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State revenue boost to bring tax relief to Norwich property owners

Norwich — The city budget has received a $1.4 million revenue boost from the state, courtesy of a new formula to award distressed municipalities a greater reimbursement for untaxed state and nonprofit properties.

The City Council Monday incorporated the additional revenue into its proposed 2021-22 combined city and school budget of $138.2 million. Several other smaller revenue adjustments brought an increase of $1.496 million in anticipated revenue next fiscal year. The changes translate to a tax rate reduction of 0.75 mill.

State Sen. Cathy Osten, D-Sprague, whose district includes Norwich, said the additional revenue in state payments in lieu of taxes, or PILOT, is the result of a bill approved by the General Assembly in March that is being incorporated into the proposed state budget. The bill created a tiered system PILOT system that increases the PILOT to cities and towns in need.

The top tier includes state designated distressed municipalities, municipalities with Alliance School Districts and that have high unemployment and poverty rates. Norwich is a distressed municipality and an Alliance District city. Osten said Norwich will receive 100% of the formula for PILOT, which includes state property, hospitals and nonprofits, but not the full value of taxes for the properties.

City Manager John Salomone welcomed the additional revenue, but added a caveat that if the funding doesn’t come through in the final state budget, the city will have to adjust the budget again.

“I wanted to show it to see what the impact would be on the budget,” Salomone said. “I knew it would be important to show it.”

The City Council must set its final budget by June 14.

The council also Monday added one new staff position to the budget, an assistant blight control/zoning enforcement officer with a total salary and benefits cost of $65,047, adding 0.03 mills to the proposed tax rate. Two weeks ago, the council added an assistant clerk position for the city clerk’s office to address the heavy work load in the office.

The council also accepted a city manager recommendation to cut $370,000 in various expense cuts to the budget, for a 0.18-mill projected property tax reduction.

Separate from the budget, aldermen voted unanimously to approve an ordinance to bond $600,000 to replace the boiler at the John B. Stanton School. Stanton is targeted for a total renovation under a proposal district-wide consolidation/restructuring plan, but that project is years away.

During a public hearing on the ordinance prior to the vote, former Alderwoman Joanne Philbrick opposed the project, questioning the cost, the future renovation project and why the city is bonding for the project rather than seeking to use part of the city’s $21 million in funding through the American Rescue Plan.

Alderman Mark Bettencourt, who chairs the School Building Committee, said the Stanton School boiler is in critical condition and must be replaced this summer. Bettencourt said city officials are pursuing using the federal grant money for the project, which would negate the need to bond for the project.

Previous estimates put the replacement cost at $1.3 million, which “was choking us,” Alderman William Nash said, causing delays in going ahead with the project. The current plan is a compromise, fitting multiple smaller boilers together to serve as the school’s heating system.

c.bessette@theday.com

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