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Date: 12/7/2021
LUDLOW – After briefly opening and continuing the town’s annual tax classification hearing at its previous meeting, the Ludlow Board of Selectmen hosted the hearing at its Nov. 30 meeting and approved a single tax rate for commercial and residential properties.
To start the hearing, Assistant Assessor Jose Alves said both Ludlow’s value and new growth increased in Fiscal Year 2022.
“Values increased as a result of the interim adjustments by approximately 3 percent to 6 percent. The total valuation of the town increased by 6.2 percent. New growth increased by approximately 7.3 percent from $538,861 to $578,193 for fiscal 2022,” he said.
Alves said the new growth included any new construction in town including new buildings, homes or additions to existing homes.
“There is very little commercial construction when you compare it to residential. The residential construction in town is pretty healthy, it is phenomenal actually,” he said.
With the single tax rate, Alves said the average residential tax bill will slightly increase and the average commercial tax rate will slightly decrease.
“Under the current classification rate of 100 percent, the average single family tax bill will increase by $55, and the average commercial tax bill will decrease by $67. Any attempt to shift more of the tax burden to the CIP [Commercial Industrial Product] would result in significant increases to the CIP taxes since these classes comprise only 20.5 percent of the total value of the town,” he said.
Based on data Alves provided during the meeting, if the board agreed to set different rates for commercial and residential properties, at the maximum residents would only see their rate drop to $17.45 from $19.99, while commercial properties would jump a full $10 to $29.99.
During the public comment portion of the meeting East of the River Five Town Chamber of Commerce Executive Director Grace Barone urged the board to maintain the single tax rate.
“We are asking for a single tax rate, it has been a challenging couple of years and with the cost of doing business, shortage of employees, shortage of product and the rising cost of product, this would be one more burden that for so many they might not accept or be able to continue to do business,” she said.
By shifting the tax rate, Board Vice Chair Antonio Goncalves said it would negatively impact the small business owners in town.
“The lion’s share of businesses in this town are owned by people that live here also. It is not shifting the burden to a business; it is shifting it to another person that lives in town that probably has a residence and business. So, they may save a little bit, but they are going to hit on the other side,” he said. “That small shift is a lot of money.”
Board member Derek Barge said despite the fact the town was at the threshold to consider a split tax rate, now was not the time to shift more taxes on businesses.
“Since I have been on the board, we have always discussed the split tax rate. The 20 percent is an interesting thing, I think if we were in a better climate, it may be time to have a more in-depth conversation about that. But at this time, I do not think it is prudent to shift it,” he said.
Board Chair William Rosenblum said it made sense to let the commercial base grow before setting a split tax rate.
“What it does is down the road [it] could help with a split rate more is that we are still attractive to business outside the town. Do I think we’re close? Yes, but I think if we attract more business in, it gets us closer to a split tax rate,” he said.
Along with increasing the commercial tax rate, Board member Manuel Silva said rental property taxes would also increase.
“The problem with splitting rates is that we have a lot of rental properties and once you split rates, the taxes go up, so the property owner passes it on to the lease or the renter and it makes the rentals a little higher. With higher rents you also have vacancy, when you have vacancy, your income approach to value also decreases,” he said. “It is a catch 22.”
The board agreed to set the single tax rate for commercial and residential properties with one abstention and voted against residential and small commercial exemptions, also with one abstention.
The Ludlow Board of Selectmen next met on Dec. 7 and coverage of that meeting will appear in the Dec. 16 edition of The Reminder.