With residential taxes poised to increase between 2 and 17 percent this upcoming year, City Manager Jay Ash is inviting interested parties to attend an informational meeting tonight (Thursday, November 6th) at 6 p.m. in the Council Chambers.
“We’re saving residential owner-occupants approximately 44 percent on their property taxes, but the tax increases come at the expense of saving even more. We remain the least expensive place in the region to own and occupy a house, but I want to make sure that everyone’s opinions are heard and as much information as possible gets out there about where taxes are going,” said Ash.
The 44 percent savings Ash references refers to the City Council’s annual approval of a shift of tax burden from residents to commercial taxpayers, and then another shift within the residential classification that has the effect of placing a higher tax burden on investor-owned residential properties.
According to figures provided to the City Council by the City’s Assessing Department, the Council’s anticipated vote on approving the two shifts will reduce the average single-family owner-occupant tax bill to $2,487, instead of what would have otherwise been a $4,436 tax bill. Ash explained in an e-mail to residents this week that the proposed tax increases reduce what would have been a $2,197 savings by 10 percent, to a $1,948 savings.
“Owner-occupants are still going to see a major savings, it’s just this year the savings are only 90 percent of what it would have otherwise been,” said Ash.
Local property taxation is set by state law, so Ash says the City is following the prescribed formula. That formula results in some years, like FY’10, when residential taxes went down 5-24 percent, and some years, like FY’15, when the reverse will be true.
“Each year, the City is only allowed to raise a total of 2.5 percent more in property taxes. However, residential and commercial property owners will see more or less than a 2.5 percent increase annually, depending upon how fast values are rising or falling. Last year, single-family homes saw a 14 percent increase in values, and two-families skyrocketed by 20 percent. While that is good news for owners who are selling or are looking to unlock equity in their homes, it does mean that annual property tax increases take a bite out of the overall savings the City Council provides annually,” stressed Ash.
At the meeting on Thursday, Ash will briefly review the state tax law, and then review how values and their effects on taxes are being calculated. There will be time for questions and answers at that meeting. Then, on Monday, Ash will make a formal presentation to the City Council at 6 p.m., followed by the City Council taking public testimony at 7 p.m.
“There’s been some confusion in the past by some residents about what the Council is reviewing. The Council vote will save owner-occupants that 44 percent. If they don’t vote to do so, then tax bills will almost certainly double. So, I think we all want Council to continue to support owner-occupants by taking their actions to reduce tax bills. In terms of the one year impact, we are working to make sure that the costs of servicing city government don’t go up any further,” emphasized Ash.
Council President Matt Frank announced last week that he would like to investigate whether the City could increase the owner-occupant tax break this year to help ease the burden of what will be a significant increase.
On his last point, Ash said, for example, that the City is contemplating building a $57 million new school, but will not be asking voters for an override to fund the City’s share, which could be as high as $20 million.
“In many communities, that cost is passed on directly to taxpayers. Here, in addition to being very grateful to our State legislative delegation, the Patrick Administration and Treasurer Steve Grossman for providing us with significant grant assistance, the remaining $20 million will be covered by existing reserves and future economic development expansion.
“Thus, we won’t be asking for even more in property taxes, and we’re using the same approach to not need additional funding for general operational issues,” reported Ash.
The meeting is expected to be televised live as well on local cable television. Ash said he is also accepting and responding to inquiries via email at [email protected].
“We’re trying to be transparent, live within our means and continue to offer low costs for great outcomes. We’re accomplishing all of those goals, but the process of taxation is a bit complicated and sometimes feels more burdensome than it really is. We’ll take these next three meetings to talk with people about what is happen and do our best to keep people informed of all we are actually accomplishing to keep taxes low and services high here,” concluded Ash.