News

Gray changes tax formulas
Town and SAD15 budget comparisons with last year become clouded
By Janet Neal

Gray Town Manager Mitchell A. Berkowitz has made revisions in how the town calculates property taxes. The formula changes will not affect the total tax people pay, but will affect how those taxes are allocated among school, municipal, county, and overlay as they appear on the property tax bills. Berkowitz made the formula change after discovering that TIF costs were not being properly allocated under the previous method.

After questions were raised regarding the old calculation method, Berkowitz researched the issue and decided to revise the formulas. The extra taxes the townspeople must pay because of the TIF should fall completely within the municipal line, the Manager reported. Previously, they had been apportioned among the four categories school/municipal/county/overlay in proportion to the size of each one's own budget. This resulted in distorted milrates. The total tax was correct, but more of the cost belonged in municipal, and less belonged in the school and county and overlay.

This formula change will affect how citizens view the various budgets being proposed for next year. It clouds the "apples-to-apples" comparisons that people like to see. The change being implemented by the Town Manager will not affect the total taxes people pay, but it will produce a one-time distortion in the school portion versus the town portion.

The distortion can be seen by comparing the two tables shown. In table 1, the proposed mill rates for next year are compared with the actual billed rates sent to taxpayers last September. Table 2 shows the proposed mill rates for next year as compared with what last year's rates would have looked like if they had been correct. The total tax stays the same. However, the school, town, and county comparisons do change dramatically. It will be a complicating factor in explanations to the public regarding the town and school budget proposals.