46 thoughts on “Op-Ed: Reval Reveals Tax Shock

  1. Chris you are a very smart !!!!! All things are not equal — seems the country club assessment went down 11 million — some high end homes
    24-34% down — a lot to look at — it will be a while to look at all the data
    at the meeting they said commercial went up and condo’s went up
    otherwise the residential alone went down more then the $500 million

  2. Thanks Chris. It sounds like you’re saying that if a property’s assessed value has now been determined to have, for example, decreased 4% during the October 2013 – October 3018 time frame outlined in the revaluation letter we’ve all just received, then taxes will go up accordingly. But how will this work if taxes are based on the mill rate? (I may be misreading your letter, thanks.)

  3. When we moved from NYC to New Canaan years ago, we didn’t compare tax rates of neighboring towns. We fled a hyper-inflated housing market in the city, sought excellent schools for our kids, and wanted a vibrant, truly walkable town center. None of the neighboring towns came close. Though the real estate values out here were also inflated, we were still ahead then, and feel the same way now. Our own assessed value has dropped, but we felt we were in for a correction. Prices were unrealistic and unsustainable, even though we paid them. I worry about hinging so much on real estate values.

    • Those are interesting points, however, not everyone moved to New Canaan from NYC. So it’s unfair to say that real estate values shouldn’t matter by using that comparison. They do matter and the fact that property taxes are mostly not federally tax deductible further magnifies the situation occurring.

      The erosion of the tax base and shifting of the property tax burden, as the writer describes, can lead to many problems. The carrying costs of certain homes increases. It could push out the older homeowner on the fence about moving/retiring.

      If our taxes keep going up, we do lose an advantage versus towns closer to NYC. The commute from New Canaan to New York is awful. The difference between real estate values in “commuter towns” versus “non commuter towns” is staggering. Many people do not want to spend 1 hour+ on the train (before getting to the station or their office). New Canaan has had relatively cheaper taxes for years versus other towns (Stamford, most of Westchester, etc.). If this advantage goes away, someone can choose to move closer and have a shorter commute.

      Although you may not have, I did research the tax situation and relative competitive advantage of New Canaan versus Westchester, New Jersey, and other neighboring CT towns. I commute daily so this all came into play. The lower taxes helped steer my decision and accept a longer commute. If that benefit erodes, then that’s a problem.

      And this ignores Connecticut’s stupid vehicle tax. Yes, it’s stupid. New Canaanites have benefited by having a low mill rate versus other towns, so taxes on the same vehicle have been lower in NC when compared to Westport or Stamford. This benefit can also disappear. Again, NY and NJ don’t even have this tax at all.

      So yes, taxes do matter. Real estate values do matter.

      • Sorry, wasn’t implying that real estate values don’t matter. Meant that values were extremely inflated and I’ve not been surprised that the grossly inflated price I paid for my property has dropped. Was expecting that, but taking into consideration everything I’ve gotten from NC in the bargain I’m still ahead.

  4. Hard to argue with the writer:

    Further tax increases whether they are here or from Hartford, will solidify the view that CT is an exodus state. The increased Democrat control of the State House and Senate as a result of the latest election, only assures that nothing to improve the CT economy is pending except more of the failed “tax and spend” methodology.

    New Canaan residents can no longer fund endless spending. Land purchases (Valley Rd) further education budget increases..the list goes on and on. The result of which will continue the downward trend of home values further supporting he choice to move somewhere more affordable.

    • Peter Bush Swanberg is 100% correct. My head is exploding when I see the real estate the Town of New Canaan has been picking up, considering buying, excluding properties picked up by Land Preserve Trust. I see the New Canaan Library is looking for funding to expand now. It makes no sense for the town to be in the land owning business to begin with, other than to house necessary government. Why was the Town Hall upgraded with the specter of “the Teen Center” behind it, without thinking now is an opportunity to bring the Police back to Town Hall? Why was Irwin Park purchased to begin with? Why are we discussing renovating Irwin Park? Vine Cottage and Irwin ‘park’ should be put up for sale, Vine Cottage with either residential opportunity or commercial. It seems to me that the governing decisions being made in New Canaan are not unlike an open check book these days, with raising the mil rate as a high probability.

  5. Now is the time to reconsider our Town’s spending pattern. Let the Town Fathers..and Mothers… tell us just how they WILL moderate this unsustainable spending to keep New Canaan competitive. We who have the “power of the purse” and the power of the vote will need to take action.

  6. An anecdotal comment…my daughter’s condo assessment has increased by a whopping 39% with this revaluation! For anyone in a condo that is an awful big change and real money out of their pocket.

    It will be curious to see how the Town of New Canaan deals with this new reality. And stop blaming Hartford for the tax increases…you’re steering the boat!

  7. Ever increasing property taxes do in fact deflate real estate prices. And while lower housing prices benefit new buyers, the unrelenting escalation of property taxes due to unsustainable increases in New Canaan’s town budget will likely scare off these potential buyers. Sure, there are still many positive attributes of our town, but the commute to NYC and high property taxes (capped at $10K for itemized filers) are two areas of concern. The train ride to NYC is advertised as 70 minutes from the town center, but in reality it is closer to 75 minutes – that’s 2.5 hours round-trip, or 50 hours a month – a pretty tough sale no matter how good the schools are. So if you desire a better return on your real estate investment, I would suggest that you vote for balanced budgets and pray that Hartford improves MetroNorth.

  8. Local government ” reverses its current course on spending” should be the introduction to their announced survey and all other statements about the upcoming budget; otherwise, we are simply going to get a list of unnecessary projects that some wish for and may even be approved. We need to cut back to a zero budget increase, including BoE. The validity and justification for doing so is justified by the facts alone you all have expressed above , but there are many other reasons to do so as well…think bond ratings, for one.

  9. Roger Williams statement at July 2015 Republican Caucus. It’s a shame that more voters did not take his message seriously.
    Roger Williams: “Right now if you look at it, we have a $90 million, 5-year capital plan, we have a Board of Ed that’s been chugging along at 4 percent annual increases, we have a town around 2.5 percent, we have healthcare rising at 15 percent. If we do nothing—nothing—our taxes are up by 50 percent in six years. Now is the time to have a serious, honest discussion about what this town can afford, what kind of taxes we want to impose upon the citizens who live here, and then we budget back to what we can do.”

  10. Unfortunately Town leaders and residents have never created a plan with ConnDOT Rail to make incremental improvements to the New Canaan line in order to increase frequency of express service to GCT beyond a few weekday peak hour trains. In the meantime, service frequencies on the New Haven Line has improved measurably. This is another reason I find New Canaan to be at a competitive disadvantage vis-à-vis other bedroom communities, such as Darien and Greenwich.

  11. The reval reveals serious problems with declining home prices and increasing government spending. So what are some solutions?

    96% of our current municipal leadership recently indicated that the current level of government spending or more government spending is acceptable to New Canaan taxpayers. If that question is fairly submitted to those taxpayers in the upcoming town survey, it is unlikely that it will show 96% of taxpayers to be quite as enthusiastic for tax hikes and spending hikes.

    Instead, to protect New Canaan taxpayers, we should:

    1. Immediately freeze discretionary spending.
    2. Reduce our mill rate beneath neighboring towns through attrition over the fiscal year.
    3. Refocus education spending around the classroom.

    We can reduce non-teaching expenses – duplicative back office headcount, extra (recently renovated) real estate for layers of non-teaching bureaucracy, and excess de facto compensation beyond the union contract. Let’s get Education out of the finance business, PR business, and real estate business and refocus it on the teaching business. We could split savings between the taxpayers and the classrooms so that homeowners get relief while students benefit.

  12. The Town of Darien elected officials one year ago speaking of their budget…

    In the past year, the town ( of Darien) has been taking steps to keep itself attractive to potential home buyers and fiscally fit. That was another strong theme of Stevenson and Zagrodzky as well as the other two State of the Town speakers: Planning & Zoning Chairman John Sini and Board of Education Chairperson Tara Ochman.
    a quote from Darien’s budget meeting one year ago.

    Wouldn’t it be nice if our New Canaan officials, elected and appointed, had the same mindset? I am not hearing that from any of them…something needs to change.

  13. Chris–this seems to be a hot topic and I am interested to hear your thoughts about education and budget. As New Canaan has no real industry what do you feel keeps our real estate values as strong as they are? It’s that education is the driver for New Canaan’s economy and cutting spending in education will come back to bite the Town in the near future. I would think you have shorted New Canaan in the longterm market based on some of your comments. You are correct in your view that New Canaan might have too many Town-owned buildings—but when the issue of selling or repurposing those 28+/- buildings are raised it seems few residents are in favor. While being fiscally conservative is where we should strive to be—we have to make sure we don’t over correct.

  14. Arnold, while educational quality is strong I and many others believe there is an opportunity to save millions in the BOE budget with little to no impact on classroom learning. I would encourage you and others to do more analysis if that sounds pie in the sky, or I can provide anyone with analysis that myself and others have done if you email me at jdb435@nyu.edu. Don’t presume there is isn’t significant waste or inefficiencies in any government body, whether it’s New Canaan or elsewhere. Unfortunately, any analysis of the BOE is compromised by a lack of granular breakdowns in budget line items. For example, a granular breakdown of money spent for conferences, travel, administrative retreats, outside consultants, tuition reimbursements, etc. I gave a speech at the last BOE meeting where I give a short list of examples of areas of concern, including:
    • Increasing full time equivalents by 9% over the last 10 years while enrollment is up 2%.
    • At current spending of $22,000 per student we could maintain the same ratio of full time equivalents per student and realize over $2 mm in annual savings from the decline in students over the last two years and a further $4 mm if NESDEC’s projected enrollment declines over the next 3 years are close to accurate.
    • Spending $975,000 on renovations to leased administrative offices ahead of a planned move when we have 57 town-owned properties.
    • Hiring outside consultants for over $30k in one year on social-emotional learning programs when we spend close to $2 mm a year on in-house psychologists and social workers.
    • Not allowing a Town Council member to even observe labor negotiations when BOE wages and benefits consume half of taxpayers’ dollars.
    • Two separate “Administrative Retreats”-– one on Emotional Intelligence and the other a Happiness Workshop — at an expensive restaurant in Darien with a publically undisclosed specific expense. With all of this spending on wellness initiatives that have questionable efficacy, why are we dragging our feet on the school start time initiative that has proven efficacy?
    • Outside of expense savings there are revenue opportunities from having a least a dozen empty or “underutilized classrooms” that hasn’t been discussed.

  15. Arnold — teach more students and make money — thus cutting the tax burden — I showed how the BOE could bring in millions ($6 million) by
    opening our schools to out of town students (which we do now
    for out of town teacher students) We have 27 empty classrooms just in K-4 and NESDEC says we will have 1,067 in Saxe in 10 yrs
    Lets all stop just increasing taxes if we can find a better way
    The TC members who are pro spending on schools have embraced
    this new potential source of income (asking questions) looking into it– the alternate HS will bring in outsiders but only make $150,000 a yr
    Your people were clear when they took up the the question of increased students as part of you 100+ condo’s — they said ” the state say NC
    student age populations will decrease by 34% in the next 10 yrs”
    I wonder who gave you that info?

    • Richard, you wrote a very good op-ed on the BOE and the empty classrooms. I have a couple of questions – what were the knock on effects of the projected increase? Were more teachers hired to support the new classrooms and estimated increase in students? More computer equipment purchased? It seems this should cut as this is low hanging fruit as the projected increase never materialized.

      • well the population did increase from around 15,000 to
        19,000 over the last 30 yrs — so there were many increases in the BOE budget — main reason increase students — but the BOE has never ever look to lower cost — I remember
        when I was still working that they spent $250,000 to wire the HS for the internet — only years latter they went to wifi
        But the thing about the $250,000 back then was I question
        the cost — at GE capital we had a contractor wire the whole
        building at longridge for $60,000 — So a good question
        to ask is why do we seem to pay more for everything
        We need one purchasing manager for both the schools and the town

  16. It appears that taxes / valuations assessment / on condos and homes in town are going up although these properties actual values are going down , while the estates and large homes taxes are going down. These large properties almost have no value in a potential buyers mind right now .
    Result real estate market will worsen and the end result will be that an even greater than now percentage of people moving in will look to rent. We will in essence become a renters town. That is a huge problem for a variety of reason. Renters take less interest and involvement in the town, the school, the churches , the towns programs , all we have to offer. They tend to take and not give.

    • Thank you for posting a comment, Mimi. I must say I find the comment on those who rent in New Canaan a gross and inaccurate generalization. The renter’s market caters not only to those who are waiting to buy but also to those who cannot afford to buy home here or for whom home ownership simply doesn’t make sense. These often are people deeply invested in the community, with kids or grandchildren in the system, who coach or cheer from sidelines, serve on local boards and commissions and help run nonprofit organizations. I would also add that rent from tenants goes to property owners who pay mortgages and taxes. Dividing residents into owners and renters is unhelpful, false and small, though we may acknowledge that one type helps real estate professionals more directly than another. New Canaan is a community inclusive of everyone here—as the newly created Tourism & Economic Development Advisory Committee shows, that also includes people who run important organizations who reside beyond the town line.

  17. Interesting — I found out 2 yrs ago from the BOE
    family move in but they also move out — it’s net migration
    to my surprise — about 240 students move out of town each year
    and are replaced by 240 plus or minus — 240 would = lets say
    2 children per family — so about 120 family’s decide to move out of town
    That number may have gone up — what we should find out is why?
    These are not empty nesters moving out
    it would be good to know — taxes to high? – schools not what
    they thought they were? or other reason like jobs moving
    Saxe does have this odd thing — the 4th grade does not all move to 5th grade — on average -21 from the 4th grade to 5th grade — if we are going to fix the problem it would be nice to know what the problems are

  18. We have better ideas than a tax hike; in fact we voted for better ideas:

    “… I’m willing to be the “tightwad” who tries, and I have a list of ideas to pursue.”
    – Tom Butterworth

    “We have to be fiscally prudent regarding our Town budget. I support zero-based budgeting and would parse line items to verify reasoning for spending increases, and communicate that to the public.”
    – Liz Gores Donovan

    “Figure out how to have excellent schools, fresh paving and a new library within a zero growth budget… New Canaan is fourth lowest mil rate. One year of zero growth budget and we can be top three again.”
    – John Engel

    “I favor limited spending.”
    – Rich Townsend

    “Our Departments are committed to tight budgets while dedicated to providing services at a level expected by our citizens.”
    – Penny Young

  19. Chris-
    Those quotes should be in a newspaper ad prior to budget deliberations as a reminder to them and those who voted them into office.New Cannan’s only industry..real estate..is in a deep recession and now is not the time to talk about any increase in taxes…or buying/building new buildings. We have over 50 versus Darien’s 6.

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