Groton could use $900,000 from reserve to lower tax rate
Groton - The tax rate in Groton would fall from 20.72 mills to 20.13 mills if a decision made Tuesday night is approved next week.
The Town Council's Committee of the Whole voted Tuesday to use $900,000 of reserve - originally planned to cushion losses from the demolition of Pfizer's former research headquarters on Eastern Point Road - to instead lower the tax rate in the coming fiscal year. The council must formally adopt the change at its next regular meeting.
The $900,000, combined with earlier plans to use more than $2.3 million in reserve to offset taxes in the coming year, would result in a tax rate of about 20.13 mills based on preliminary figures, Finance Director Sal Pandolfo said.
The tax rate would equate to about $2,013 in local property taxes for every $100,000 of assessed value, or 2.8 percent less than current property taxes.
The Representative Town Meeting earlier this month approved a budget of $122.78 million for the coming fiscal year, $2.8 million more than current spending.
Groton was able to cover that increase and still reduce the tax rate slightly because it received more revenue and spent less than expected in the current fiscal year.
Councilor Bruce Flax said the council should not increase spending, then cover it with reserve money.
"In my perception, it's smoke and mirrors," he said.
The decision to shift the $900,000, proposed by Flax, was approved 6-3. Councilors Harry Watson, Bob Frink and Joe de la Cruz voted no, saying the town should prepare for future Pfizer losses, estimated at $1.8 million each in the 2015-16 fiscal year and in the 2016-17 fiscal year.
"It's very unlikely we're going to recover that anytime soon," said Frink. "So I think it's going to be a good idea to keep that money in the bank."
But other councilors said taxpayers should get back what they paid in and the council should cut instead.
"It goes to the heart of things," Councilor Richard Moravsik said. "It's the taxpayers' money, and I think we should give a little bit back. And the town has to pull a little bit back, maybe in their staffing."
The change would still set aside $1.8 million for the 2015-16 fiscal year to offset Pfizer losses. But under the new plan, the council would instead set aside $900,000 for Pfizer in the 2016-17 fiscal year and spend the other $900,000 in the coming year for tax relief.
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