(Opinion) Christmas gifts from Hamden to the town’s homeowners arrived a day late. Each gift was a thin, white envelope that contained a single sheet of paper. Printed on the paper, in boldface, were two numbers: the old assessed value of each home and the new assessed value.
Immediately, emails and social media posts flooded the internet as homeowners questioned what these figures mean, why some new assessments were so much higher than the old ones, and what they could do about the difference — because a higher assessment translates, as we all know, into a higher property tax.
Many homeowners are only vaguely aware of how their assessments are related to the way the town spends money and some have asked me to explain how the system works.
First of all, the sum of all the property assessments in Hamden is called the “Grand List” (GL). Revenue (Rev) is collected as property tax from properties on the Grand List and is the main source of funds for running the town. The relationship between GL and Rev is expressed by the following equation (sorry, folks, it’s algebra but it’s very simple), which includes the mill rate (MR):
The Grand List, in thousands of dollars, multiplied by the mill rate equals the revenue that runs the town, or:
GL (in thousands) x MR = Rev
In Hamden, we need more revenue every year to run the town and to pay our debts, so we need a bigger Rev every year.
There are two ways to get more revenue.
If the Grand List (GL) stays the same and the mill rate (MR) gets bigger, revenue (Rev) gets bigger. However, under these circumstances, taxpayers and voters get mad because the Mill Rate has gone up — and everyone understands what a higher Mill Rate means.
However, if the mill rate (MR) stays the same and the Grand List (GL) gets bigger, Rev gets bigger while, at the same time, taxpayers can be lulled into a sense of benign security by their elected representatives, who can assure them that everything is just fine because the mill rate hasn’t gone up.
We all know that the town of Hamden is deeply in debt and requires more revenue with every passing year. Many of us have also noticed that the sale values of properties in our neighborhoods have tumbled precipitously and empty commercial properties are crying out for occupancy all over town. In other words, the Grand List seems to be decreasing in value. However, the politicians want to keep our mill rate down at all costs and they appear to have done so via an increase in the value of the Grand List, which Mayor Leng, at a recent meeting of the Legislative Council, announced is equal to an uptick of 8.1 percent.
How can the size of Hamden’s Grand List have increased by 8.1 percent? Bear in mind that the process of evaluating property is, to a considerable extent, subjective because nobody knows the exact market value of a piece of property until it is sold.
In order to assess the value of Hamden’s residential property, the town has been divided up, subjectively, into neighborhoods that are deemed to include properties of similar value. These divisions have been handed down from assessment to assessment at five-year intervals and little is known, by the general public, about how the boundaries of each neighborhood were initially determined.
Within each subjectively defined neighborhood, the revaluation company hired by the town examines all the home sales for the preceding year to determine whether home values are increasing or decreasing in the neighborhood. Another factor, known as the “multiplier,” is used to increase or decrease, collectively, the values of all the properties in each neighborhood as a whole.
A multiplier of 1.0 is neutral and multipliers of less than 1.0 or more than 1.0 provide subjective comparisons among neighborhoods. Efforts by members of the public to determine how these neighborhood multipliers are determined have failed, despite the requirement for transparency imposed by state statute. We do know that land value (as distinct from the value of buildings) weighs heavily in the equation.
In the 2015 assessments, the multiplier for N40 (a neighborhood encompassing part of Whitneyville, North Edgehill, and the Davis Street area) was an egregiously high 3.1, an increase of 41 percent over 2010, when the multiplier was 2.2.
The resultant huge increases in assessed values in N40 were contested, with a lawsuit ongoing, and the new 2020 assessments are in the range of 15 percent to 8 percent lower, in many cases, than they were in 2015.
Now, let’s focus on 2020 and the new assessments. Three notable facts need to be emphasized. First, the town needs increased revenue. Second, if assessments have gone down in N40, they must have gone up in other parts of town. Third, to increase revenue without raising the mill rate, the total Grand List must increase in size.
In an ideal world, the Grand List represents an accurate accounting of the financial value of every piece of property in town. But the preparation of the Grand List is subject to human fallibility and worse. Let’s call the combination “the Human Factor.”
In 2015, the Human Factor laid a huge tax burden on N40, which helped keep taxes down (and taxpayers happy) in other parts of town. In 2020, the Human Factor contrived to decrease assessments in N40 while, at the same time, increasing the size of the Grand List by a total of 8.1 percent, as announced by the Mayor.
Is this increase of 8.1 percent in the assessed value of Hamden’s residential and commercial property real or is it a figment of the imagination or machinations of the humans behind the Human Factor? If irate homeowners protest their 2020 increases, will 2025 see the Human Factor try to pull another fast one in yet another part of town, just as it did in N40 in 2015?
It is expensive for individuals to contest the Human Factor and many people don’t even understand that the assessment of their property is not totally objective, with Human Factors playing a major role.
Hamden’s taxpayers should never forget that GL x MR = Rev and, if increased revenue is needed, the taxpayers will be providing the money even if the mill rate is unchanged. Moreover, Hamden’s homeowners should make sure that each of them is carrying their fair share of the revenue burden, via accurate assessment of the value of their property, and not a red cent more.
Ann M. Altman was a member of the Hamden Legislative Council from 1999 to 2005 and was twice elected chair of the Planning and Zoning Commission.
I have no idea of whether the assessments reflect fair market value, as the law requires. But the assessment process is more complicated than the author indicates. The comparable sales method she refers to is widely used to value homes and condos. In contrast, the income method is commonly used to value apartment buildings and other commercial properties. The cost method is used for utility facilities, among others. My former boss wrote a brief summary of the applicable law https://cga.ct.gov/2012/rpt/2012-R-0098.htm.
And the formula the author presents only deals with property tax revenue. While this accounts for the bulk of Hamden's revenue, the town receives tens of millions of dollars in state grants and non-tax revenue. If state assistance goes down, tax rates will go up even if the grand list and the town budget remain the same.