The Norwich Town Manager is proposing a town tax rate of $0.5146, an increase of 2.20% from last year. The Selectboard will take the matter up at its July 10 meeting.
The municipal tax rate is increasing, even though annual budget is 5.12% LESS than last year. Although the funding of nonprofits through monetary articles increased by $70,000, total town expenditures are lower by 3.31%. See "Total Town" line item below for FY 20.
Source: Page I-13 of 2018 Town Report.
Why are taxes going up if the town budget going down? I hope the Selectboard touches on that question at its meeting on Wednesday.
To me, 'a' reason is that last year, the Selectboard offset or subsidized the property tax rate by using cash in the Undesignated Fund Balance (UFB), the Town's emergency/rainy day fund. See What’s an "Undesignated Fund Balance"? Last July, Selectboard authorized spending $264,290 in the UFB to "buy down" the property tax rate. Town Manager Herb Durfee is not proposing a buy down this year and voters have not authorized such use of the UFB.
Grand List values are seemingly not a factor as the Grand List's value increased slightly from last year
A revised breakdown of the tax calculation released by the Town Manager last Thursday is set forth below. The good news is that homestead school property tax rate is lower by 2.27%, as shown in the "Summary". The nonresidential school property tax rate is going up.
The homestead school property tax rate is determined by the State using a complicated formula related to local spending for schools. The nonresidential school property tax rate, for all real property other than homesteads, is uniform throughout Vermont.
Overall, combining the homestead school rate with the municipal property tax rate, the net result is a 1.31% decline in the combined property tax rate on homestead property. HUZZAH! The combined nonresidential property tax rate is going up. School property tax rates are a discussion for another blog post.
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