When residents opened their tax bills in July 2022, they saw the 4.5% tax increase. Using a sample 1,200 SF single family house Southwood Acres, property taxes went from $4,265 → $4,457 or a $192 increase. [For context, Social Security recipients received an 8.7% Cost-of-Living Adjustment (COLA) for their 2023 benefits, reflecting the high inflation of 2022.]
📌 Cause: This tax hike was driven by the 2021 revaluation, which shifted more of the tax burden from commercial to residential properties, not by increased spending.
In 2023, the same Southwood Acres homeowner saw a 8.7% tax increase to $4,843 in their July 2023 mail. [Again, for context: Social Security recipients received a 3.2% COLA for their 2024 benefits, reflecting the inflation of 2023.]
📌 Cause: The FY2024 budget (adopted in May 2023) increased spending by 6.66% and raised the mill rate from 27.89 to 30.56, leading to higher taxes.
📌 Offset: The town used $5.65 million from the fund balance to prevent an even larger tax hike.
This correction better illustrates the central point: tax increases aren't just tied to spending levels—revenue and revaluation shifts also play a major role.
This analysis was driven by a recent decision by the Charter Revision Commission (CRC) approved a budget referendum, but only if a budget is proposed that exceeds a 7% increase. If the budget fails in the referendum, it would automatically be capped at 7%.
A referendum threat acts as a de facto budget cap, and while this proposal sounds like a straightforward way to control taxes, it fundamentally misunderstands how property taxes work.
Enfield's main problem is revenue. Property taxes must make up the difference when other revenue sources decline—whether state aid, investment returns, or fees. In fiscal year 2023, miscellaneous revenues dropped by nearly 50%. Even with careful spending control, such revenue losses force higher property taxes to maintain basic services. But Enfield's more serious issue is the grand list.
Grand List Impact on Tax Rates
If commercial, industrial, and personal property tax sources aren't keeping up with the residential share of the grand list pie, the tax burden on homeowners increases.
Before the 2021 revaluation, residential properties made up 60.05% of Enfield's grand list. By 2022 (our first post-revaluation data), that percentage had increased to 61.42%. This might seem like a small percentage change, but it represents millions of dollars in shifted tax burden to homeowners.
To find the residential share of the tax burden, divide the residential property value by the total grand list value and multiply by 100 to get the percentage.
For example:
In 2020 before revaluation:
Residential property value: $1.80 billion
Total grand list: $3.00 billion
$1.80 billion ÷ $3.00 billion = 0.6005
0.6005 × 100 = 60.05%
In 2022 after revaluation:
Residential property value: $2.28 billion
Total grand list: $3.72 billion
$2.28 billion ÷ $3.72 billion = 0.6142
0.6142 × 100 = 61.42%
This tax shift to residential explains why both parties have struggled with taxes. The Democrats faced a double challenge: their spending goals and the increased residential tax burden from revaluation. Now the Republicans, despite campaigning on tax relief, face the same structural challenge, as shown by their continued reliance on fund balance ($3.88M) in the fiscal year 2025 budget.
If the CRC changes its approach from a budget cap to a tax cap, it faces an entirely different problem: predicting the future.
Multiple Factors Can Hurt the Town's Finances:
• Revaluation Risks: If property values shift dramatically during revaluation, as they did in 2021, it may force the town to make deep service cuts.
• Business Sector Vulnerabilities: Major business closures that shrink commercial, personal property, or industrial tax revenue will set the stage for another residential tax shift.
• Economic Development Challenges: Failing to reach economic development goals undermines efforts to rebalance the tax burden.
• Federal and State Funding Uncertainty: The current political climate in Washington, with a Republican-controlled House focused on spending cuts and the uncertain future of federal programs, elevates this risk.
• Economic Volatility: Macroeconomic problems, such as a recession, or declines in investment income, can unexpectedly reduce revenue.
Meanwhile, the town faces unyielding obligations:
🟥 Contracted salary increases
🟥 State-mandated education spending
🟥 Debt service costsWhat's clear: A Spending Cap Does Nothing
A budget spending limit or a tax cap accomplishes nothing. No council is likely to propose a 7% budget increase unless faced with significant, unavoidable costs. But a tax cap would be like promising to control a car's speed while someone else controls the engine, brakes, and road conditions. It might sound good to voters, but it could damage town services and financial stability.Top priority: Economic Development
There are hard limits to spending cuts, unless the town wants a smaller police department and larger classroom sizes. Enfield's budget outlook depends on successful economic development. That ought to be the number one priority. Only by growing our commercial and industrial tax base can we address the structural imbalance that puts an unsustainable burden on residential taxpayers. Budget or tax caps, in any form, are gimmicks—more a product of frustration than of prudent financial planning. What Were the Political Implications of the 2021 Tax Shift?
After 16 years of Republican control, Democrats won the council majority in 2021—only to lose it in the 2023 election, with Republicans blaming them for the tax increase. But the real story is more complicated. The 2021 revaluation shifted more of the tax burden onto homeowners, exposing weaknesses in the commercial grand list—a structural problem that developed under Republican leadership.
Focusing only on spending distorts the real forces driving Enfield’s tax issues. Without addressing the stagnant commercial tax base, no party can deliver meaningful, long-term tax relief.
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