Time to Re-Evaluate? Maybe not...

Fairfield Maintains Reassessment Timetable

The Town of Fairfield has decided not to change the timing of the townwide Tax Reassessment. The Board of Selectmen considered changing the timetable. State law allows towns to reassess property values every four or five years. This Board briefly considered moving up the reassessment to four years.

The concept of Reassessment is sometimes not clearly understood. The Town Reassessment is for one purpose only: To determine each property owners share of the overall tax the Town charges. The Town hires an Appraisal Company to determine "Fair Market Value" for each property. By State Law, this number is then multiplied by 70% in order to determine the "Assessed Value" or the Assessment for each property. It is this Assessed Value multiplied by the Mil Rate that determines the taxes that are owed on a property.

So every five years the town reassesses the property for everyone. The values generally go up considerably because there is five years worth of appreciation. Does this mean everyones taxes go up dramatically all in one year? No. The Town adjusts the Mil Rate down. How far down does the Mil Rate go. Far enough so that it again generates the tax revenue needed to run the Town.

This is all about Tax Revenue and how much everyone pays in Property Taxes. This process really has little to do with Fair Market Value. Let's explore an example:

If your Assessment is cut in half, does your tax bill go down? Only if all other property assessments stay the same. If everyone's property Assessment is cut in half, then the town would double the Mil Rate. The Town needs to generate the same amount of tax revenue to cover its expenses. So if everyone's tax assessment is lowered and the mil rate is raised, your tax bill would stay the same.

Your taxes go down in only two situations: your assessment goes down and all your neighbors stay the same or the Town expenses go down.

Residential Taxes generate 85% of the Town's Revenue. Commercial Taxes generate 10%. So even if our Commerical Tax base increased by 50% - a very unlikely scenario - the Residential Tax burden would drop only 6% for a given home owner. So transferring the tax burden from the Residential Homeowner to the Commericial Property owner helps keep taxes down but that alone is not the answer to lower property taxes.

If we build lots and lots of New Construction, we add homes to the Grand List and this generates more "shares" of the taxes burden. On average, we have been building 50-60 new or significantly renovated homes each year. We have approx 16,000 properties on the Town Grand List so while New Construction helps, it doesn't create enough new taxpayers or additional taxes to impact all the other home owners.

So the only way to minimize tax increases is to minimize expense increases needed to run the Town.