Coventry, CT Smidge Tax FAQ
What is the "Smidge Tax" and why is it a concern?
The "Smidge Tax" refers to a discrepancy in property tax assessments in the Town of Coventry, Connecticut, where properties are assessed at slightly over the 70% of appraised value limit mandated by Connecticut state statute (Section 12-62a). Although the individual tax increase per property might be small (e.g., 95 cents or a few dollars), the concern arises from the widespread nature of this error. It means the effective mill rate paid by affected property owners is higher than the rate set by the Town Council.
How does the Town of Coventry's assessment practice violate Connecticut state statute?
Connecticut General Statutes, specifically Section 12-62a, requires municipalities to assess all property for local property tax purposes at a uniform rate of 70% of its present true and actual value. While rounding of assessed values is permitted, the Connecticut Office of Policy and Management confirmed that such rounding cannot result in a value exceeding 70%. In Coventry, properties are being assessed at 71.43% due to rounding up, which violates this statute.
What is the actual impact of the "Smidge Tax" on property owners?
For individual property owners, the direct financial impact might seem minimal, with additional taxes sometimes being just pennies or a few dollars. However, this over-assessment means that the effective or "actual" mill rate paid on these properties is higher than the rate officially set by the Town Council. For example, if the set mill rate is 23.76, the actual rate paid on an over-assessed property could be 24.14.
How widespread is this assessment error in Coventry?
The review of grand list data prior to reevaluation showed that only 6% of the 6,116 property records had calculated assessed values at precisely 70%. A significant 61% had appraised values above 70%, and another 33% were less than 70%. This suggests that more than 60% of properties in the Town have been assessed above 70% since the last reevaluation. A recent Freedom of Information Act request confirmed that the problem persists in the most recent re-evaluation data.
Has the Town of Coventry been made aware of this issue?
Yes, the findings regarding the "Smidge Tax" were shared with the Town and the Town Manager as early as January, with the hope that the issue would be addressed before tax bills were sent out.
Why is this issue, despite the small monetary amounts, considered significant?
While the monetary error per property is small, the significance lies in several factors:
Violation of State Statute: The practice directly contravenes Connecticut state law.
Lack of Transparency: The Town has an obligation to be transparent about such errors and to find timely solutions.
Widespread Nature: The error affects a large percentage of properties, indicating a systemic problem.
Town's Responsibility: The Town is ultimately responsible for correcting the error, even if caused by a contracted vendor, and should not use system limitations as an excuse.
Erosion of Trust: Paying a higher effective tax rate than officially set, even by a small amount, can erode public trust in government processes.
What is the town's responsibility in resolving this issue?
The Town of Coventry is ultimately responsible for this error and for correcting it. This responsibility holds true even if the error was caused by a contracted vendor. The expectation is for the Town to be transparent about these errors and to actively work towards a solution to fix the over-assessments sooner rather than later, ensuring that all assessed values adhere to state statute. The Town Manager James Drumm has indicated in writing that this error exists and blames it on a Town vendor.
What analogy is used to explain the gravity of the "Smidge Tax"?
The analogy used is paying an 8% sales tax at a convenience store when the legal rate is 6.35%. Just as one would not accept this overcharge, especially if the store owner claimed they couldn't fix it due to their software system, property owners should not accept being over-assessed, even by a "smidge," and the Town should not use software as an excuse for non-compliance.