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Date: 12/12/2023
LUDLOW — Based on a presentation given by the Board of Assessors, the tax rate is projected to decrease in fiscal year 2024.
The tax rate will be at $18.09 per $1,000 valuation compared to last year’s $19.51 per $1,000 per valuation which is a 7.3% decrease.
The Board of Assessors met with the Board of Selectmen on Dec. 5 to host a tax classification hearing.
Although the tax rate is expected to decrease, the average amount of taxes property owners will pay will increase.
With the single tax rate, Board of Assessors Chair Tony Rosa said the average tax bill for residential, commercial, industrial and personal tax bill will all increase.
“Under the current classification rate of 100%, the average family single family tax bill will increase by $263 which is a 4.9% increase from $5,362 last year to $5,626 this year. Any attempt to shift more of the tax burden from the residential to the commercial, industrial and personal classes — also known as CIP — would result in a significant increase in those taxes since this class comprises of only 20.2% of the total value of the town,” Rosa said.
He added that the average CIP tax bill is also set to increase by $1,029 which is a 9.1% increase.
The tax levy has increased by approximately $2.6 million which is a 5.3% increase.
Selectman Manny Silva discussed a problem he sees with increasing tax levy.
“I am worried with what we are doing. We are leaving $20 in excess levy capacity. I just did one in Southbridge, and we are leaving $1.4 million in excess levy on there. Each and every year we are taxing to the brink, and we just keep taxing our residents day in and day out an awful lot of money,” Silva said.
He added, “It is amazing to me how we just keep doing it year in and year out and taxing, taxing, it’s just going to get to a breaking point. We need to somehow figure out what we can do and start tightening our belt and start cutting.”
Property values have increased by approximately 9-14% and the total valuation of the town increased by 13.5%.
Rosa said the new growth included any new construction in town including new buildings, homes or additions to existing homes.
Rosa said, “New growth increased by approximately 80%. Much of that increase was attributed to the industrial class where two new commercial solar installations added $19.1 million to the town’s value.”
Funds from the Ludlow Mills construction was not included in this fiscal year tax classification presentation due to the ongoing construction.
“They are starting to do a lot of construction over by the mills so I would think next fiscal year we should start picking up a lot of that as well. The more construction the more that helps on the residential end of keeping the tax rate low,” Rosa said.
Although there is a $2.6 million increase to the overall town budget and the town would like to save money, Selectman Tony Goncalves said that there are multiple departments already asking for increases to their budget.
He said, “The school department has asked us for $2.5 million over last year, just the school department. We’re not even talking about contractual obligations with the employment, the insurance benefits, etc. are all going up this year. Our hands are a little tied on let’s not spend it because everybody is coming at us from all directions.”
The Board of Selectmen also discussed the small commercial exemption which allows the town to give small commercial properties a 10% exemption if they have under 10 employees.
Silva said, “What happens there is the value gets prorated and switched to the ones that do not get this exemption. It is just a shift within the commercial. It does nothing for the residential. It just shifts the money in the commercial and this would benefit the smaller commercial businesses.”
The residential exemption is where the state recently increased that exemption to allow up to 35% of shifting.
“That there will shift taxes only in the residential. In other words, the residential lower end properties will get a tax reduction and then as you get up into the higher end bracket, usually to around where your average is, it will increase so that the higher end will pay for those who get the break,” Silva said.
The board agreed to set the single tax rate for commercial and residential properties and voted against residential and small commercial exemptions.