SOUTHINGTON — A contested land valuation court case decided against Southington will result in a loss of local tax revenue for upcoming fiscal years.
New Britain’s Board of Water Commissioners contested Southington’s valuation of more than 1,200 acres of land the New Britain Water Department owns in Southington and on which it pays taxes.
Southington has valued the land at about $2,500 per acre. In October 2020, that valuation jumped to more than $5,600 per acre. The New Britain Water Department appealed the valuation and the accompanying tax increase.
Following a judge’s decision in October, New Britain’s Southington holdings will be valued at $2,100 per acre.
The loss for Southington is threefold, according to Board of Finance Chairman John Leary. The town won’t get the additional taxes from the higher valuation. Southington also had the value of the land reduced from previous years by about $400 per acre. It also must credit the New Britain Water Department for overpayment of taxes since the revaluation.
“It went backwards on us,” Leary said.
Town Attorney Alex Ricciardone said the town and New Britain were still finalizing what the total credit would be and the impact to Southington.
Valuations and taxes
The amount of real estate taxes owed is determined by the town’s tax rate and the value of the property. The tax rate, or mill rate, is the number of tax dollars on every $1,000 of assessed property value. Property value assessments are determined by taking 70 percent of a property’s fair market value.
The largest parcel of land New Britain owns, 375 N. Shuttle St., totals 410 acres and generated $45,000 in taxes for Southington last year.
While the mill rate has stayed just over 29 for bills due in 2021 and 2022, New Britain only owes about $17,500 on those 410 acres this year due to the adjusted land value. The city had been paying about $22,000 per year before Southington’s revaluation.
Town records show the appraisal of 375 N. Shuttle St. as just over $1 million until the revaluation in 2020 when the appraisal jumped by nearly $1.2 million. Following October’s court case, the appraisal of $2.2 million dropped to $860,000.
New Britain’s largest holdings in Southington are in the northeast corner of town. They include the Shuttle Meadow and Wassel reservoirs as well as surrounding land.
Valuing water supply land
New Britain filed the case early last year, claiming Southington’s valuation of the undeveloped land was too high. New Britain enlisted the testimony of Christopher Kerin, a real estate valuation expert, during the trial.
Kerin’s analysis of recent development rights purchases led him to the value of $2,100 per acre for farmland or similarly undeveloped land. State statute determines that water supply land is valued as improved farmland.
Southington’s valuation expert, George Malia, based his valuation of $7,500 per acre on land sales and what sellers and buyers determined the land, but not improvements to the land, were worth.
Statewide, farmland is valued between $850 and $1,880 per acre. Superior Court Judge John Cordani wrote that those valuations were the most applicable to the properties held by New Britain in Southington and ruled in favor of Kerin’s estimates of land value on Oct. 11.
Leary and the finance board will soon begin working on a budget for the 2022/23 fiscal year. With the town losing some money through the decreased valuation on New Britain land, Leary said the Southington Water Department might be able to find savings through a look at the valuation of land Southington has in other towns such as Wolcott.
Leary didn’t believe the decline in tax revenue as a result of the court case a cause for concern. The upcoming budget will be challenging, he said, but mostly as a result of pandemic money drying up and other factors.