[longislander]

TO: TA, Select Board, two other participants of 2-23-23 work session

2-26-23
Hi Charlie,

By the time you read this you'll have returned from vacation. Hope you had a great vacation.
This note regards the BoS work session of 2-23-23 and possible/probable confusion by town folks regarding the discussion regarding “valuation” and “tax impacts”.

Use of the final column numbers in the 20 year bond, “FY-Est Tax Rate Inc.”are referenced and folks may think that is how they are taxed. I believe FY-Est Tax Rate Inc stands for: Fiscal Year Estimated Tax Rate Increase. Folks might try using, for example, .08 or .33 and use these numbers to figure the tax on their property … which would be a mistake.

Let me know if my calculations or premise is faulty.

That last column of numbers on the bond refer to the municipal tax rate. The municipal tax rate is only one of four rates that determine the total tax rate; namely, the sum of Municipal,County, Local Education, State Education formulate the total town tax rate. Additionally the town “Assessed Valuation” stays the same for the life of the bond, but will change with changes in yearly assessments.
The 2021 valuation was $3,943,560,976 with a total tax rate of 6.98. The 2022 valuation was $4,892,023,118 with a total tax rate of 4.78, which is the valuation on the bond. What will the town 2023 valuation be … or what will it be when/if a bond is approved … who knows. Assessments should definitely go down, but …. (one t).

Moultonborough Tax Rate Breakdown for 2022:

Jurisdiction Tax effort Valuation Tax rate (per 1,000)
Municipal $6,144,066 divided by $4,892,023,118 = 1.25
County $3,923,698 divided by $4,892,023,118 = .80
Local Education $8,588,853 divided by $4,892,023,118 1.76
State Education $4,698,493 $4,892,023,118 = .97

Total present tax rate $23,355,110 divided by $4,892,023,118 = 4.78

The bond affects the Municipal rate, not the other rates, other than total rate. Using some examples from the 20 year bond discussed at the work session:

First 5 years of the bond:
Year 1 Year 2 Year 3 Year 4 Year5
FY-Est etc. .08 .33 .32 .31 .30
Year Pmt. $387,500 $1,606,188 $1,563,563 $1,520,938 $1,478,313
e.g.: $387500/$4892118 = .000079/1000 or .08 another:1,606,188/4892023118 = .000328/1000 or .33
and so on.

Not that meaningful if trying to figure out how much your tax bill will increase.






To look at what the bond would have added to the 2022 tax rate, add the 2022 tax effort, $6,144,066 with each years payment listed on the bond (see above) .
Sample
$6,144,066 + $387,500 = $6,531,566 = New Municipal Effort and so on, for each year

Bond Year 1 Year 2 Year 3 Year 4 Year5
New Muni. Effort $6,531,566 $7,750,254 $7,707,629 $7,665,004 $7,622,379

Then,
New Municipal tax rate = Municipal tax effort divided by Valuation
sample: year 1: 6,531,566 divided by 4,892023,118 = 1.3 and so on for the other years
New Muni tax rate 1.3 1.6 1.6 1.7 1.6
New total tax rate 4.84 5.13 5.13 5.23 5.13

Bond years 1 2 3 4 5 … and on 20 yr.
Tax rates (present 4.78 ) 4.84 5.13 5.13 5.23 5.13
Tax for $200,000 property = $968 $1026 $1026 $1046 $1026
$300,000 property = $1452 $1539 $1539 $1569 $1539
$500,000 property = $2420 $2565 $2565 $2615 $2565
$750,000 property = $3630 $3848 $3848 $3923 $3848
$1,000,000 property = $4840 $5130 $5130 $5230 $5130
$3,000,000 property = $14,520 $15,390 $15,390 $15,690 $15,390

New total tax rate 4.84 5.13 5.13 5.23 5.13
Additional annual tax with this bond if 2022 was year of execution.
year 1 year2 year 3 year 4 year 5 (on to 20yrs.)
$200,000 property = $12 $70 $70 $90 $70
$300,000 property = $18 $105 $105 $135 $105
$500,000 property = $30 $175 $175 $225 $175
$750,000 property = $45 $263 $263 $338 $263
$1,000,000 property = $60 $350 $350 $450 $350
$3,000,000 property = $180 $1,050 $1,050 $1,350 $1,050

It should be noted that first year is interest only, no principal, and why it is much lower.

Let me know if I've gone off the deep end!


(Original format of letter separating the numbers not preserved in this website)