The Advocate did a nice article on comparing Stamford to surrounding towns. Stamford, has managed to do what Norwalk is still struggling with –transform its downtown into a livable urban landscape. The tale of the property taxes tells the story:
Among the six compared municipalities, New Rochelle had the highest property tax burden, 1.6 percent, when measured as the proportion of median real estate taxes paid to median home values.
Greenwich had the lowest property tax burden, at 0.5 percent.
Stamford fell in the middle of the pack, at 1.0 percent, a lower burden than that of Norwalk, which came in at 1.3 percent.
Considering that the median income in Norwalk is also lower, this translates into Norwalk residents feeling the pinch of property taxes to a greater extent than any of the six towns mentioned. The reason is that Norwalk still hasn’t taken steps to increase its Grand List significantly, and particularly with commercial development.
Coincidentally there’s an article in the Hour that talks about expanding the Enterprise Zone.
Redevelopment Agency officials maintain that extending the zone, which would offer tax abatements to more property owners, is needed to make Norwalk competitive with Stamford and get redevelopment efforts off the ground.
Councilwoman Nora K. King, however, said she is inclined to vote against extending the enterprise zone. King said the city should streamline its planning process rather than offer tax abatements to developers.
“We have a great city and I think builders have an opportunity to come in and build and develop here without relying on the individual taxpayer carrying the weight,” King said. “I think a better solution is to figure out how to streamline the planning process for the City of Norwalk and worry less on providing tax incentives and tax breaks.”
The Redevelopment request, if approved by the council and the state Department of Economic and Community Development, would extend the existing enterprise zone southward along Woodward Avenue and northward into the Reed Putnam area, where Spinnaker Real Estate Partners LLC plans to build District 95/7 SoNo.
Within the existing enterprise zone, 80 percent of local property taxes are abated for a five-year period. The state reimburses the city for half of the abated taxes, leaving the cost to the city 40 percent, according to the agency.
Moccia, who supports extending the enterprise zone, noted that nothing is being built at the District 95/7 SoNo site.
Stamford developed its urban core by being smart about incentives, fast tracking development projects, and recognizing that the only way to reduce property taxes on individual homeowners was to increase the Grand List. Yet, we have many in Norwalk, some even in politics, that don’t understand the basic calculations that are used to determine taxes. If you are one of them, that means you Nora King, then I urge you to read this explanation:
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
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.
Yes, it’s an investment in your future to craft policies that offer tax abatements. An economy, as we’ve seen globally is fragile. You need all kinds investments to spur activity. Expanding the Enterprise Zone is one that all council members should embrace, and as quickly as possible. The fact that this issue was brought up in December and it has taken till now to get to a council vote is mind boggling.
And as an update, the Federal Government is reporting that the TARP bailouts have cost less than anticipated. The reason is that the stocks that the government took is exchange for bailout money have all risen price, netting capital gains that were unanticipated.