Stamford to raise taxes 1 percent for school building reserve fund

STAMFORD — Property taxes will increase about 1 percent on average, and $20 million raised through those taxes will go into a fund for school construction projects now that the Board of Representatives has agreed to a plan by the Board of Finance.

For a house assessed at $300,000, that’s about an extra $80 a year.

Monday night, the Board of Representatives voted 38-1 with one abstention to approve adding slightly less than 1 extra mill to each of Stamford’s taxing districts to fund the capital reserve for schools, as had been recommended by the Board of Finance.

“We’re going to essentially tax people a little bit more so that we can create a nest egg of $20 million that we don’t have to bond,” said Board of Finance Vice Chair Mary Lou Rinaldi, a Democrat.

Before the vote, Board of Finance Chair Richard Freedman told city representatives that even with a recent change to Stamford’s state reimbursement rate, a school facilities master plan will cost the city an estimated $321 million over a decade.

Stamford already has about $400 million in outstanding debt, Freedman said. Every year, he said the Board of Finance sets what is known as the safe debt limit, which Stamford’s charter describes as the amount “the city may incur safely for capital projects in the next fiscal year.” The board set the limit at $40 million for fiscal year 202223.

If the city were to bond $70 million per year, with $30 million set aside for schools each year, it would “crowd out” other capital projects, Freedman said.

“We can bond it, but it’s going to be a really heavy lift,” he said. “To the extent that we can bond less, which means pay for more of it in cash, that’s really, really helpful.”

In addition, Freedman said, if the city bonded the $20 million amount proposed by the Board of Finance instead of raising cash through taxes, it would have to pay about $8 million in interest on the bond issue.

Without the $20 million reserve, property taxes would have decreased about 2.4 percent on average, according to the city’s Office of Policy and Management. With the reserve, taxes will rise about 1 percent on average — which was Mayor Caroline Simmons’ goal for the coming fiscal year.

Taxing District A’s mill rate will be 27.17. District B’s will be 26.68. District C’s will be 26.33. District CS’s will be 26.74.

The rate for personal property across the city will be 27.17.

The Board of Finance didn’t increase the citywide mill rate for motor vehicles. It will remain at 27.25.

The average mill rate will be 26.96, up from the average fiscal 2021-22 rate of 26.7. That will add about $78 to the average tax bill for a home assessed at $300,000.

Freedman noted that Stamford’s annual tax increases have ranged from about 2 percent to more than 3 percent over the past decade, with the exception of the year taxes stayed flat because of the COVID-19 pandemic.

Rinaldi added that the additional tax only applies to fiscal year 2022-23.

“Every year, it might be a little bit different,” Rinaldi said. “The tax increase might be different, and there may be years when we can do more. There may be years when we can’t do anything at all.”

The only member of the Board of Representatives who voted “no” Monday was Rep. Lindsey Miller,

D-7, a co-chair of the board’s Fiscal Committee.

Simmons and the Board of Education proposed a joint city and school operating budget of about $638 million for fiscal 2022-23. The boards of Finance and Representatives then made a total of about $8.5 million in cuts.

Freedman said the proposed budget “came in quite low in large part because of really an unprecedented drop” in pension and other post-employment benefits costs. He attributed the decrease to the city moving employees to a state health insurance plan.

“We knew really from the beginning that there was, I would say, a unique opportunity to consider this kind of financing,” Freedman said, referring to the creation of the capital reserve, which is allowed under state law.