
Generally, if the mill rate goes down, taxes go down. But that’s not true in a year where reevaluation takes place. For taxes to remain stable when reevaluation takes place the new mill rate needs to be compared to an adjusted mill rate which takes into account the increase in the Grand List (the total of taxable property) during the reevaluation.
Derby’s Grand List this year, with reevaluation, grew from $737,450,933 to $822,223,564, an approximate 11.5% increase. So, for Derby’s taxes overall to remain stable the current mill rate of 43.869 would need to drop to approximately 38.82 (43.869 * (100 – 11.5)). The Mayor’s budget, as submitted to the Board of Apportionment and Taxation (BOAT) had a proposed mill rate of 40.22 or an increase over the adjusted mill rate of 1.4 mills, approximately 3.6%. Unless the BOAT makes significant cuts to the Mayor’s budget it appears on average taxes will go up again.
The situation can be different for individual homeowners, however, depending upon their change in the assessed value of their home. To figure out an individual homeownwer’s tax situation during reevaluation the adjusted mil rate needs to take into account the homeowners specific change in assessment. The homeowner can do that by calculating the percent change in their assessed value and multiplying it by the current mill rate arriving at their own personal adjusted mill rate based on the change in the assessed value of their home. To do that you take the previous assessed value and subtract it from the new assessed value. Then you divide that number by the previous assessed value and multiply it by 100. That will give you an adjusted mill rate based upon the change in your assessment. If the mill rate adopted with the budget is higher, your taxes are going up.
Here’s an example. If the former assessed value on your home was $150,000 and the new assessed value was $165,000, that would give you a change in the assessed value of $15,000 ($165,000 – $150,000) When you divide $15,000 by $150,000 you get .1 which when multiplied by 100, would yield a 10% increase in assessed value. You would then subtract that 10% from 100% giving 90% and then multiply that times the previous mill rate to get your individual adjusted mill rate. In this case that would be 43.869 * 90% or .9 which equals approximately 39.48. So anything above that would result in a tax increase for the homeowner.
Generally the overall increases by classification coming out of reevaluation don’t look good for homeowners. The assessed value of single family homes, which unfortunately make up over 60% of the real estate property tax base, went up approximately 17%. The assessed value of multi-family homes went up 26%. The assessed value of commercial properties went down 5%. This means that the tax burden continues to shift towards and become heavier for the residential homeowner, instead of the commercial base.
I hope residents find his information helpful. If they have any questions please feel free to email me at wmayhew@derbyct.gov.
Walt Mayhew
City Treasurer