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    Thursday, May 09, 2024

    Will tax shift undergird Nystrom run for Norwich mayor?

    Norwich City Council Alderman Peter Nystrom is already laying out a strategy to recapture the mayoral seat he lost to Deberey Hinchey in the 2013 election. If Hinchey seeks re-election, it sets up a November 2017 rematch.

    Nystrom got back on the council by leading a Republican insurrection last November. He and fellow Republicans focused on high property taxes in the city and a pledge to reduce them. It was a winning approach, with Republicans capturing five of the six council seats up for grabs, giving the GOP a rare majority in a city usually dominated by Democrats.

    As mayor, Hinchey is the council’s seventh voting member, leaving Republicans with a solid 5-2 majority. The Republicans named Nystrom council president.

    Making the tax-trimming task of the new majority more difficult were reductions in state aid and increases in special education and other expenses on the education side of the budget.

    Earlier this month, the council finalized the budget. How successful they were on the tax pledge depended on where you lived. Most city residents only saw their tax rates creep up slightly, from 41.39 mills to 41.69, for the fiscal year that starts July 1, a 0.72 percent increase.

    In the so-called City Consolidated District, however, consisting of the downtown and the densely populated and often low-income surrounding neighborhoods, the tax rate jumped 1 mill, or 2.08 percent, from 48.06 to 49.06.

    The figures include both the general tax rate and the added tax assessment for fire protection.

    Why the extreme difference in tax burdens?

    Property owners in the CCD are served by the city’s only paid fire department. Its always-staffed fire stations protect the older, densely clustered buildings in the district. The CCD’s much higher tax rate includes the 7.84 mills charged to cover the cost of the paid department, a special assessment the council boosted by a whopping 9.5 percent.

    The rest of the town, served by volunteer fire companies, is also charged an added (but much lower) fee for fire service. It was set at 0.47 mills, down more than 4 percent.

    So for much of Norwich, this council did a decent job of controlling taxes. But if you own property in the CCD, you were comparatively clobbered.

    Wherein appears to lie the Nystrom strategy.

    In preparing to again run for mayor, Nystrom calculates that he has to continue focusing on taxes. He sees a path to trimming taxes outside of the CCD, meaning the areas served by the volunteer departments. With a less transient and more owner-occupied population, the districts outside the urban center have better voter turnouts, particularly in local elections.

    In approving the new budget, Nystrom targeted the practice of apportioning to the CCD some of the revenues generated by the municipally owned Norwich Public Utilities. The City Charter requires using 10 percent of the revenues produced by the NPU to offset municipal costs. But nothing, Nystrom notes, states that a portion of that revenue should go to the CCD. He said he has been unable to determine who authorized that policy or when.

    Nystrom persuaded the Republican majority to move $500,000 in NPU revenues from the CCD to the general fund. This loss of revenue is why taxes went up so much in the downtown district and so little in the rest of the town.

    Under the new budget, $6.2 million of those NPU revenues go into the general fund, $2.5 million to the CCD. But Nystrom and the Republicans may not be done, as he questions the appropriateness of any of that NPU money going directly to the CCD.

    Nystrom notes that without that revenue, the actual added tax rate needed to support the paid fire department would be 13 mills for CCD property owners, not the current 7.84. Faced with the real cost of paying for fire service, pressure would grow to trim the Norwich Fire Department budget, said Nystrom, who said it needs to be cut back.

    NFD Fire Chief Kenneth Scandariato disagrees, saying his department is operating at the minimum level necessary to provide adequate fire protection.

    Nystrom said he is OK with proportionally sharing state aid with the CCD, but will continue to challenge use of the NPU revenue.

    Moving more of that NPU revenue — or all of it — to the general fund would have the benefit of holding down and potentially reducing taxes in the rest of the town — where the most votes are — giving Nystrom the tax-cutting platform for his mayoral run. Unfortunately, the high tax in the CCD can only hinder redevelopment efforts there.

    Coincidentally, Nystrom recently sold his home in the high-tax CCD and relocated to a home in the “town,” downsizing as his children leave the nest, he said.

    It appears he had good timing.

    Paul Choiniere is the editorial page editor.

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