The Windham Town Council split in a decision to lower the tax rate once again from $11.40 to $11.30 per thousand of property value.
The council was informed, after setting the tax rate at $11.40 in July, that a recent change in the way the state views “captured value” in TIF districts was not factored into the property tax equation.
Therefore, a tax rate of $11.40 would have resulted in an unusually large surplus estimated at $246,000.
Towns always overtax property owners by a slim margin to create money for “overlay.” This overlay, essentially surplus money from property taxes, can only be used for tax abatements during the fiscal year.
After that fiscal year however, the remaining money, minus the tax abatements, goes directly into town savings.
Councilor Robert Muir brought forth a motion to reconsider the tax rate because many Windham residents will be seeing a tax increase due to the recent property revaluation.
“I’d rather pass the tax savings on to the people now,” Muir said.
All councilors agreed the tax rate should be lower, but debated whether dropping the tax rate to $11.30 would leave enough overlay, estimated at $64,000.
Windham typically keeps $50,000 to $100,000 as overlay and, in recent years, the tax abatements have remained around $30,000 or less. However, during the last property revaluation in 1998, the town authorized $125,000 in tax abatements. In 2005, only $25,600 of a $102,000 overlay was used for tax abatements. The rest went into the town savings this fiscal year.
When asked his opinion on the matter, Tax Assessor David Sawyer said he would be comfortable with an overlay around $100,000 to make sure the abatements from the revaluation are covered.
“The amount of abatements bounces around from year to year,” Tax Assessor David Sawyer told the council. “The stakes are a lot higher this year and that’s why I like to be on the safe side.”
After a failed motion to set the tax rate at $11.32 by Councilor Michael Shaughnessy to bring the overlay to $100,000, the council lowered the tax rate to $11.30 by a 5-2 vote with councilors Shaughnessy and Carol Waig opposed.
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