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Date: 12/8/2021
EASTHAMPTON – Easthampton’s property tax rate for fiscal year 2022 (FY22) has been set.
Principal Assessor Randall Austin and the Board of Assessors announced on Nov. 30 that the Massachusetts Department of Revenue (DOR) had certified a rate of $16.53 per $1,000 of assessment. That number represents a reduction of $1.01 from the $17.54 rate for FY21.
In mid-November, the Easthampton City Council had voted to maintain a single tax rate with no exemptions or discounts in FY22.
“These classifications are the same they have always been,” Councilor Dan Rist told the council during the tax classification hearing before that vote occurred on Nov. 17. “I don’t recall in my 25 years on the council having ever changed them.”
While he noted there had been some consideration over splitting the tax rate, Rist said, “We’ve never done that and the reason is if you look at this, 87 percent of the tax burden is borne on residential properties; almost 13 percent is carried by all other classes of property such as commercial. If we were to split the tax rate in order to help the residential property owners, as our assessor said last night, it would require a 50 percent increase in the rate given to businesses in order to make a dent in the property taxes to residential property owners … As far as I’m concerned, that would drive businesses out of town. We have always been business-friendly … We are not a big city that needs to have that rate.”
Principal Assessor Randall Austin concurred, saying, “We have a small commercial base and so if we were thinking of splitting the tax rate, that would put a tremendous burden on [business owners]. That 12.8 percent is commercial, industrial and personal property – which is another aspect of having your own business – so it really would put a strain on our commercial people in town – and industrial – if we did that and the benefit really is not necessarily needed or is going to be of such great amount – it’s not significant enough to really go there.”
More specifically, information provided to the council stated that using the maximum allowable shift to raise rates on other property classes 50 percent would result in a 7.4 percent decrease in the residential tax rate.
Regarding a potential open space discount, Austin said it didn’t apply to Easthampton.
The Board of Assessors also recommended against a residential exemption, which would allow up to 35 percent of the assessed value for owner-occupied residential properties with the burden shifting to other properties in the residential class. Austin explained larger cities with a large commercial base may use this but it was not appropriate for Easthampton.
Austin also advised against a small commercial exemption that would defer up to 10 percent of the value of commercial property for businesses with less than 10 people and valued at less than $1 million. Again, he said this is more applicable to a community with larger, more diverse commercial base.
The DOR also certified the town’s total property value at $1.97 billion.
The total value for single-family homes in Easthampton grew 8 percent from FY21 to FY22, according to information Austin provided the City Council. Commercial property values, meanwhile, remained relatively steady with a 1.2 percent increase.
“That’s something we basically had to do because of the way the market was going. We did not make a change in land values [and] commercial values remained the same but we did raise the values for the residential class of property,” Austin said.
The council also transferred $2 million from Free Cash to the General, Capital and Tax Rate Stabilization funds. The move appropriated $1.2 million to General Stabilization, $500,000 to Capital Stabilization and $300,000 to Tax Rate Stabilization during the Nov. 17 meeting.
Rist characterized these as “rainy day accounts” and the moves created a “stable fiscal environment for the city and a profile for the bonding agencies, which is why our bonding rate is high – they know we have the money to pay our debts.”
After the transfers, the General Stabilization had $4.5 million, Capital Stabilization rose to $2.5 million.
Rist added the Tax Rate Stabilization transfer was designed to reduce taxes created by bonding, most notably the new Mountain View School. “The mayor has tripled that this year up to $300,000 and I am grateful for that,” he said.
After the transfers, the Free Cash balance was just under $2 million, according to Rist.