Tax Rate Shift

Discussions about the the ridiculous tax evaluations alot of homes received during this recession. (Great timing). Also, any discussions about taxes at all.

Tax Rate Shift

Postby swamper on Thu Mar 25, 2010 12:59 am

Tewksbury Board OKs tax-rate shift
By Kaitlyn Silva, Sun Correspondent
Updated: 03/24/2010 06:41:06 AM EDT

TEWKSBURY -- Residents and businesses will face a tax-rate increase after the Board of Selectmen changed the tax rate split by a 4-1 vote at a public tax-classification hearing last night.

The shift from 1.54 to 1.41 means the average single-family household will see an increase of 2.35 percent while businesses will be asked to pay an additional 7.3 percent. According to Chief Assessor Jay Kelley, the previous tax-rate split was no longer applicable due to the dramatic drop in residential property value.

Town Manager Richard Montuori described the new split as "reasonable."

"It keeps (residential) taxes from going up over $100, which is a big selling point for some," he said.

"While 1.41 is reasonable, it's not something that I, philosophically, can adhere to," said Vice Chair Anne Marie Stronach, the only person who voted against the new rate. "I think that we as a town are friendly to businesses in our tax split, even in these economic times."

Stronach preferred a rate of 1.45, which would have dropped the residential increase to about 1.2 percent, less than $100, and raised commercial taxes 10 percent, a difference of about $500.

Other members of the board were wary to put so much of the burden on businesses.

"If we're trying to entice business, we need to maintain a balance," said Chairman Todd Johnson, noting the recent efforts to encourage new businesses, especially along Route 38.

"No matter what, we're sliding the responsibility from single-family residential to commercial taxpayers," said Johnson. "Treading water is the best place to be right now. Large swings and variations may rock the boat."

"Shifting to the higher business tax would decrease the likeliness of businesses to open or for businesses to stay," said Selectman Scott Gay.

Stronach argued that business tax rates still pale in comparison to most surrounding municipalities.

"Even if we went to the maximum of 1.5, we'd still be better off than most," she said.

The presentation on the tax rate typically takes place in late autumn, but had to be postponed this year because of the lack of personnel and recertification at the Bureau of Assessments.

The board also voted to allocate $40,000 to the Local Housing Partnership from the Affordable Housing Trust Fund toward plans to build more affordable housing. Also, the board voted to allocate an additional $20,000 to the Elder Services of Merrimack Valley to complete a grant application that could result in 60 new housing units for the elderly at the Tewksbury Housing Authority's property at Saunders Circle. The grant as estimated at $5 million to $6 million.
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Re: Tax Rate Shift

Postby bferrari on Thu Mar 25, 2010 12:51 pm

We've gone through this excercise before and it does nothing to "keep businesses in town" they leave at the drop of a hat. Who wants to do business here?

Hopefully now with a new high school and reenergized population, this will keep the right kind of folks in town, hard working, smart, and involved. With a thriving community, that will attract businesses.

This skewing tax burdens does nothing except ding the working man/woman yet again.
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Re: Tax Rate Shift

Postby cozmo on Thu Mar 25, 2010 2:09 pm

Todd Johnson said ""If we're trying to entice business, we need to maintain a balance,"noting the recent efforts to encourage new businesses, especially along Route 38".

Possibly I'm wrong, but have we had any success in getting any new business to come in on Rt. 38 except for sub and pizza places? All I see are the same old vacant lots and abandoned buildings.
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Re: Tax Rate Shift

Postby amc800 on Thu Mar 25, 2010 2:27 pm

Ummm, we have two 'Dollar Stores'. How many towns can claim that? Does that count as being successful? :mrgreen:
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Re: Tax Rate Shift

Postby ELLE2 on Thu Mar 25, 2010 2:58 pm

Your know this really irks me. Way back when commercial prices were flat and residential prices were through the roof, they did nothing to shift it off the backs of residents but the reverse is never the case. I'm with Anne Marie. Our houses drop 25% in value and we still have our taxes increased by >2%.
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Re: Tax Rate Shift

Postby tess on Thu Mar 25, 2010 7:53 pm

Old man KELLEY has his hands in your pockets again,time for a change in all elected positions. Wonder what his pension will be after we throw him out!!!
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Re: Tax Rate Shift

Postby boo on Fri Mar 26, 2010 9:52 pm

FYI: Jay Kelley isn't elected he's appointed
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Re: Tax Rate Shift

Postby barney on Sat Mar 27, 2010 3:18 pm

FYI - Tess is angry AND stupid.
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Re: Tax Rate Shift

Postby Lilbigmouth on Sat Mar 27, 2010 6:01 pm

does he not get a pension??
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Re: Tax Rate Shift

Postby qwilson on Mon Mar 29, 2010 3:20 pm

This was my first time going through the process and it was very complicated but I will try to share what I know about the shift.

I think the most important thing to understand is that if we had the shift at 1.0 (or we did nothing) then the split between residences and businesses is the same. When you look at the towns that touch Tewksbury and the towns that touch those towns (Andover, Bedford, Billerica, Burlington, Carlisle, Chelmsford, Dracut, Lowell, Methuen, N.Andover, N. Reading, Reading, Westford, Wilmington, Woburn & Tyngsboro) we have seven that have no split (Carlisle, Chelmsford, Dracut, N.Reading, Reading, Westford & Tyngsboro) and seven that are close to the max split (meaning the businesses pay the largest burden - Bedford, Billerica, Burlington, Lowell, Methuen, Wilmington & Woburn).

For FY10 our split was at 1.54 and since residential values went down and business values went up, we legally had to move to 1.50 or lower. If we moved to a 1.50 the Single Family Residential tax rate would have been 12.25/$1000. We chose to move it to 1.41 which makes the SFR tax rate $12.56. If we didn't do a split at all the rate would be $13.98. The split right now means that businesses are 20% of our Property Value but pay 30% of the taxes. Residences make up 80% of our value and pay 70% of the taxes.

My rationale was simple. In FY11 (this tax rate) we will not see an increase for the new HS. We will see that next year. By picking this rate, I believe we leave ourselves more flexibility to move the rate next year so the residents don't get buried under the new HS burden. To me, that is a more appropriate time to shift more towards business. This also minimizes the residential increase while sparing our small businesses in town and provides a better opportunity for them to grow.

The economic development committee is talking to a lot of large businesses but it takes time to work out these deals. We are trying to remain business friendly while also protecting the residents. When you look at the towns with lower residential tax rates it is typically because they have a large industrial/commercial base. Hopefully over the next few years we can see an increase in Tewksbury in that area. That is the one thing that can ease the burden on residential taxpayers.

I also think that this tax increase was the fairest across the board:
SFR +2.35
Condo -0.27
Small Bus -1.39
Large Bus +7.32

Tax Rates by surrounding Towns
Woburn $10.32
Burlington $10.90
Wilmington $11.53
Dracut $11.81
Methuen $11.86
Billerica $12.53
Tewksbury $12.56
The other 10 communities are all higher.

I think for the services we get we still maintain a low SFR tax rate. Just one guys opinion. Would love to hear your constructive thoughts on this topic.
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Re: Tax Rate Shift

Postby wolfpak on Mon Mar 29, 2010 3:54 pm

It's a good thing that this news came out after the vote to fund a new high school. It wouldn't have affected my "yes" vote but who know's..........................
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Re: Tax Rate Shift

Postby ralphjg3 on Mon Mar 29, 2010 4:21 pm

Scott,
Thanks for the clarification as it is way over my head.
My question is where are the services you mentioned compared to the neighboring towns? Our roads and bridges are crumbling, storm drains are sinking and dangerous, shrinking trash removal. I had to pay to remove items after basement flooded, we close fire stations, redistrict schools, lay off teachers, trash on the side of the roads, the street cleaner makes 1 trip down every street per year etc... I know we are in a tough economic time but this stuff has been going on for years.
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Re: Tax Rate Shift

Postby cozmo on Mon Mar 29, 2010 5:01 pm

I would really like to see our water/sewer rates in comparison with those other Towns.
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Re: Tax Rate Shift

Postby swamper on Mon Mar 29, 2010 5:27 pm

FWIW.....Posted on the mtg. thread as well.....

I have heard there is to be a BOS Mtg. scheduled for 7 pm tonight at the Wynn School where the Town Manager's fiscal budget is to be presented. For those interested in tuning in, I am "assuming" being a public mtg. it will be televised on the local Town cable network but more likely to be on the "school" channel as there is a coinciding Planning Board Mtg. scheduled at Town Hall for tonight.
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Re: Tax Rate Shift

Postby ELLE2 on Tue Mar 30, 2010 7:23 am

Since Wilmington seems to draw the most business and also has the max split (i.e. highest tax burden on the businesses) I don't see the logic of keeping the split more burdensome on the residents as being "business friendly" and therefore attracting more businesses to town. Businesses aren't attracted to this town because they can't stay open long enough to make any money. This is where following the master plan (yes there is one) or some other type of coordinated effort from our town government would be useful. A single business in isolation has a pretty uphill battle without any help. And by help, I don't mean cut them deals on taxes. I mean help them draw other businesses that compliment their business so we can have multiple successes. Instead of a charming downtown area we are getting empty strip malls, endless pizza places, dunkin donuts, and tanning salons. Not very creative and not very attractive to consumers.
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