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    Sunday, May 12, 2024

    Norwich's damaging tax

    It is hard to see how boosting the special tax burden in the City Consolidated District of Norwich, consisting of the downtown and surrounding urban neighborhoods, can do anything to bolster the part of the city in the greatest need for economic growth. Yet that is exactly what the new Republican majority on the Norwich City Council decided to do.

    Property owners in the CCD are assessed a substantial fire tax to support the city’s only paid fire department. That paid department exists to protect the densely developed district of older homes and buildings, as well as the public buildings located there, including City Hall.

    Faced with cuts in promised state aid that made it more difficult to sustain their campaign promise to control taxes, Republican councilors voted to redirect revenues from the CCD, raising the tax there while helping hold down the general tax rate.

    The revenues in question come from the municipally owned Norwich Public Utilities. By charter, 10 percent of gross revenues produced by NPU go to the city, currently $8.67 million. City Manager John Salomone, using budget policies he inherited when hired back in January, had proposed directing $5.7 million of that NPU revenue to the general fund, nearly $3 million to the CCD.

    Led by council President Peter Nystrom, a majority of Republican council members had a different plan, moving $500,000 of the revenue from the CCD to the general fund. In the process, the council held the citywide tax increase to 0.32 mills in approving $123 million in combined municipal and school spending.

    However, where the city manager had proposed a small decrease in the CCD tax rate, the Nystrom led budget will boost it by 0.68 mills due to the $500,000 revenue loss. That means property owners in the paid fire district will be paying an additional CCD tax of 7.84 mills. When added to city’s general taxation, it means a whopping tax rate of 49.06 mills for downtown properties.

    In our opinion, Norwich should move in the opposite direction, having one tax rate for all property owners, equally distributing the burden of paying for the one paid and five volunteer departments. The ever-higher CCD tax will add to the difficulty of driving economic growth and revitalization in the downtown and the surrounding neighborhoods.

    Nystrom, a former mayor who is interested in running again in 2017, challenges the logic behind directing NPU money to the CCD. But if he is going to continue stripping that revenue resource away, he had better have another plan to ease the huge tax burden that is choking the downtown district.

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