Groton - Taxpayers would see the tax rate increase 1.6 mills from 20.13 mills to 21.73 mills, partly due to a decline in revenue, under Town Manager Mark Oefinger's proposed 2015-16 budget.

Oefinger has proposed a $128.47 million spending plan, an increase of 4.6 percent or $5.69 million compared to the current budget.

But the impact on taxes will be greater because revenue is also falling. Local officials expected revenue from sources other than local property taxes to rise 2 percent when it planned this year's budget. Now they expect a decline of 1.1 percent.

"This decrease is a dramatic shift" compared to the current year's budget, when revenues were projected to rise, Oefinger wrote in a March 15 budget letter to the Town Council and Representative Town Meeting. At the same time, the 2014 grand list, or amount of taxable property in town, fell by 2.2 percent, largely due to Pfizer, Inc.'s decision to demolish its former research headquarters.

Under the proposed new mill rate, taxpayers would pay $2,173 in local property taxes for every $100,000 of assessed value, or $160 more than the current year.

The town anticipated some losses in revenue and tried to cushion the blow, setting aside $1.8 million for each of the next two years to offset tax losses from Pfizer. But Oefinger said the town would need more to cover proposed spending.

He recommended pulling about $4.95 million from the town's undesignated fund balance to cover spending and tax losses.

This would leave about $9.9 million in the account and maintain the town policy of keeping a fund balance of 7.75 percent of the total budget in reserve.

Aundré Bumgardner and John Scott, Republicans who represent Groton and New London in the General Assembly, said this budget year could prove difficult at the state and local levels.

"Connecticut overall is in dire need of overhauling our very broken property tax system, which hurts our economic development and disproportionately hits our most vulnerable residents," Bumgardner said.

But while some lawmakers support tax reform, "as far as the entire legislature is concerned, I'd expect a more piecemeal solution, as opposed to more comprehensive reform which is really needed," he said.

Scott, a former member of the Representative Town Meeting and the town council, said the town budget is already lean. If residents want tax cuts, they may end up deciding what "they're willing to live without," he said.

Most of the proposed budget increase comes from a 2.7 percent or $2.03 million rise in education spending and a 46.5 percent or $3.23 million increase in capital reserve, which supports future building and maintenance investments.

Other town government spending would increase .7 percent. The Department of Public Works would see the largest dollar hike among the town departments, with a boost of about $347,000, or 5.5 percent, including one additional staff person.

A public hearing on the proposed budget will be held at 7 p.m. on March 30 in the Groton Senior Center.

d.straszheim@theday.com

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