BRIDGEPORT — Mayor Joe Ganim’s administration in late December issued a rare prediction to residents, business owners and developers: that come late spring, there would be a significant reduction in the city’s notoriously high tax or mill rate.
The rate, used to calculate tax bills, is currently 53.9 mills, the third highest tax rate in Connecticut after Hartford’s and Waterbury’s.
“One of the obstacles, obviously, in Bridgeport is the taxes,” said Candace Adams, CEO of Berkshire Hathaway Home Services New England Properties, in an interview Thursday.
But in a Dec. 21 letter to the public, Finance Director Kenneth Flatto said that as the result of an overall rise in real estate values in the just-completed citywide property revaluation, City Hall expects to reduce the mill rate “to the mid-40s.”
The mill rate is set once Ganim and the City Council, all Democrats, finalize a new municipal budget in May and determine how much in taxes is needed to pay for it. And rarely in recent history has a mayoral administration suggested a tax rate months before the mayor unveils his budget and the council’s budget committee amends that document.
Councilman Scott Burns, a budget committee co-chairman, this week called Flatto’s claim “pretty bold” but added, “They have the numbers. And if that’s what they think and feel, that’s good. … If we can get the mill rate below 50, that’s great and in the right direction.”
Neither the mayor’s office nor Flatto agreed to share any additional details of the revaluation with The Post. Flatto in an email said he will brief the budget committee at its January meeting and further comment was “premature.”
Home values in Bridgeport have been on the rise, in part because the ongoing coronavirus pandemic resulted in low interest rates and in part because residents from denser areas like New York City are moving to Fairfield County. And that sales activity was captured in the 2020 revaluation, which by state law must be conducted every five years.
“The average sale price is up about 10 percent,” Adams said. “We see more sales happening — a higher percentage of sales happening over $250,000 — than we have in the past in Bridgeport. That’s good news. Certainly there’s value there. Properties are appreciating. It’s a destination. I think the pending sales are up almost 30 percent.”
Bridgeport’s 2020 revaluation results should have a positive impact on the grand list — the total value of all taxable property, including motor vehicles and personal business property — which will be finalized around February and used by the Ganim administration to craft its new budget. When municipal grand lists increase, elected officials have the flexibility to decrease their mill or tax rates while still funding government services.
In contrast, in 2015, when the prior revaluation saw a big decline in Bridgeport’s real estate values, the grand list issued in early 2016 took a $1 billion hit from $7 billion to $6 billion. As a result, Ganim, despite running for office in 2015 promising to “stop raising taxes,” and the then-council approved a 2016 budget that spiked the mill rate from 42.1 to 54.37 mills.
The grand list has slowly been inching back up over the past few years and is now $6.353 billion, data show. With Ganim’s major downtown redevelopment efforts either delayed or in limbo, in part because of the pandemic, that increase has been mainly credited to the completion of a new gas-fired power plant in the South End in 2019.
Meanwhile Ganim and the council kept the 2016 mill rate steady, then reduced it slightly last spring to the current 53.9 mills.
State Rep. Steve Stafstrom, a former Bridgeport Council member, represents one of the most expensive neighborhoodsin the city — the waterfront Black Rock district — where homeowners pay some of the highest tax bills and were outraged by the 2016 increase.
“I think what happened is last time we did revaluation, it was post-2008 recession numbers, so property values around the city — with the exception of a couple specific neighborhoods — were artificially low,” Stafstrom said this week. “Assume the property values in those neighborhoods have rebounded.”
Stafstrom said from what he knows of the 2020 results, “The real estate growth itself is significant enough that if the city budget stays roughly the same — say within $5 million, $10 million dollars of where it was — then you’re going to be able to knock the mill rate down into the mid-40s.”
“Whether the mill rate ends up being closer to 42 or more like 47 in large measure depends on the finalized grand list, the level of state aid (Bridgeport regularly receives to fund services) and also what budgetary decisions the council makes,” Stafstrom said.
A tax rate of 40-something mills would still be high compared with many other Connecticut cities and towns based on information available from the state’s budget office. But Adams said such a reduction “would be really significant” for Bridgeport overall.
“That could really stimulate the market,” she said. “It’s an opportunity, there’s no doubt about it.”
A dropping mill rate would not necessarily translate into reductions in individual tax bills, however. Flatto in his Dec. 21 letter warned that “many” property owners’ costs will remain “flat and stable” while other unspecified areas of the city could see “some percentage of increase” or “some tax decrease.”
“It really is the old story that it depends on who you are, where you are, what your property is,” said Burns, who represents Black Rock. “There’s all these variables. To me, it’s not responsible to say everybody’s taxes are coming down, because they’re not. Some people are going to do well, some are not. That’s how it was five years ago.”
Councilman Ernie Newton of the East End is also a budget committee chair. Newton said the council’s struggles in recent years to just hold the tax rate steady or trim it were like “kicking wind” and was optimistic the mayor and legislative body can now do better.
He noted that even if some individuals wind up with a tax increase next year despite grand list growth, it will still be less if based on Flatto’s predicted 40-something mills rather than 53.9 mills.
“I’m hoping we’re able to lower our mill rate for the upcoming fiscal year, and not by a minimum,” Newton said. “God knows people in Bridgeport could use a break.”