The City of Groton, distinct from the Town of Groton (I decline to address the absurdity of the existence of both of these entities) has announced a tax decrease:
The Groton City Council is considering a budget for the coming fiscal year that would lower the city’s tax rate by 0.72 mill, or $72 for every $100,000 of assessed value.
Mayor Keith Hedrick’s proposed $16 million budget would remove the Water Pollution Control Authority from the general fund, covering those costs with user fees rather than taxes.
“We’re steadily working on trying to reduce taxes. We’re maintaining services and we’re reducing taxes at the same time,” Hedrick said.
To borrow and adapt a phrase from Dean Baker, fans of logic might beg to differ with the mayor (who is, I should add, a good guy). The City is not reducing taxes, it is simply redistributing the tax burden. When people pay for municipal services, no matter the way in which the payment for those services are assessed, they are paying a tax. To borrow from Shakespeare, a tax by any other name still would smell as rancid. In the case of the City, there is no indication that the total amount it will be recovering from its citizenry will be going down. The only question is: who will be the losers and who the winners when this redistribution takes place? The Day goes on to report:
Based on data collected so far, more than three-quarters of city residents would benefit from shifting WPCA costs from taxes to a user fee system.
“Now you will be paying sewer charges not based on the value of your home but based on the amount of water that you use. We think that’s more equitable,” Hedrick said.
So, let’s think about this. Unlike much other consumption, water consumption is fairly uniform across income groups, as it’s usually a function of the number of people in a dwelling unit. Moreover, it’s difficult, if not impossible, to limit water usage below a certain point, so trying to reduce one’s user fee in this area is even harder than keeping the heating bill down. There’s obviously exceptions, but that’s the general rule. That would appear to mean that people whose homes are worth the most will be gaining the most from this change, while those least well off may be seeing an increase in their taxes. That implies, roughly, a redistribution of the tax burden from the better off to the less better off. This may be offset, in whole or in part, by increased income from commercial entities, like Electric Boat.
In any event, it is inaccurate to call this a tax decrease. If the same amount of money goes into the city’s coffers, than it has not decreased taxes, it has simply redistributed the tax burden.
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