In the last few weeks Woodbridge taxpayers received a letter from the Town Assessor with a revaluation of our properties. Changes in valuation are a double-edged sword. Increases in value indicate increase equity but change the math for your tax burden – you’ll be paying more if the mill rate stays constant. Decreased value may indicate a tax reduction, also assuming the mill rate stays constant, but equity takes it on the chin. So how did all the revaluations shake out?
According to publicly available data, Woodbridge’s Grand List has taken a $48M hit over the past five years, which represents a little over a 4% reduction in the total value of all our properties. Digging into the numbers more deeply, 73.31% of residential homes suffered an average 6.66% decline in value between 2014 and 2019. So, while the nation continues to recover from the depth of the 2008 recession that hit home values hard, 7 in 10 of us in Woodbridge still have not. Consider the impact this fact has on your personal finances. Traditionally, the purchase of a home contributes to the growth of personal wealth through the appreciation of the property. Rent is viewed as “a bad investment” because rent payments build no equity. If your mortgage payment isn’t building equity, in some ways it’s the equivalent of paying rent (tax benefits related to interest payments not withstanding). We are not in the habit of making poor investments, but we have one now.
Why has this economic blow hit us? Taxes. Woodbridge property taxes, driven by a high mill rate. The tax burden on property owners has forced home values down. The typical home buyer looks at the main expenses of the deal – mortgage payment + insurance + taxes. If the tax portion of that formula is high, the only offset is lowering the purchase price of the home, bringing down the size of the mortgage payment. This is precisely what is happening in Woodbridge.
For years, taxes were a non-issue here. Woodbridge is a wonderful town and the residents were accepting of regular mill rate increases. The perceived wealth of the residence, able to afford these increases, mitigated any pressure town leaders might have felt to keep taxes in check. But just because we could bear these increases doesn’t mean we should. And now that these taxes are impacting property values, sale prices are dealing serious blows to nest egg calculation, it’s time to get serious about the issue. Many long-time residents feel “stuck” here and that’s just not right.
Much of our tax burden is driven by the cost of education, the crown jewel of our town. As was recognized recently by the Board of Finance, our portion of the Amity budget is going up due to rising student population here and shrinking student populations in Orange and Bethany. That’s an issue that will need to be addressed by the regional school board. This leaves taking a much harder look at our Town expenses. Looking for more revenue through pie-in-the sky financial expectations of the pending golf course deal is not the answer.
What should concern every Woodbridge taxpayer is the net reduction of the Grand List. If the spending appetite of our local government is not trimmed proportionally, the obvious path is to increase our mill rate, and thus our taxes, to make up the difference. Now is the time for Town Hall to do the math and figure out how to absorb this reduction in Grand List value without passing it back to already over-burdened taxpayers. Leadership includes managing limited resources, prioritizing and saying no when no is the right answer. That approach would certainly be welcomed by the 73.31% of us feeling the property value pinch today. And it would probably be appreciated by all Woodbridge taxpayers.
By Chuck Pyne