How Milford's Mill Rate Actually Gets Set — And Why No Politician Can Just Promise a Lower One

Part of an occasional Milford Times series explaining how local government actually works

When the Milford Board of Aldermen passed the city's $278 million budget Thursday night, the final mill rate landed at $28.67 — down from prior years. Readers reacting to our coverage on social media have been asking a question worth taking seriously: who actually decides what the mill rate is?

The short answer is: nobody, directly. Or more precisely — no one person.

The mill rate is not chosen, debated, or voted on as its own number. It is calculated. It is what falls out of a formula at the very end of the budget process, after every other decision has already been made.

Understanding how that formula works is the single best tool a Milford resident has for cutting through tax-policy claims in any local election — including the ones being made right now by candidates of both parties.

The Formula

In Connecticut, the mill rate is the dollar amount of property tax owed per $1,000 of assessed property value. A mill rate of $28.67 means a property assessed at $300,000 owes $8,601 in city property tax for the year (300 × $28.67).

The formula the Finance Department uses to arrive at that number looks roughly like this:

Mill Rate = (Taxes to Be Raised ÷ Total Grand List) × 1,000, divided by the Estimated Collection Rate

Three inputs go into that calculation:

1. Taxes to be raised. This is the part of the city budget that has to come from property taxes, after subtracting all other sources of revenue (state aid, fees, grants, fund balance draws, and so on). For Milford this year, it's $239,332,207.

2. The grand list. This is the total assessed value of all taxable property in Milford — residential, commercial, motor vehicles, and personal property. After this year's revaluation, Milford's grand list is approximately $8.45 billion in assessed value (which represents 70% of estimated fair market value, per Connecticut state law). The Assessor's Office, not the Mayor or the Aldermen, determines what this number is.

3. The estimated collection rate. Not every property owner pays on time. The city's ordinance estimates that 98.68% of the taxes levied will actually be collected during the fiscal year, and the formula adjusts upward to account for the small shortfall.

Run those three numbers through the formula and you get $28.67. The Finance Director — currently Peter Erodici — does not select that figure. He plugs the inputs into the equation and reports what comes out.

This is why the Board of Aldermen had to recess Thursday night after passing the budget. The mill rate ordinance could not be drafted until the Finance Director had finished the calculation.

What the Board of Aldermen Actually Controls

If the mill rate is a math output, what do elected officials control?

They control all three inputs to the formula. The formula itself is mechanical, but the inputs are the product of human decisions — decisions made, in Milford's case, by the Mayor and the fifteen-member Board of Aldermen.

The dominant lever, by a wide margin, is the budget size. Every dollar the Board cuts from spending reduces "taxes to be raised" and lowers the mill rate. Every dollar added pushes it up.

Under Milford's charter, the Board of Aldermen can reduce or eliminate any line item in the Mayor's proposed budget by simple majority vote — eight of fifteen members. Adding new spending requires a two-thirds supermajority — at least ten votes.

This produces a clear structural reality that applies regardless of which party is in power: whichever caucus holds at least eight seats on the Board of Aldermen has the procedural authority to reduce the budget, and therefore the mill rate, to whatever level a majority of its members will support. The minority caucus, by contrast, can vote against budgets it opposes but cannot pass alternatives without majority support.

This has been true under Democratic majorities and under Republican majorities. It will be true whichever party holds the majority after the next election. The math of the charter doesn't change based on who's sitting in the seats.

The Mayor controls the proposal — the first draft of the budget that begins the process months before the final vote. But the proposal is just a starting point. The Board of Aldermen has the final word, and its majority has the votes to cut.

Beyond the budget size itself, three additional levers shape the mill rate:

Fund balance draws. The city's "rainy day fund" (technically the unassigned fund balance) can be tapped to reduce what has to be raised in taxes. This year's budget pulled approximately $12 million from the fund — directly lowering the mill rate. The trade-off is that the rainy day fund is finite, and bond rating agencies watch how aggressively it gets drawn down.

Non-tax revenue. State aid, grants, fees, and permits all reduce the share of the budget that has to come from property taxes. Milford received approximately $1.1 million in additional state aid this year above what the Board of Finance had originally recommended.

The grand list (the denominator). This is the only lever that operates on a longer time horizon. Elected officials can't change property assessments mid-cycle — those are set by the Assessor based on state-mandated methodology. But the Mayor, Planning and Zoning, and the Board of Aldermen all influence what the grand list will look like five and ten years from now through decisions about economic development, zoning, and tax-exempt agreements like PILOTs.

The Real Constraints — and the Real Choices

Knowing the formula, a candidate's promise to "lower taxes" becomes easier to evaluate.

Some constraints are genuine. A significant portion of any year's budget is essentially locked in by decisions made in prior years. Contractual obligations to city employees, pension contributions, healthcare costs, and debt service together account for tens of millions of dollars that cannot be reduced in a single budget cycle without renegotiating contracts or restructuring agreements. The Mayor noted Thursday that this year's budget included contractual increases of $6 million in healthcare claims and $3 million in salary contracts — costs that exist independent of any policy decision made in the current cycle.

State and federal mandates impose additional fixed costs. So do basic municipal services that residents of both parties expect: police, fire, public works, schools, road maintenance, and the like.

But within the discretionary portion of the budget — the portion genuinely on the table each spring — the math is unambiguous. A majority of the Board of Aldermen can vote to cut discretionary spending in any amount, at any time, by simple majority. That power exists every year, regardless of which party holds the majority.

This year's budget passed 9-6 along party lines, with all nine Democrats voting in favor and all six Republicans voting against. The nine-vote Democratic majority had the procedural authority to propose and pass deeper cuts if its members had wanted to. They did pass two cost-saving amendments — eliminating three unfilled positions, for combined savings of approximately $189,000. Beyond those, the majority did not propose additional reduction amendments, and the budget passed as recommended by the Board of Finance with technical adjustments.

Republicans argued during deliberations that more could have been cut. Democrats argued that the budget already reflected significant restraint — $3.5 million in reductions to department-requested increases, a five-year phase-in of the revaluation, and a hiring freeze imposed in the final quarter of the prior fiscal year.

Both arguments are defensible on their own terms. What they share is the underlying premise: the majority caucus, in any given year, has the authority to make the budget whatever it wants the budget to be within the discretionary range. The minority can object. The Mayor can propose. But the majority decides.

This is the structural fact worth remembering when any candidate — of any party — promises lower taxes. The relevant question is not whether they personally would prefer lower taxes. The relevant question is what they would actually cut, whether they could hold a majority of fifteen people together to do it, and what trade-offs they would accept along the way.

What This Means for Your Tax Bill Over the Next Five Years

The mechanical reality of the formula is why a falling mill rate doesn't necessarily mean a falling tax bill.

This year, the mill rate dropped — but because the state-mandated revaluation increased the assessed value of most Milford homes, the denominator effectively expanded for those homeowners. The grand list got bigger, the mill rate got smaller, but the dollar tax bill for the average residential property still went up.

Milford's Board of Aldermen has adopted a 5-year phase-in for the new assessments, which means the same dynamic will repeat in each of the next four budget cycles. Assessments will keep climbing toward their full revalued amounts, and the mill rate will keep adjusting in response — even if total city spending stayed exactly flat.

In other words: the mill rate going down is necessary, but not sufficient, for taxes to actually fall.

The Practical Takeaway

For the next several budget cycles, the most useful question to ask any candidate for local office is not "will you lower the mill rate?" — that's largely automatic given the phase-in. The useful question is: "will you grow the total budget, hold it flat, or shrink it?"

That question applies equally to Democrats and Republicans. It applies to incumbents and challengers. And it has the advantage of being answerable in real numbers, against real choices, that any candidate can be held accountable to.

The mill rate is downstream of that decision. So is your tax bill.