The Board of Finance set the mill rate at a special meeting Wednesday night.
The large jump is due mostly to the fact the town’s grand list decreased by approximately $68.9 million, or 12.75 percent. The drop in the grand list stemmed from a nearly $70 million net decrease or 14.4 percent, in real estate values in town.
The mill rate increase makes up for the drop in the grand list. After the grand list decrease is factored in, residents will see their taxes rise by 3.1 percent, according to officials.
The mill rate means that a person whose house is worth $200,000 after the revaluation will pay $6,220 in taxes.
A couple factors kept the mill rate increase from being higher.
The state increased the town’s Education Cost Sharing grant by $64,000, which was not factored into Beacon Fall’s education expenses prior to adoption of the Region 16 budget. The extra money counts towards the town’s revenues.
The other way the town was able to stop the mill rate from going up more was budgeting an increase in the amount of taxes it expects to collect as revenue next fiscal year to 98 percent.
Currently the town’s average tax collection rate for the past three years is 97.3 percent. Board of Finance Chair Marc Bronn and Financial Director Manny Gomes both felt it is reasonable for the town to expect to collect 98 percent of taxes in the 2012-13 fiscal year.
Gomes added the town budgeted $250,000 in collection of back taxes as well, which he felt could allow the town to aim for a 98 percent collection and not affect the mill rate.
“The tax collection rate is low, so that means the next year, the prior year’s collections will go up for the simple reason that the poor guy out there that didn’t pay his taxes, if he wants to register his car he’s got to pay those taxes or he can’t register his car. That’s the harsh reality of it,” Gomes said.
According to Bronn, if the board aimed its tax collection expectations any lower, the mill rate would start suffering. Setting the expected tax collection rate at 97 percent makes the mill rate jump to 31.50, while 96 percent makes the mill rate 31.80, he said.
Gomes told the board that 98 percent is a reasonable goal and if the town is able to collect more than that, it goes to the town’s general fund.
“Next year, if we’re sitting in here and we collected 100 percent of what we budgeted, that means we collected 98 percent. Anything above that, that’s good news,” Gomes said.
If they find that the town is unable to collect 98 percent of the taxes, Gomes explained next year the expectation can be set as low as 97 percent without a huge impact to the mill rate.