Berlin businesses and residents need pay attention to the current budget process. Through tax and fee increases, it’s clear the cost to live and do business in town is about to jump significantly. How much appears to be the only question at this point.
This has been a talking point for the last six months, but shockwaves rippled through the Town of Berlin this week after we reported online first about the potential for a 34-percent property tax rate increase as well as significant hikes to existing sewer and stormwater fees.
This is a key time in Berlin. It’s not a matter of if taxes and fees will go up in the next budget in Berlin, but it’s by how much and who will be impacted the most – commercial or residential property owners. Those who own both will face steep expenditure increases.
After reviewing some grim financials, including the fact the town will be facing a $1.8 million budget shortfall without a fee or tax increase and significant cuts through its departments, Berlin’s elected officials asked staff to return with a report on the impact of raising the town’s property tax rate from .68 to .91 cents per $100 of assessed valuation as compared to a breakdown of increasing the residential property tax rate to .88 cents and boosting the commercial property tax rate to .98 cents.
Berlin is not going to approve a 34-percent property tax increase as was discussed this week. A decision like that would doom the elected officials’ futures (even without an election near) and hurt the town’s trendy momentum. It’s an extreme increase, one that will cause major harm.
Nonetheless, the town’s struggles are real. It has a woefully inadequate reserve fund, which currently stands at $3.7 million, or enough money to last the town about five months in the case of a major emergency. That reserve fund needs to be healthier. Additionally, the town’s sewer and stormwater funds are not self-sustaining and rob the general fund of dollars to continue operating. These are bad business practices and need to change. These funds need to be independently operated as is the case in most municipalities.
It’s clear raising taxes on commercial properties at a higher clip than residential property owners is an easier pill for town decision makers. However, we caution that direction as problematic, especially when coupled with planned sewer and stormwater increases. Increasing the expenses for commercial property owners will only result in increased rents for businesses and higher retail prices for consumers. It’s a trickle down.
A modest tax increase can be accepted in Berlin, as it has been more than 12 years since taxes were increased. We would support a phase-in plan where fees and taxes are increased over time, while examining every expense to ensure responsible principles are in place.