THE MILL RATE, GRAND LIST, AND REVALUATION

One of the roles of the Board of Finance is to set the mill rate. The mill rate, which in conjunction with assessed property values, determines the amount of tax a property owner will pay. All the property in town is listed and assigned a value. This list is called the grand list. It is made up of all the land, buildings, vehicles, and commercial property existing in Southington. Values are assigned by performing an assessment for real property and applying standards for vehicles, and by other valuation methods for business property. The grand list is always made up of various aspects of quantity (The number of assets) and price (The value of the assets). If you construct a new house or buy a new car, quantity is added. So each year we can expect the grand list to increase for new construction, new equipment and new vehicles and decrease for existing vehicles that typically decrease in value annually with age. This year we will experience revaluation of the values on the grand list. The town is mandated to reassess values every five years so new values are being applied this year. At this time I will not speculate on whether values will increase or decrease on an overall net grand list basis. It is always likely that some properties will increase while others decrease based on the market demand that drives the market value. It is too soon to speculate on the overall net impact of the revaluation in Southington. If the net grand list goes down the mill rate will go up to generate the same amount of tax and conversely. The intention of revaluing the grand list is not to increase taxes. The intention is to apply a current market value assessment to the property. Once values are established, taxes are levied on the total grand list and the owners of property are required to pay their proportionate share.  Therefore revaluation is performed to ensure property owners are paying their fair share of the taxes required by the town. Questions can arise when the revaluation causes some tax payers to pay more, and some to pay less and others to pay the same amount.  As an example let’s assume there was a grand list with only 3 houses, each assessed at $100,000 so the total grand list is $300,000. The town needed $7,200 per year to provide services so the mill rate was set at 24. Each person paid the same tax of $2,400. Then along came revaluation. Mr. A’s house increased to $110,000, Mrs. B’s house stayed the same $100,000 and Mr. C’s house dropped to $80,000. The grand list is now $290,000. The town still needs $7,200 per year to operate so the mill rate was reset to 24.82 mills. Now A pays  $2,731 and B pays $2,483 and C pays $1,986 all totaling the same $7,200 in tax. Folks need to understand that valuation or revaluation is never intended to generate more tax revenue. Valuation is performed to set the basis of who will pay what percentage of the tax revenue needed by the town. In a completely separate budget process the town determines how much money is needed from tax revenue.

John Leary has served on the Southington Board of Finance since 2009 and currently serves as Board Chairman. He is a Republican.

​