I’ve been seeing some healthy discussion about town taxes on the listserv. So I’m sharing a few thoughts of my own. This is the whole post, without the daily-repeated disclaimers: “I’m a town board member, but cannot (& don’t here) claim to speak for Town Hall.” I very much appreciate hearing your perspectives on it, so feel free to write me.

First, some background. Just prior to the recent meeting where the board approved a tax increase, relevant town staff had gotten together—an annual practice—and come up with how much we would need to increase the tax rate to fund the town budget that was approved by voters this spring. That’s Hartford’s process.

Property taxes apparently needed to go up 7.53% to meet this budget. I joined the board too late to help craft it, but as I understand, services weren’t really expanded; just kind of held where they were. And yet, 7% is a big deal. My rent will likely be going up; a lot of folks have it a lot harder.

Inflation is the outsized culprit. An aside: a peer-reviewed study found that 50% of covid-era inflation was due to corporate price-gouging. Big companies using the fact that folks are discussing inflation as “cover” to pad profits more than their costs are rising. Historically, this study claims, only about 10% of inflation is from obvious price-gouging. So we saw a five-fold increase in big business ripping people off during this vulnerable time. Yet another reason to buy locally-produced goods if possible. But I digress.

I brought up inflation during the board meeting that featured tax rates. I had done some “napkin math”; I’ll share it here too. The treasurer had provided us town tax rates for the last six years. I compared these to inflation in the years that informed them. As you’ll see, inflation—increases in cost of goods/services—and increases in rate of tax match up pretty well until the Covid price-gouging era. Starting at that point, it seems like the town tries to absorb the inflationary blows for its residents by keeping tax increases lower than inflation. So judging by “real dollars” AKA purchasing power, the town *lowered* the rax rate in those years. Check it out:

FY 2020 tax increase: 1.93%, set in June 2019 based on the budget made in fall 2018. Rate of overall U.S. inflation in 2018 was 1.9%.

2019 inflation: 2.3%.  FY 2021 tax increase: 2.25%

2020 inflation: 1.4%.  FY 2022 tax increase: 1.44%

2021 inflation: 7.0%.  FY 2023 tax increase: 1.82%

2022 inflation: 6.5%.  FY 2024 tax increase: 3.35%

2023 inflation: 3.4%.  FY 2025 tax increase: 7.53%

You can form your own conclusions. But it seems to me like the town held off increasing its budget (and thus taxes), even in the face of huge inflation, for as long as it could. The biggest problem with inflation, though, is that it compounds. (You’ve seen the magic of compounding interest with investments; this is its evil twin.) Compound inflation since Covid struck has totaled about 25%. Compound, or cumulative, inflation in the town tax rate has been measurably lower than that. Cumulative inflation is the real hardship, so we should measure it. A comparison:

Cumulative inflation in economy writ large, 2018 to 2023: 24.6%

Cumulative increase in town tax rate, FY 2020 to 2025: 19.6%

In other words, including this year’s increase, the town has *lowered* our tax rates, in real (AKA inflation-adjusted) dollars, over a five year period. Of course, none of us like that an increase we *feel* happened in a year where the state also demanded more for education.

I just keep remembering that town staff, the folks we pay, have also faced 25% inflation. For those who plow our roads and otherwise maintain our collective assets, if they didn’t see their pay increased by 25% over these 5 years, they would effectively be getting pay cuts. If one of them saw exactly 25% more pay in the last five years, they would not have seen a real raise. Not for learning more, nor for contributing more to their department than they did five years earlier.

Given that we’ve bumped taxes by less than what would equal a 0% raise (in real dollars) for our folks, I’d say the town is probably “minding the store” just fine. We can always do better, and we will be. But I don’t see a cause for alarm.

Some final thoughts. I have asked the town manager whether there is a program to help folks stay in their homes if tax increases are clearly forcing them out and their hardships are serious and well-documented. That is, a more standardized program than the Board of Abatement. (Many cities maintain such programs, with clear & transparent requirements, to stave off the effects of gentrification.) If not, I think we should consider creating one. And ensuring a good batch of information on which town expenses see inflation and which don’t, come the budget-crafting time in the fall.