Other Lynnfield News:
More budget cuts coming
"Thoroughly Modern Millie" opens at LHS
Residential tax bills going up 10%d
by Robert Curtin
LYNNFIELD — Residential tax bills will be going up ten percent, or
$583 annually for the average resident.
The Board of Selectmen held its annual hearing on tax classification on
Monday, hearing from Assessing Director Paul Keefe, who was accompanied by
Board of Assessors member Ronald Patton. No member of the public spoke at
the hearing.
The board, as it has since Fiscal Year 2004, voted to adopt a split tax
rate, which allows the town to tax commercial, industrial and personal property
at a higher rate than residential property.
By adopting a shift factor of 1.14 (increasing the tax levy on business
property by 14 percent with a proportional drop of the levy on residential
property), the Board of Selectmen roughly equalized the percentage of increase
in tax bills for both residential and commercial payers. That has been the
board’s policy since it adopted the split tax rate, and was first suggested
by Town Administrator William Gustus, who recommended this course again this
year.
Gustus explained that this approach ensures that regardless of the fluctuations
of values for residential and business properties as a whole, the share of
the tax burden assumed by members of each category will remain roughly equal.
The 1.14 shift factor will result in residential taxes increasing by 10
percent, with a rate of $11.22, and commercial and the commercial, industrial
and personal (CIP) rate increasing by 10.8 percent, with a rate of $12.94.
The Board of Assessors, as it has for decades, recommended the adoption
of a single tax rate, of $11.35. Had the selectmen adopted this recommendation,
the average residential tax bill would have increased by $657 annually, or
11.3 percent, and the average business tax bill would have been reduced by
$340 annually, or by 2.8 percent.
Since the merits of a single or split tax rate have been debated at length
at previous tax classification hearings, there was little appetite to repeat
those arguments. When the Board of Selectmen first adopted a split tax rate,
members of the Board of Assessors predicted that it would be politically impossible
for the town to go back to a single rate, as it would result in a large tax
increase for residents.
This year’s major increase in the tax bills for Lynnfield residents
and business property owners is due to the usual annual increase in spending
allowed by taxing to the maximum amount allowed in Proposition 2-1/2, the
exhausting of the surplus in the School Building Fund that allowed the town
to reduce the tax burden on residents resulting from the “pain-deferred” Proposition
2-1/2 override of two years ago, and the decision made at October town meeting
to levy for the first time under the debt exclusion passed with the acquisition
of the Lynnfield Centre (now Reedy Meadow) golf course.
Town officials recommended to voters a plan for taxing under that debt
exclusion in order to build town reserves for next fiscal year in light of
likely cuts to state aid and declining miscellaneous local revenues.
Keefe made the main presentation on Monday night due to the absence of
Board of Assessors member Richard Simmons Jr., who was performing the same
function in Belmont in his capacity as a professional assessing manager in
that town.
Keefe noted that property values for the purpose of this fiscal year are
based on values as of January 1, 2008.
They are established by using three factors — a cost approach, studying
sales prices for comparable properties, and an income-based approach for commercial
properties.
He noted that for the town’s single-family homes, median sales prices
increased dramatically from about $350,000 in Fiscal Year 2000 to about $550,000
by Fiscal Year 2005. Since that time, there has been a “slight retrenching
and leveling off,” with values closer to $500,000 over the last several
years. Home values are actually down two percent for Fiscal Year 2009, and
down 4.5 percent from two years ago.
Commercial values soared quickly from Fiscal Year 2002 to 2002, they flattened
out before another big increase in 2005, and have remained flat since.
The town’s tax base remains heavily residential, with 92.3 percent of
the total value in that category, with the remaining value divided into commercial
(5.9 percent), personal (one percent) and industrial (0.8 percent) categories.
Despite the passage of overrides and debt exclusions in recent years, Lynnfield
still has a relatively low property tax burden when compared to other suburban
towns in the region. The average single-family tax bill of $5828 in Fiscal
Year 2008 was higher than the tax bills of North Reading, Reading and Middleton,
which ranged from $5803 to $5357, but lower than those of Wenham, Boxford,
Swampscott, Hamilton, Topsfield, Andover, Marblehead and North Andover, which
ranged from $8260 to $5867.
Wakefield’s residential tax bill was significantly lower than Lynnfield’s,
at $4101.
As it has every year, the Board of Selectmen showed no interest in adopting
either the residential exemption or the commercial exemption.
The residential exemption exempts from taxation a percentage ranging from
0 to 20 percent of the average residential value for every owner-occupied
residential property, and increases the residential tax rate to maintain the
amount of the residential levy.
It is generally adopted in communities that have a many apartment buildings
(Boston, Cambridge, Somerville) or many seasonal rental properties (Nantucket).
In a community such as Lynnfield, without a significant amount of properties
in either of these categories, adoption of the residential exemption would
essentially become a graduated property tax, shifting, as Keefe pointed out,
the tax burden from less expensive homes to more expensive homes.
In an example given by Keefe, adoption of a residential exemption of about
10 percent would result in the annual tax bill on a residential property valued
at $300,000 to be reduced by $327, with the owner of a property valued at
$800,000 paying $215 more annually.
The commercial exemption applies to commercial properties worth less than
$1 million and occupied by businesses with 10 or fewer employees. The property
tax reduction is realized by the property owner, not the business tenants
in rental properties. Only five of 351 municipalities in the state have implemented
this exemption, which Keefe said would involve a great deal of paperwork and
verification while benefiting very few property owners.
|
