CTNJ is reporting that the governor and legislative leaders held a meeting to get back on the same page on the budget following a epistolary spat last week.

The two sides agreed to move on the budget as quickly as possible following the approval of concessions by unions this week.

Bill Would Delay Revaluation

The state senate has approved a bill that would allow towns to delay property revaluations for a year. Cities like New Haven would be able to put off revaluation until next year. Makes sense in this climate.

Bottles and Cans, Part II

The state has won a legal battle with distributors over unclaimed bottle deposits, paving the way for them to seize those funds immediately. The court battle will continue, however.

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11 responses to “Rell, Legislators Make Nice Over Budget

  1. Is delaying revaluation a good thing?

    It would seem to me that in this round of revaluations, almost everyone’s house would be worth less than it was during the last revaluation, which would have been in 2006 or so I guess.

    But anyone who has purchased in the past year or so would get a valuation that would be equal to their purchase price (then you’d take 70% of that, since CT has a rule that the assessment can be a max of 70% of market).

    So if you have two identical houses next door to each other, and one was bought in 2003, and in 2006 it was assessed at $300,000 market, and then the other house was bought in January 2009 for $220,000, then the new homeowner is going to have a significantly lower tax burden on the exact same house. Because the assessment on the first house would be $210,000 (70% of $300,000), while the assessment on the second house would be $154,000 (70% of $220,000).

    It would seem to me that the effect of delaying revluations would be to cause longter-term homeowners to be paying more in property tax than they would if the reassessment occurred, and the new homeowners to be paying less. Because if you did the reassessment, the new homeowners’ houses would not change in assessed value, but the old homeowners’ values would go down. This would lower the grand list. The mill rate would then increase. However, the longer term homeowners would have their valuation drop to more than offset this.

  2. It would seem to me that the effect of delaying revluations would be to cause longter-term homeowners to be paying more in property tax than they would if the reassessment occurred, and the new homeowners to be paying less.

    That rings true, but as you mention, if a reval is expected to value homes at a lower amount, that means that local mill rates would go up. You’d expect people to care about how much they’re paying, but the debate is overwhelmingly tilted towards what the tax rate is. Look at the progressive income tax fight to see this dynamic in action.

  3. Bruce Rubenstein

    I also question comment about reval. Why should the taxpayer pay an inflated tax figure? The extra money paid to the town could be used by the taxpayer to buy things and thus generate the economy and help us out of this recession.What about the fact that the taxpayers arent being treated equally as some towns will adjust their reval to take into account the drop in market values, while other towns will put it over a year?

  4. Is delaying revaluation a good thing?

    With the propert tax system we have, delaying reval never makes sense. The purpose of the reval is to proportion taxes based on relative property values, and the more that gets out of whack, the more unfair the taxes are.
    Some states such as Florida revalue annually, but their systems are far more sophiticated than what we have here. However, the assessments more accurately reflect the current market value.
    The other issue is that in a normal enviroment delaying reval causes auto and business personal property taxes to increase disproportionately (of course, with declining real estate values, they’ll rise anyway).
    The cities want the delay because they don’t want to spend the money. That, of course, begs the question as to when they will be able to afford it. Brace yourself for mill rates in the 100’s as was the case in Waterbury and a few other places just a few years ago.

  5. I also question comment about reval. Why should the taxpayer pay an inflated tax figure? The extra money paid to the town could be used by the taxpayer to buy things and thus generate the economy and help us out of this recession.What about the fact that the taxpayers arent being treated equally as some towns will adjust their reval to take into account the drop in market values, while other towns will put it over a year?

    In Connecticut, the unfairness in the system never crosses town lines. The total taxes result soley from the spending in the local budget. What town X does with its reval, has zero impact on town Y next door.

  6. wtfdnucsailor

    Delaying a revaluation may be a good thing or a bad thing, depending on how home values change between the scheduled year and the actual year of revaluation. In general, though, delaying revaluation makes the ‘sticker shock’ of the new tax bill even greater when it finally occurs.

  7. Delaying revaluations is an idiotic idea. People who think it’s a good idea generally are either timid politicians or local taxpayers who fundamentally misunderstand the relationship between revaluation and property taxes.

  8. I also question comment about reval. Why should the taxpayer pay an inflated tax figure? The extra money paid to the town could be used by the taxpayer to buy things and thus generate the economy and help us out of this recession.What about the fact that the taxpayers arent being treated equally as some towns will adjust their reval to take into account the drop in market values, while other towns will put it over a year?

    Delaying a revaluation shouldn’t result in more or less money paid to the town. It’ll just shift who pays. Delaying a revaluation when prices are rising tends to help people who have been in the houses longer and hurts people who recently bought new homes. If you buy an existing house, then the old valuation will probably stay, even if it is way out of whack with the market.

    In a declining market, revaluation hurts older homeowners and helps newer homeowners. They will instantly get their valuation reduced to the market price.

    In California, there’s a law called Proposition 13, which means that when you buy a house, that’s the valuation. It can only rise a max of 2% per year. Then when you sell, the valuation resets. This has been in place since 1978 or so. So someone who bought a house in 1975 is paying a tiny fraction of the property taxes that someone in an identical house pays next door if that house had been bought two years ago.

    A functional rpoperty tax system requires that you do valuations on a relatively frequent basis, otherwise, the system can get quite unfair fairly quickly.

  9. But anyone who has purchased in the past year or so would get a valuation that would be equal to their purchase price (then you’d take 70% of that, since CT has a rule that the assessment can be a max of 70% of market).

    I don’t believe this is true.

    The home’s assessment carries forward with a new homeowner.

    State law says a sales price alone cannot be justification to adjust assessed value.

    I still don’t think they should delay revaluations. Isn’t that what got some cities (I’m thinking Waterbury and Bridgeport) in trouble?

    And, if they delay, say three years, the cost may be higher to the towns since the same few vendors who conduct site visits, etc will have more towns interested in hiring them. No?

  10. A functional rpoperty tax system requires that you do valuations on a relatively frequent basis, otherwise, the system can get quite unfair fairly quickly.

    Exactly.

  11. Delaying a revaluation may be a good thing or a bad thing, depending on how home values change between the scheduled year and the actual year of revaluation. In general, though, delaying revaluation makes the ’sticker shock’ of the new tax bill even greater when it finally occurs.

    Perhaps you can explain how a reval cuses “sticker shock’? Unless, of course, the property owner has been floating along with an undervalued property relative to his fellow taxpayers. Like it or not the system is based on apportioning taxes based on the relative values of the properties.
    Delaying a reval can never be a “good thing” as it only results in unfairness.

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