BUDGET : The Full Story
About
The town budget is a crucial plan that outlines how local funds are allocated to support essential services, infrastructure, and community initiatives. The process begins with input from town departments, followed by careful review and adjustments by town officials. Public meetings and hearings provide residents with opportunities to share feedback before the final budget is approved.
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Transparency and community involvement are key to ensuring that the budget reflects the town’s priorities and needs. Stay informed and engaged by following budget updates and participating in upcoming discussions.
Budget Overview and TimeLine
Budget Meeting Video Clips
Reevaluation
In short: A reevaluation impacts the mill rate by adjusting it to reflect the changes in total property values. If property values increase, the mill rate generally goes down to keep revenue steady. If property values decrease, the mill rate might go up to compensate. The reevaluation itself doesn’t automatically increase or decrease total tax revenue; it’s the mill rate adjustment that determines the overall tax burden." The Town Council sets the mill rate each year. Taxpayers must be vigilant and make certain that the Town Council adjusts the mill rate to only match the increase in new tax revenue needed to fund the approved budget and nothing more. Click "Read More" for even more info, an examples. A reevaluation (or property revaluation) is the process by which a town or municipality reassesses the value of all properties within its jurisdiction. In CT, the state mandates that property be reevaluated every 5 years and to do a full revaluation every 10 years. The impact of a revaluation on the town's mill rate is closely tied to changes in property values, and here's how it works: 1. What is a Mill Rate? The mill rate (or millage rate) is the amount of property tax paid per $1,000 of assessed property value (assessed value is equal to 70% of the property's full value). Example: If the mill rate is 25 mills, then a property valued at $100,000 would pay $2,500 in taxes ($100,000 ÷ 1,000 × 25 mills). 2. What is a Property Reevaluation? A reevaluation is the process where a town or city re-assesses the values of all taxable properties within its boundaries, usually due to changes in the local real estate market. Property values may go up, down, or remain stable based on the market, property improvements, or other factors. 3. How Does a Reevaluation Affect the Mill Rate? If Property Values Increase:When the assessed values of properties increase, the total taxable value of all properties (the Grand List) in the town increases. Example: Before reevaluation, the town’s total taxable property value might be $500 million, and with a mill rate of 30, the town collects $15 million in taxes. After reevaluation, the town’s total taxable value might increase to $600 million, but to keep tax revenue at $15 million, the mill rate would need to decrease to 25. However, to avoid a windfall gain (where the town collects more tax revenue due to higher property values without needing to raise the mill rate), the town's Board of Finance or Select Board will likely (should) adjust the mill rate downward. This helps keep the total tax revenue roughly the same as before the revaluation, even though property values have gone up. The amount of taxes needed to be raised should equal the amount of money needed to fund (pay for) the new year's budget that passes at referendum.  If Property Values Decrease:If the reevaluation shows that property values have declined, the total taxable value of all properties in the town would decrease. To maintain the same level of tax revenue, the town may raise the mill rate. However, the increase in the mill rate would still be subject to oversight to ensure the town isn't over-collecting taxes. Example: If the town's total taxable value drops from $500 million to $400 million, and the town still needs $15 million in revenue, the mill rate might increase from 30 to 37.5. 4. How Does This Impact Property Owners? For Individual Property Owners:Depending on how their property value changes in comparison to the average town wide change, property owners may see a higher or lower tax bill despite the change in the mill rate. If their property value increases more than the average town wide increase, they might pay higher taxes, even with a lower mill rate. Conversely, if their property value increases less than the average, they might see a reduction in their taxes. Example: The value of homes in town increases to a greater degree than commercial property and farmland (as is the case in Coventry this year due to the revaluation) there will be some shift in the tax burden from the commercial properties and farmland to home owners even before the budget is increased and more taxes are needed. This is because as homes increase in value at a faster pace than other properties, their total value will make up a greater amount of our Grand List. In Coventry commercial properties in town make up only about 4% of the current year Grand List. As home values increase at a rate that is 4 times faster than commercial properties, commercial properties will make up a smaller percentage of the new Grand List and homes will make up a larger percentage of it. We will have to wait for the numbers to be finalized to project the impact, but home owners will bear a higher percentage of the tax burden than they did before the revaluation. It is also true that individual homes and properties may rise at a higher or lower rate than the average of all homes or properties in town. Each year, the Grand List typically (not always) increases due to new construction or impactful renovations that increase the property value of properties in town. This is separate from the impacts of the revaluation. The annual growth in the Grand List, if there has been any (separate from revaluation), will help offset a small amount of any increase in the town budget and need for more tax revenue. Likewise any negative impacts on the current Grand List value would have the opposite effect. For the Town:The goal of a reevaluation is to ensure that the tax burden is distributed fairly based on current property values, so that no one property owner is unfairly over- or under-taxed. It also allows the town to continue funding its budget without experiencing large fluctuations in tax revenue. The revaluation causes a new balance to be made based on the changes in value of each individual property and property types.
Mill Rate
In short: The mil rate is a tool that helps local governments calculate property taxes. It varies by region and depends on how much funding local governments need to provide services. It can be a critical factor for homeowners when calculating their tax burden and can influence decisions about property purchases. If you’re in an area with a relatively high mil rate, your property tax burden could be a significant part of your annual expenses. Conversely, if the mil rate is low, property taxes might be more manageable, even if the property values are high. Click "Read More" for even more info, an examples. A mil rate (short for "mill rate") is a term used in property taxation. It's the amount of tax you pay per $1,000 of a property's assessed value. Example 1: If the mil rate is 20 mils, you would pay $20 in taxes for every $1,000 of your property's value. If your property is valued at $100,000, your property tax would be calculated like this: Mil rate: 31.74 mils Property value: $100,000 Tax: 31.74 x (100,000 ÷ 1,000) = $3,174 Example 2: Assessed Property Value: $250,000 Mil Rate: 31.74 mills (which is 0.03174 when converted to decimal) Property Tax=(31.74/1000​)=0.03174 Property Tax=0.03174×250,000=7,935 So, with a mil rate of 31.74 mills, the property tax would be $7,935 for a property valued at $250,000. Why Does the Mil Rate Vary? Mil rates can vary significantly depending on where you live. Local governments need money to fund services, and each locality has different needs and budgets, so they set their own rates. Some of the factors that can influence the mil rate include: Local Budget Needs: A city with higher costs for public services or infrastructure development might set a higher mil rate. State or National Funding: If a state or national government provides more funding for certain services, a locality might set a lower mil rate. Property Values: If property values in an area are rising, the local government might reduce the mil rate to avoid raising taxes too much. Conversely, if property values decline, the government might raise the mil rate to make up for the lost revenue. Mil Rate vs. Tax Rate While it’s easy to mix up mil rate with tax rate, they’re actually different concepts: Tax Rate is usually expressed as a percentage. For example, a property tax rate might be 2%. If your property is worth $100,000, the tax would be 2% of $100,000, which is $2,000. Mil Rate is typically expressed in mills (1/1,000 of a dollar). A mil rate of 20 mills means you pay $20 for every $1,000 of assessed value. Why It’s Important Understanding the mil rate is crucial because it directly affects your property taxes, which is a significant expense for homeowners. If you're looking to buy a property, the mil rate can give you an idea of how much you'll need to pay annually in taxes. In some places, it might even be a deciding factor for people when choosing where to live, especially if they’re on a fixed income or trying to manage costs. Additionally, municipalities often use the mil rate to adjust for changes in the economy or shifts in local funding needs. So, even if your property’s value stays the same, the mil rate could still change year-to-year. Mil Rate and Local Services Local services are often funded by property taxes, so the mil rate also plays a role in determining how much money goes to things like: Public Schools: A big chunk of property taxes often goes to funding local schools. (In Coventry, this accounts for over 60% of the budget) Fire and Police Services: Taxes help cover the costs of local fire departments, police, and emergency medical services. Road Maintenance: In many areas, property taxes are used for infrastructure projects like road repairs and snow removal. Parks and Recreation: Some local governments use property taxes to fund parks, libraries, and community centers. The mil rate essentially reflects how much of your property’s value is being used to fund these services.
