December 16, 2009 12:29 pm

Investing In Your City, A Tale of Norwalk versus Stamford

There’s a type of populism that goes like this, we don’t want our tax dollars to subsidize developers. But like the federal tarp bailouts, the beneficiaries of investment in development is not just the developers, its the residents and tax payers of Norwalk.

How can this be so?

You have to start with an understanding of finance. The taxes you pay are determined by very few things. One is how much taxable assets are out there, otherwise known as the grand list. The finance department spends months counting all the expenditures the City is the hook for and then takes that number and divides it by the grand list to arrive at the average mill rate.

Tax Levy�$ 246,269,456
Divided by: Net Taxable Grand List�$12,571,603,519
Equals: Average Mill Rate�19.589

Because we are Norwalk, there’s just not one mill rate. No we have taxing districts that confuse things, and so here’s the chart reflecting the actual mill rates for Norwalk in 2008.


103	1	Norwalk 1st	19.779	2008
103	2	Norwalk 2nd	19.779	2008
103	3	Norwalk 3rd	19.779	2008
103	4	Norwalk 4th	19.840	2008
103	5	Norwalk 5th	19.365	2008
103	6	Norwalk 6th	18.226	2008
103	7	Norwalk 7th	18.226	2008
103	8	Norwalk 8th	19.779	2008
103	9	Norwalk 9th	19.779	2008
103	10	Norwalk Motor Vehicle Rate	24.355	2008
103	1	Norwalk 1st No Garbage	19.304	2008
103	2	Norwalk 2nd No Garbage	19.304	2008
103	3	Norwalk 3rd No Garbage	19.304	2008
103	4	Norwalk 4th No Garbage	19.365	2008

Mill Rates for all towns 2008 Grand Lists.

Stamford has managed to whittle down their special services districts too a more manageable number.

135	0	Stamford Motor Vehicles	26.50	2008
135	1	Stamford “A”	16.82	2008
135	2	Stamford “B”	16.45	2008
135	3	Stamford “C”	15.68	2008
135	4	Stamford “CS”	16.01	2008
135	5	Stamford Pprop Other than MV	16.82	2008

And towns like Shelton, are simpler still.

126

Shelton

18.61

2008

Five years ago Norwalk and Stamford were about $3.5 billion apart in total grand list value. Call it 2 or 3 big developments and we’d be even. Today we are just under $12 billion apart. Call it the price of not keeping pace.

Stamford 2008 Grand List $24,263,665,000

Stamford 2003 Grand List $11,092,432,000

Norwalk 2008 Grand List�$12,571,603,519

Norwalk 2003 Grand List $7,481,828,000

The tax benefit to residents of Stamford? It looks like a decline of close to 10 in the millrate.

Stamford Motor Vehicles	30.25	2003
Stamford “A”	26.16	2003
Stamford “B”	26.03	2003
Stamford “C”	24.59	2003
Stamford “CS”	25.11	2003
Stamford Pprop Other than MV	27.44	2003
Norwalk, Motor Vehicles	NA	2003
Norwalk 1st	31.87	2003/Phase-In
Norwalk 1st No Garbage	NA	2003/Phase-In
Norwalk 2nd	31.87	2003/Phase-In
Norwalk 2nd No Garbage	NA	2003/Phase-In
Norwalk 3rd	31.87	2003/Phase-In
Norwalk 3rd No Garbage	NA	2003/Phase-In
Norwalk 4th	31.98	2003/Phase-In
Norwalk 4th No Garbage	NA	2003/Phase-In
Norwalk 5th	31.14	2003/Phase-In
Norwalk 6th	29.63	2003/Phase-In
Norwalk 7th	29.63	2003/Phase-In
Norwalk 8th	31.87	2003/Phase-In
Norwalk 8th No Garbage	NA	2003/Phase-In
Norwalk 9th	31.87	2003/Phase-In
Norwalk 9th No Garbage	NA	2003/Phase-In

Seeing that Norwalk had as 2003 phase in I looked to see what 2004 looked like. I think it’s safe to say that Norwalk saw a 5% reduction in mill rate in the same period.

Norwalk 1st	25.1	2004
Norwalk 10th	25.21	2004
Norwalk 6th	23.47	2004
Norwalk 5th	24.56	2004
Norwalk 4th	25.21	2004
Norwalk 3rd No Garbage	24.45	2004
Norwalk 3rd	25.1	2004
Norwalk 2nd No Garbage	24.45	2004
Norwalk 1st No Garbage	24.45	2004
Norwalk2nd	25.1	2004

From a practical standpoint, this means that for your $300,000 in assessed value in Stamford your real estate taxes in 2003 and 2008 respectively would be $7800 and $4800 and in Norwalk they would be $7500 and $6000.

So what would have happened if the Norwalk grand list grew in the same proportionality as Stamford’s list? Our grand list would be closer to 16,347,794,000 and that would have resulted in a 15 and a tax bill of $4500 on our same hypothetical 300k assessed value.

So the next time your not so friendly populist activist out there starts giving you this free investment advice about how bad investing in development with tax payer subsidies is, think about how much more of a return it would have been on your tax dollar investment has Norwalk made a better effort on reinvesting in itself as a city. Wouldn’t it have been nice to see a tax bill that keeps going down because the City of Norwalk reinvests in itself?

I’m sure all you finance wizards out there will notice I rounded numbers and didn’t factor in some variables, so feel free to correct the basic math.

Democrats

TG, very interesting except you forgot to mention the effects of intense development on how the city looks, traffic etc. That’s why I chose to live in Norwalk and not Stamford 30 years ago. Norwalk came to look more like Stamford all the time, traffic is much worse now.

turfgrrl

Democrats: That certainly is a consideration, not so easily broken down by numbers. But Norwalk is 27.2 square miles, the same size as Manhattan. Is there a balance between open space, density, industry and residential? That is the dilemma facing us now. It is cheaper to allow sprawl, but is it the right thing to do?

Urbanist

TG, You are so right. Stamford has been much wiser and more effective in cultivating development and investment not only through the wise investment of their own funds, but also in helping development along with tax breaks, expedited approvals, smarter zoning and parking codes, and so forth.

If you want results, you have to prime the pump. Look at 95/7: they’re only now sppending money on infrastructure that was granted to the city 7 or 8 years ago. Aside from being inefficient, due to sitting on money while costs go up, this investment could have helpeed that development attract a tenant while the business cycle was booming. Now it will have to run through the mill an probably be replanned by a new generation ofdevelopers. See tthe report recently issued by the city stating that a whole new round of investment and incentives will be needed to get it going.

Secondhand Rose

That seems to be the modus operandi of Norwalk – plan a development, then let it sit for a decade or so and then re-plan, re-study, re-finance. And the whole thing, when finally begun, ends up costing millions more than it would have if it were just built at the time it was first approved. It’s no wonder everyone grouses about the costs involved in these projects, because when all is said and done, nothing gets started in the administration that actually planned the development. Meanwhile businesses are tied up in litigation as they try to keep their property from being taken away from them by eminent domain (such as Maritime Motors), and the rest of us have nothing to look at except empty lots growing a profuse variety of weeds.