Split Tax Vote

At the December 9th Municipal Council Meeting, we decided to set the property tax rate for residential and commercial, industrial and personal(CIP) property at the same rate of $16.53 per $1,000 of assessed value. For the two years prior, the tax rate had been split, with residential rates below the rates for the CIP class, which were set at a factor of 1.15. This means that in 2008, residential tax payers paid $14.60 per $1,000 and CIP paid a rate of $17.20 per $1,000 (about 18% higher). In 2007, it was $13.16/residential and $15.47/CIP.

I opposed the split when it was enacted in 2006. As a residential taxpayer, I understand the appeal of the split--lower tax bills for homeowners. But this is won at the direct expense of the CIP property classes. Each December, we set the tax rate in order to raise the revenue needed to fund the annual budget approved the previous summer. The CIP class only represents about 14% of our total property tax base and the number of parcels has been shrinking of the past years. So, raising the rate on this class is like trying to squeeze a shrinking lemon.

What drives your tax bill and my tax bill is not the rate but the budget. The rate is just a function of the amount of money that needs to be raised as revenue. Splitting the tax provides the illusion of lowering taxes but not the reality of it.

I've looked at a lot of data from the Assessor's office and the MA Dept. of Revenue and have talked about this issue with many constituents, the overwhelming majority of whom wanted to return to a single tax rate. When it came to setting the rate, we had the option of keeping it, widening the split, reducing the split or getting rid of it completely. In the end, we decided that it was best to simplify the process and return the rate to single rate all at once.

For reference, over the years 2000-2009, we have had 4 years with higher rates and 5 years with lower rates. From 1990-2009, we have had 11 years with higher rates and 8 with lower rates. CLICK HERE to see some comparative information. As you can see from this chart, as property values rise, rates drop and as values drop, rates rise. We are in a period with a strong decline in values, so our rate went up accordingly. You can also see that our average residential tax bill is slightly above the state average but follows it very closely from 1990 to now.