New Canaan's tax collection rate the county's highest
Published 3:18 pm, Friday, April 25, 2014
After the latest audit report revealed New Canaan has the highest rate of tax collection in Fairfield County, town officials considered whether a budgeted 98 percent collection rate was too conservative.
At a March 27 Town Council meeting, Marcia Marien, an accountant with the consulting firm O'Connor Davies, suggested the town increase its budgeted collection rate to 98.5 percent, especially because the actual collection rate has been between 99.3 and 99.8 percent over the past several years.
However, the Board of Finance agreed to keep the rate at 98 percent so that the town has an approximate $1.9 million cushion in the upcoming fiscal year.
More InformationActual tax collection rates in fiscal year 2013:
New Canaan 99.44%
New Fairfield 98.52%
Source: O'Connor Davies, LLP
The difference between the budgeted and the actual collection rates typically results in about $2 million with which the town uses to offset the tax increase for the upcoming fiscal year, either by making a contribution back into the general fund or making special appropriations. At an April 8 Board of Finance meeting, Budget Director Jennifer Charneski said the town uses the difference as "a mechanism for ensuring that we have sufficient funds to cover the budget" in case there's an emergency.
"Essentially, what that (budgeted) collection rate does is build us a cushion in the budget," Charneski said. "It's additional revenue that we're going to receive above and beyond what was budgeted."
One of the programs funded with the higher-than-expected tax revenue is the Tax Relief for the Elderly or Disabled program.
With a 98.5 percent rate, the town would have about $1.2 million to $1.3 million of cushion, according to Charneski.
Marien noted that New Canaan would be in a good place even with a 98.5 percent rate. In fiscal year 2013, the town's actual tax collection was 99.4 percent, the highest rate in the county. Darien and Greenwich each collected 99.3 percent, Wilton collected 99.2 percent and Westport collected 98.2 percent.
Budgeted tax collection rates also vary from town to town. Wilton's and Greenwich's are 99.3 percent, Darien's is 98.9 percent and Weston is 99.7 percent.
Though the town rejected such change, New Canaan's budget for 2014-15 still looks very different than previous years. During the latest budget season, the town's Finance Department changed the way the budget is broken down.
Some of those changes include moving fringe benefits, such as 401A employer contributions and longevity payments, to operating departments; centralizing building cleaning and repairs in the Town Buildings Department; and the creation of a land use department. Another major change was the elimination of the central services department. Up to the current fiscal year, copier leases, technology and software support contracts and certain office and building supplies were centrally budgeted. Those items have been moved to their appropriate department budgets.
The Finance Department also found other sources of funding for capital projects for the town and the schools. About $4.2 million will come from the town's capital improvement program dollars and reimbursement received from the capital non-recurring fund.
The recently adopted 2014-15 budget is $138.3 million, a 4.7 percent increase of the current fiscal year.
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