Balancing the Tax Burden

Newtown Republicans in partnership with other elected officials have spent the last number of years making progress on eliminating deficit spending. This means that we pay for our operational expenses as we go instead of borrowing from our savings.  We have also been striving to increase our fund balance (savings account), meeting our short-term goal of 8% and on our way to achieving our longer-term goal of 12%. Additionally, we have made great strides in reducing our operational costs as well as our overall debt, reducing it from 10% to 9% of our overall budget.  And, still, our taxes continue to rise.  Republicans are hearing Newtown citizens ask, “Why?”

First, we need to know where tax revenue is coming from. Residential property taxes fund 89% of the Town budget while commercial taxes fund approximately 7.7%, and the rest is in the form of motor vehicle taxes and intergovernmental revenues.  Intergovernmental revenues (mainly revenues from the State) have been gradually decreasing, as have “local” revenues tied to the economy, such as conveyance fees on real estate, building permit fees and interest from investments.

The manner in which Newtown generates its revenue is, in our opinion, out of balance.  If you compare the contribution of commercial property tax in Newtown to other similar communities, you will see many enjoy a larger contribution from their commercial sectors and thus are more able to mitigate the tax pressure on local households.  Here are a few examples: Brookfield is at approximately 15.3%; Trumbull approximately at 13.7%; and Ridgefield approximately at 10.9%.

It seems obvious that all we need to do is add commercial development.  However, there are a couple of other factors that need to be taken into account.  The first question that needs to be considered is, “What does it take to reduce taxes by one mil?”  In Newtown, one mil equates to $2.98 million in revenue.  To understand this impact, the top five commercial taxpayers in Newtown are Connecticut Light and Power, Sand Hill Plaza, Iroquois Gas, Newtown Shopping Village and Newtown Savings Bank.  Together they generate just over $2.6 million in tax revenue.  You have to ask yourself, “Are you willing to add this much commercial development and possibly more in order to give residential tax payers relief?”

Newtown Republicans believe we need to go down this path if the commercial development is in the appropriate areas.  We need to strike the right balance, as we believe Newtown’s rural character must be preserved while providing for additional commercial development.  To that end, Newtown Republicans have endorsed the strategic plan of the Economic Development Commission that states its major goal is to “…reduce the burden of taxes on individual homeowners by increasing the commercial/industrial assessment portion of the Newtown Grand List by one percent or approximately $43 million over the next five years.”  Newtown Republicans have also supported a new fast-tracking policy that allows businesses to move more quickly through the zoning and land-use approval procedure.  There are a few significant actions that need to be considered in the near term if we are to grow and re-balance our grand list.

Newtown Republicans have endorsed the first of these efforts, which is to provide sewers for the portion of Route 6 that extends from the top of Mt. Pleasant to the current installation at Maplewoods.  This corridor has considerable development potential, is commercially zoned, and is in concert with Bethel’s efforts to achieve the same goal. 

A second initiative is to address properties that are underutilized, delinquent in taxes, and/or unsuitable because of environmental hazards.  Three such properties are the Batchelder site, the former cleaners near exit 10 on Churchill Road, and the former garage on Glen Road, all of which are in the process of being converted.  Each of those properties should be returned to the tax rolls. Currently, none of these properties are generating tax revenue.  

Finally, we need to implement a development plan for Fairfield Hills and for the Tech Park at the end of Commerce Drive.  The former has the potential to emerge as a significant town center for civic, social, cultural, and recreational use with a prudent commercial presence. The latter has the potential to develop as a significant high-end commercial complex.

What do Republicans Think? 

Newtown Republicans believe we have solid and effective financial policies in place at all levels of government.  We must now partner those policies with commitments and actions that grow our commercial/industrial grand list in ways that respect our commonly held values and enhance the qualities we enjoy.  If we do not focus on this effort in the short term, then we will continue to place increasing pressure on a taxpaying public who has made it clear that they are reluctant to bear the burden any longer.  Tax relief is a Republican priority.  We believe one of the ways it can be accomplished is by adding commercial development.  We understand it will be challenging but will benefit every taxpayer.