Compost Headlines: Please Hold

Is the reference to the "Gub" from a Woody Allen movie?

Yes! Take The Money And Run

A couple of clarifications.

UI and Eversource have a monopoly on shipping electricity, not selling electricity. They are the utility equivalent of FedEx, albeit without the competition from UPS et al. There are six competitive suppliers serving the UI residential market, all of which have plans that are cheaper than UI’s standard offer, including some that are greener. (All suppliers must at least meet the renewable sourcing requirements that apply to the standard offer.) If you are currently on standard offer, you can switch to a competitive supplier without charge. The Public Utilities Regulatory Authority has a user-friendly website where folks can compare the various plans. https://energizect.com/rate-board/compare-energy-supplier-rates?customerClass=1201&monthlyUsage=750&planTypeEdc=1196

Wallingford is one of six municipal electric utilities in the state; it is not a co-op. CT has a very strong home rule tradition. I was at the table when the legislature deregulated the electric industry 25 years ago. One of our first decisions was not to involve the munies. The munies are tax-exampt, which is part of the reason their rates are lower. They also are not subject to the requirement to get a large and growing share of their power from renewable resources. The utilities and competitive suppliers currently must get 26% of their power from Class 1 renewables (in practice, largely windpower from northern New England). This proportion will grow to 40% by 2030. More importantly, the munies have greater flexibility in buying power than the utilities. Here is a memo I wrote explaining why muni rates have been lower than utility rates (quite old, but still largely true) https://www.cga.ct.gov/2007/rpt/2007-R-0014.htm. State law effectively precludes forming new munies; the youngest was created nearly a century ago.

Paul, any chance of getting the assessor in for an interview to explain his methods?

As I said elsewhere in the NHI, valuing empty lots with development potential is seriously difficult. And the income method the assessor primarily uses to value commercial properties is legal and widely used. But as you, Tom, and I have discussed, the valuations of large commercial properties have routinely been substantially below their actual sales prices. In some cases, these properties were appraised at values less than the price they sold for several months before revaluation. In contrast, the appraisals of small multifamily buildings have been much closer to their recent sales price (such buildings are sold regularly, making it easier to determine their fair market value).

I think the assessor should primarily use the cost, rather than the income, method for valuing newly constructed commercial buildings, including multifamily buildings with more than four units. If a developer spends $10 million on a building, there is a good argument that this is a reasonable estimate of the building’s fair market value. This method could be used for the period is eligible for the property tax phase-in (five or seven years, depending on whether the building is in an enterprise zone). The cost method factors in depreciation as well any additions to a building after it goes up.

Assessors can’t cherry pick valuation methods to maximize tax revenue for individual buildings. But under CGS § 12-63b they have broad discretion in choosing how much weight to give to give to the cost, income, and comparable sales methods when valuing large commercial properties.

But Kevin am I right that people with financial hardship status cannot change suppliers?