Rutland treasurer warns reassessment, lower grand list could raise tax rate

Rutland City Treasurer Markowski told the Board of Aldermen on July 7 that the city’s budget for fiscal 2026 is up by “close to $700,000,” and that a recent state-conducted reassessment of utilities has reduced Rutland City’s grand list by about $7 million — a change the treasurer said would cut the city’s property tax revenue by roughly $132,000 if left unchanged.

The treasurer presented the figures as a preliminary estimate ahead of the formal tax-rate setting and said the city faces simultaneous pressures: higher budgeted spending, lower non-tax revenues in some lines and a reduced grand list driven by the state’s utility valuation update.

Why it matters: the tax rate calculation uses the city’s budget needs offset by non-tax revenue and the taxable grand list. A smaller grand list or lower transfers into the general fund means more of the budget must be raised through property taxes.

Markowski outlined components affecting the tax-rate calculation: the FY26 budget increase, an estimate of other revenues (recreation fees, permits and similar receipts), and transfers from enterprise funds (water and sewer) that are down from last year. He said the transfer reduction from water and sewer is about $286,000 compared with last year’s calculation and is investigating departmental allocation changes behind that drop.

Assessor Langlois and others told the board the statewide reassessment of utility transmission and substation values was performed by a state-contracted vendor and applied with a different methodology than prior practice. Markowski said the statewide reassessment produced mixed results across municipalities and that Rutland City’s utility line values decreased materially under the new method.

“[The reassessment] took away all of the gain … that came in the end,” the assessor said, describing a multi-million-dollar adjustment in a single account that erased the year’s valuation gains. The treasurer later presented a quick estimate that the grand-list change equates to about $132,000 less tax revenue for the city.

Officials discussed options the board will consider when setting the tax rate, including using unassigned fund balance to smooth the impact. Markowski listed several competing uses for fund balance that the board may be asked to authorize: two additional police positions (estimated at about $220,000 if filled), a planned DPW truck purchase the department wants to roll forward, and previously voter-approved increases to public safety and other public-service budgets. He also noted an existing fund-balance assignment (about $574,000) that staff plan to unassign to make those dollars available during the tax-rate calculation.

Board members asked whether contesting the state’s reassessment was feasible. The assessor said the state used a uniform methodology and that towns reported mixed outcomes; she offered to investigate the cost and process of a potential grievance and report back.

Next steps: Markowski said he will produce a proposed tax rate for board consideration at the next scheduled meeting and invited aldermen to raise questions before the formal vote. He recommended the board and committees review the fund-balance assignment requests and any contingency use before finalizing the rate.

Ending: The treasurer framed the upcoming tax-rate decision as a balance between funding municipal needs and limiting burden on taxpayers, and promised more detailed numbers at the board’s next meeting so aldermen can decide whether to apply fund balance or other offsets when they set the FY26 rate.