If a plan being advanced through the City Council is adopted, average single-family owner-occupants could save $1,856 on their property taxes this year. That savings rises to $2,084 for two-family and $2,486 for three-family owner occupants.
“That’s obviously a huge savings that translates into about a 46 percent reduction on property taxes,” said Councillor Brian Hatleberg, the Council’s Subcommittee on Finance Chairman. “Achieving such savings is always among our most important votes.”
That being said, homeowners will see an increase in their property taxes over what they were last year – especially those with multi-family homes.
Taxpayers comparing their annual bills are likely to see an increase in their tax charges for FY’13. City Manager Jay Ash projects that single-family and condo owners will see about a 1 percent increase, while two- and three-family owners will see about an 8 percent increase from their FY’12 bills.
Said Ash, “The overall savings from the Council action does reduce tax bills substantially from what they would otherwise be. However, those greatly reduced bills are still subject to a year to year change, and, for this year, it is likely that most tax bills will go up,” explained Ash.
Council is expected to take-up two property tax related matters at its next regularly scheduled meeting on Nov. 19th. State law allows for communities to shift property tax burden from residential properties to commercial and industrial properties and allows for a further shift in tax burden from owner-occupants of residential properties to investor-owned residential properties.
“They’re votes I’ve routinely said yes to,” informed Councillor President Leo Robinson. “Making and keeping Chelsea the most affordable place to own and live in one’s home has long been a priority for us.”
Added Councillor Calvin Brown, “These are important actions to reward local owner-occupants for maintaining their investments in our community. Homeowners are the backbone of this community and we need to continue to make sure that their taxes remain as low as possible.”
Figures recently released by Ash indicate that single-family owner occupants pay an average of at least 40 percent lower property taxes than do homeowners in Revere, Everett, Winthrop, Malden, Somerville, Boston and Lynn. In fact, in one of those communities, the average single-family owner-occupant pays more than double the $2,116 the average Chelsea homeowner would pay if the Council takes the anticipated actions.
“The Council has done a great job keeping Chelsea affordable while ensuring that we have good services on top of that. We wish we had more revenue to do much more, but I believe we’re offering a great deal while still being far below our neighbors in property tax measures,” said Ash.
Said Councillor Dan Cortell, “We’re balancing budgets, maintaining services, repairing our infrastructure and sparking rejuvenation in our community; all with less property taxes coming in than anywhere else in the region. Yes, there’s always more that can be done. But with what we have for resources, I’d say that taxpayers are getting the most efficient government possible.”
In FY’09 and FY’10, two- and three-family houses saw taxes plummet by 40 percent. Over the last three years, including FY’13, Ash says taxes have gone up on those properties by 20 percent.
“We take the votes to deliver the lowest possible residential taxes while still raising the 2 ½ percent we are allowed to raise under Proposition 2 ½. Swings within the various categories are typical, as there are numerous items that influence the eventual tax property owners pay. In the end, though, for our residential owner-occupants, we remain quite sure that our taxes are among the lowest, if not the lowest in the area,” said Ash.
The same cannot be said for business taxes, though. Ash projects that business taxes will go up about 5 percent as a result of the Council votes to reduce the tax burden on residential tax payers, and acknowledges that businesses are subsidizing residents by paying a higher percentage of the overall tax burden.
“Not every community takes such action, so business tax rates are all over the place. It is fairly typically in cities, though, and we are in line with what our neighbors assess, and are in fact lower than several of our neighbors when it comes to the business tax assessment. Nonetheless, while we believe we are both fair and competitive in the business environment around us, we also need to recognized that our business community is paying a higher rate in order for us to keep our residential taxes as low as they are,” added Ash.
Council will hold a public hearing on the two tax questions on Nov. 19th and then is scheduled to take up votes on the matters following that. The hearing starts at 7 p.m. during the Council’s regularly scheduled meeting in the Council Chambers.