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Eating Our Seed Corn

By Mike McGarry

April 18, 2013

The Mayor and his staff do deserve credit for listening to the public and not increasing taxes. Our mill rate of 74 has already put us in the mess we are in - a case of diminishing returns - and adding to the tax burden certainly would be foolish.

However, the Mayor's quote “there is no question that the present path (relying on property taxes) is unsustainable ...” is right on the money. Costs are rising faster than any possible increase in taxable property. The additional taxes on rental property will - is now - making those investments questionable, driving their value down. We are lucky re-val is not for a few years, 2016, because if apartments were valued now, the grand list would take a plunge.

Now, the term “eating our seed corn” might be expected. You see, if a farmer feeds his cows corn, and has no corn grown in season, he may have to feed them the seed for next year's crop. Not a way to success, for sure. When a Courant reporter asked yours truly what my opinion was of the financial mess we are in, the response was “we are eating our seed corn.” This budget certainly, sadly, reflects just that cutting the fund balance (savings account) by $13.5 million, shifting equipment purchases into the capital budget, selling assets (usually okay here) and slicing departments that create revenue (the town clerk's office is less than half its historic size) and using significant pieces of other accounts to pay bills all show disaster ahead.

How many rabbits will be available next year? The year after? The hat is empty. At this time, the only answer is an expanded grand list (more taxable property) but our 74 mill rate drives away investors and businesses. A high official who controls public investments remarks “even if we give money away, the businesses we want have to make a profit. At 74 mills, that is hard to do.” If we can't give money away, we are in big trouble.

A new tax system must be devised. Other cities and states around the country are changing. We are going to have to look at them. More to come in future columns.