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Date: 11/6/2023
NORTHAMPTON — The City Council will vote on a tax rate for all property categories for fiscal year 2024 during their meeting on Nov. 16.
Under Massachusetts General Law, the City Council and mayor decide each year whether to implement a single tax rate or a split tax rate in the city for the four property categories in the city, which include residential, commercial, industrial and personal property.
The City Council approved a single tax rate for FY23, which meant all four property classes paid the same tax rate, which was $15.84 per $1,000, the lowest it was since 2015, according to Marc Dautreuil, the city’s principal assessor.
In a presentation during the Nov. 2 City Council meeting, Dautreuil recommended that the city maintain a single tax rate based on information from the Massachusetts Department of Revenue.
“It is by far the most prudent thing to have a single tax rate as we Northampton simply do not have the economy or the infrastructure to support a split rate,” Dautreuil said, during the meeting.
If the city were to maintain a single tax rate, it would result in an FY24 tax rate of $15.19 per $1,000, which would be a decrease of $.65 from the previous fiscal year. If the city went with a split tax rate, the residential tax rate would be $13.70 per $1,000 and the other three classes would have a rate of $22.79 per $1,000.
According to Dautreuil, the single tax rate is the norm for communities in the state that do not have large commercial bases, like Northampton.
“Splitting the tax rate, in my opinion, will put an unnecessary burden on the commercial, industrial and personal property classes, which are already hurting from lingering aspects of COVID-19, inflation, low growth and lack of large construction projects,” Dautreuil said. “Cities that have very large commercial businesses like malls or power plants, those are towns that split tax rates and towns that have very large industrial complexes … none of which Northampton has.”
A single-family home had an average assessment of $477,690, according to Dautreuil, which is an increase from the $424,527 average last year. If the city decided on a single tax rate for FY24, those homes would have an average tax bill of $7,256.
If the city decided to split the tax rate between the four property categories, the average tax bill for single family homes would drop to $6,544 on average, but the average commercial tax bill would increase by $4,959 and the average industrial tax bill would increase by $6,687.
A chart provided by Dautreuil illustrated that the percentage of value within the residential class is 10% higher than it was last year while the property revenue rose by just under 6%.
“The rise in residential property revenue is a direct reflection of the rise in sale prices of residential homes,” Dautreuil said.
Single-family homes were used as a metric because they are by far the largest subdivision of all properties in the city, according to Dautreuil.
“I do not believe in splitting [the tax rate] right now. I think that is not a good idea,” said City Councilor Marianne LaBarge. “I feel because of the economy and so forth, this is the right direction to go to right now.”
City Councilor Alex Jarrett also agreed with the recommendations to maintain a single tax rate in the city, but he also acknowledged how difficult it is to see residential property values continue to increase, and he wishes there were more ways to offer relief outside of what the state already offers.
“It’s frustrating that the exemptions that we’re able to give, we give all the ones that we really can and that the state allows us to; and it would be great to be able to offer something different,” Jarrett said.
“I would love to give that relief, but we don’t have the commercial industrial tax base to do it.”
The plan is for the City Council to vote on the rate at their next meeting on Nov. 16 at 7 p.m.