The Town of Berlin must do better than imposing an unprecedented 29% tax increase on property owners in a single year.
The problems leading to the consideration of this huge hike did not arise overnight. Years of mismanagement and poor decisions caused the town’s present financial quagmire. The citizens should not have to fund the consequences of these mistakes in one year. Instead, the town should focus on crafting a three-, four- or five-year plan to fairly phase these increases to ease the burden on town property owners.
Under an incremental increase plan, senior citizens and others living on fixed incomes can have time to decide their futures. They can then evaluate a way to deal with the looming increased tax burdens or potentially sell their homes and relocate to less expensive locales. Those same decisions will surely be faced by many families.
There are two major issues facing Berlin’s finances — the town’s reserve fund is not healthy enough in the event of a disaster and three of the four town enterprise funds are not self-sustainable and have consequently been drafting funds from the operating budget. This poor practice has resulted in a major strain on the government’s budget.
There is no quick fix to the reserve fund problem. Mayor Gee Williams said this week the current reserve fund is at $2 million and his goal is to see it elevated to $4 million next year. We agree that’s an appropriate level for a town like Berlin, but that should be part of this phased-in plan. It’s not practical to double the reserves in one year or even two years.
While we advocate for smaller tax increases over several years, the only way to make that feasible is to increase the fees residents and businesses pay for water, stormwater and sewer services. The revenue from these services is not meeting the costs required to provide them. That must change and will be critical to the town’s financial stability moving forward. Williams had previously suggested significant increases on those user fees and more details will be coming on those funds this month.
The good news for the town is property values are on the rise in the town. The latest reassessment indicated town property values on average increased by 7%, which will increase the town’s property tax revenue line item. For those residents who are content in their homes, even if the tax rate were to stay the same in Berlin, it’s important to note they will be paying more in taxes to their town even if the rate remains stagnant.
Hammering property owners with a massive tax increase in a single year is simply unfair. The town needs to stabilize its utility funds through higher, manageable fees while spreading a justified tax increase over at least three years.