The mill rate for the 2011-2012 fiscal year was approved during Tuesday evening’s Town Council meeting. The new rate of 24.5 mills represents an increase of .85 mills relative to last year’s rate of 23.65 mills. According to town Finance Director Jim Wren, an increase of .97 mills was expected, but recent changes to Governor Malloy’s initial budget numbers allowed for the slightly smaller increase.
The adjustment was due in part to changes with the PILOT (payment in lieu of taxes) grant for Manufacturers Machinery & Equipment (MME). MME is a program wherein the state reimburses municipalities for revenue lost due to property tax exemptions. The exemptions are for the purchase of certain new machinery, equipment and commercial trucks.
According to Wren, budgeting for this MME grant is difficult as it fluctuate significantly from year to year. Last year, the town expected to receive an MME grant of $926,000 but only received $646,000 or about two-thirds of the expected funds. For the upcoming fiscal year, the governor’s initial budget numbers did not include any MME funding. As a result, the budget approved by Berlin taxpayers at referendum last week included zero MME funds. Now, however, due to the recent state budget negotiations, Wren expects that at least a portion of the $646,000 MME grant that Berlin received last year will be reinstated again this year. Yet, he proposed taking a cautious approach by adding only two-thirds of the $646,000 or $435,000 back into the budget.
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The finance director also explained that $175,000 in expected revenue from conveyance and sales taxes was recently removed from the town budget. The governor’s initial budget numbers included this source of revenue for the town, and for that reason, revenue of $175,000 was included in the town budget at referendum. However, now it appears the state will be revoking these funds, so the budget had to be adjusted.
“The net impact of these changes will be an additional $260,000 in revenue that will not have to come from the tax levy,” said Wren. These adjustments resulted in the mill rate increase of .85 mills rather than .97 mills.
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[One mill is equal to $1.00 of tax for each $1,000 of assessed property value. So a property with an assessed value of $150,000 would have a property tax bill of $3,675 per year or 150,000*24.5/1000.]
In other business, the council approved a three-year contract with the While Collar Employees Union. The contract calls for wage increases of 2% plus step movement retroactive to July 2010, 0% increase plus step for the year starting July 2011, and 2% increase plus step for the fiscal year beginning in 2012. This represents an average increase over the three years of about 1.3%.
“In doing some research in comparing this to average settlements for municipal bargaining groups over the past eighteen months or so, the average is about 2.3%. So in my opinion, the 1.3% average is actually quite good,” said Wren.
The overall increase amounts to about $34,000. Tighter provisions regarding overtime were also added to the new contract. Health insurance benefits were moved from this contract and put into a separate agreement. The contract was approved by the Town Council by a vote of 5-2 with Councilors David Evans and Karen Drost voting against.
