Dec. 6—OLD LYME — Residents were not grateful when they opened their mail to find the appraisal on their new home in the days after last week’s holiday.
Letters, sent to the owners of more than 5,500 properties in the city, include new appraised and assessed values determined through the state-mandated revaluation process to ensure everyone pays taxes based on the current value of their properties.
Across the city and on social media, homeowners decried the assessments, which in many cases have doubled since the last revaluation in 2019. They feared the higher property values would translate into a similar increase in their tax bills.
Appraiser Melinda R. Kronfeld, among field visits from concerned residents in her office this week, said home values have increased an average of 61% based on the revaluation.
She emphasized that it is too early to determine exactly what this will mean for property owners’ tax bills. This is because the levy is determined by several factors that will play out in the coming months.
‘Don’t multiply that estimate by last year’s average price. You’re really doing yourself a disservice,” she said. ‘You’re going to think your taxes are doubling. That’s really not the case.’
The Grand List of all taxable property in the city – including real estate, personal property and motor vehicles – won’t be finalized until the end of January. The city budget for the coming year won’t go to voters until May. And the Finance Council will only set a new tax rate once the budget is finalized.
According to Kronfeld, all that information is needed to calculate a property owner’s tax bill. Only then can the invoice be determined by dividing the assessed value by 1,000 and multiplying by the new tax rate.
The appraised value is the full market value of a home, while the appraised value is 70% of that total.
If the Grand List grows significantly but the budget does not, the tax rate could fall.
Kronfeld said commercial values saw a slight decline, but not enough to offset the 61% increase in residential values.
She noted that home values had fallen slightly during the last revaluation. Then the COVID-19 pandemic hit and home prices skyrocketed as homebuyers in urban areas looked for more remote locations amid limited supply.
She said the increased property values should not come as a shock to residents.
“If they haven’t seen what’s happening in the real estate market, I think people can take a loss, but it’s really hard to ignore what’s happening in the market and what has happened in the market,” she said.
The whole purpose of revaluation is to bring property values up to market value, Kronfeld said.
“The revaluation itself is revenue neutral. We are not here to increase or decrease taxes,” she said. “Reevaluation is to bring market values to current market values and redistribute them so that people pay fairly and equitably.”
Assessors in other cities in Eastern Connecticut and along the coastline that have conducted recent revaluations reported similar increases. Preliminary figures show that the assessed value of homes in Coventry has risen by around 60%, in Canterbury by around 52% and in Branford between 60% and 70%.
Longtime Lyme officials emphasized that it is the budget planning process that will determine whether taxes go up, down or stay the same.
Some case studies
In neighboring Lyme, a 2023 revaluation led to an overall increase of 37.2% on the Grand List published early this year.
The change meant the finance board would have to reduce the then $19.5 million tax rate by about the same percentage if they wanted to keep the tax rate unchanged.
Budget documents show that without a tax increase, the mill rate would have been 14.3 mills. But officials say the finance board typically rounds up 0.25 million when setting the tax rate after a revaluation.
Therefore, the Finance Board set the tax rate at $14.5 million, resulting in an effective tax increase of approximately 1.3%.
Finance council chairman Alan Sheiness said at the time that the average homeowner in the city would see tax bills in line with the overall 1.3% increase, while those whose properties were more valuable would pay more.
In Norwich, residential values grew at a higher rate than commercial and industrial values after the 2023 revaluation, placing more of the burden on homeowners. House prices rose by about 60% overall, while commercial real estate values remained stable and industrial values rose slightly.
City officials said at the time that the revaluation would cause the city’s grand roll to increase significantly, meaning the tax rate would have to drop significantly when a new budget is passed in June.
Although the tax rate in Norwich fell, many taxpayers were nevertheless faced with atypically high bills because the reduction in the tax rate was not enough to offset the increase in city spending.
While the tax rate fell from 41.85 mills to 32.99 mills, Norwich’s combined city and school budget increased by $8.9 million to $153.6 million, an increase of 6.1%. The school budget alone increased by $6.2 million.
The value of the average appraised house in Norwich rose from $100,000 to $163,170 after the revaluation. Taxes for the current budget year increased by $1,172 to a total of $5,425.
Get vocal
Education expenditures account for 70.1% of Old Lyme’s budget. The regional spending plan is approved separately through referendum votes in Lyme and Old Lyme.
Region 18 Schools Superintendent Ian Neviaser said debt payments resulting from upgrades to four of the district’s five schools will see a 3% increase in the coming budget year. Voters authorized spending up to $57.5 million on the project in 2022.
Neviaser last year predicted an increase in the 2025-2026 budget by as much as 10% due to debt payments alone. But he said subsidy financing and favorable interest rates have softened the impact on taxpayers.
Other budget drivers include a contract with the Region 18 Teachers Association, made up of the district’s approximately 150 teachers, that was approved this week by the regional board of education. He said salaries will increase by 13.35% over three years.
Neviaser said he is in the process of coming up with budget recommendations that he will present to the school board next month. He could not yet speculate what the increase from the current $36.9 million budget might be.
“It’s at least 3% and it will obviously be more than that, but I don’t know exactly how much more,” he said.
First Selectwoman Martha Shoemaker said her budget planning philosophy revolves around being “as fiscally responsible as possible, while still trying to accomplish a number of projects that will improve the city.”
She rejected the idea of being able to keep the budget stable.
“We will definitely get an increase due to contractual obligations,” she said, referring to increases in budget items such as garbage collection and police officer salaries, to which the city has already committed.
She said new spending will require officials to prioritize projects for this year and beyond.
“What are the most important things we need to do within the one-year cycle, and what can we plan for?” she said.
Selectmen will spend through January crafting their 2025-26 budget before voting on a spending plan they will send to the Board of Finance. Finance council members will refine the proposal to come up with a budget that will be presented to voters in May.
Selectmen and Finance Board meetings are open to the public.
“People need to get involved in the town meetings and make their voices heard,” Shoemaker said. “What do you want, and what do you think our needs should be?”
e.regan@theday.com
