The total value of properties in New Canaan, also known as the Grand List, has seen an unprecedented increase, rising from $8 billion to $10 billion. This 25% surge in property values has led to a wide range of changes in individual property assessments, with some homeowners experiencing increases over 25%, and others even more, particularly in cases of additions or major improvements.
Despite these increases, the town does not require 25% more revenue, indicating that taxes will not increase in proportion to property value rises. The exact impact on taxes will depend on the upcoming fiscal year’s budget and mill rate, which is yet to be determined. The new Board of Selectman has begun reviewing department budgets, and the budget process will continue through various stages before final approval and the setting of a new mill rate in May.
The calculation of property taxes in New Canaan involves applying the mill rate to every $1,000 of assessed property value. With the current mill rate at 18.94, examples show varied impacts on taxes due to the revaluation. In one scenario, a property originally assessed at $1,000,000 could see a tax decrease, while another, experiencing a 40% increase in value, could see a tax increase of 17%, not 40%.
Forecasts predict a significant decrease in the mill rate, potentially a historic reduction of 3.00 points. However, many uncertainties remain in the budget, including non-tax revenues and costs. The Board of Finance has yet to review submitted budgets, making any firm predictions premature.
Approximately 65-70% of the budget is expected to fund Board of Education expenses, with other significant portions allocated to emergency services, public works, parks and recreation, debt expenses, and town employee costs.
The town has a record of financial prudence, having cut costs and delivered surpluses each year from 2019 to 2023, allowing for tax stabilization and investment in town and school needs. This approach has also helped avoid over $18 million in tax increases compared to a standard annual increase of 2.5%.
However, a decline in non-tax revenues, such as conveyance fees from home sales, combined with inflationary pressures, led to a 4% tax increase this year. This increase is seen as an outlier in a period characterized by flat taxes.
Chairman Todd Lavieri of the Board of Finance emphasizes the town’s commitment to reporting facts and certainties, acknowledging the need to provide guidance in light of the significant revaluation impacts. Further updates are expected as the budget process progresses.
