Tax burden increases for commercial land
Published on November 30th, 2005
The town's Board of Selectmen unanimously increased the tax burden of commercial property owners last week by readjusting the dual tax-rate to a 160 split.
Essentially meaning that local businesses will pay 1.6 times the tax rate that is assessed on residential properties, the Selectmen adopted the new figures at the request of the town's Board of Assessors, who argued that rising the commercial/industrial shift by 10 percent was fair to all Stoneham taxpayers.
"When the tax rate is reclassified, a greater burden is shifted to commercial and industrial properties. But shifting the burden does not raise taxes, it just redistributes how taxes are levied," Assessor's Dept. Director Frank Golden explained.
According to Golden, by increasing the commercial tax burden by 10 percent — it was raised by 25 points to 150 percent last year — the residential rate would drop 79-cents to $9.67 per $1000 valuation. The commercial rate would similarly drop by 8-cents to $16.67 in FY06.
Although the decrease of both rates would seem to indicate that fewer tax dollars will be brought in by the town, the rise in the assessed value for both property types means that more revenues — an approximate 2.5 percent jump in the overall levy amount — will be generated.
According to figures prepared by the Assessor's office, the average residential dwelling value rose approximately 10 percent this year, resulting in a median $67 increase in citizen's tax bills this year with the new tax rate.
Commercial property values, which stagnated and in some cases even dropped in recent years, increased by an average 6.6 percent, meaning business owners will see a much more significant $958 rise in taxes.
"If you're around the average, that's what the average increase would look like. But if your home was worth $340,000 and the assessed value went to $408,000, you're going to feel it," Golden remarked, explaining that while the average residential value is assessed at $395,000 in Stoneham, lower condo values drag down that figure.
According to the Assessor, the median single-family home is currently worth about $424,000 in town. Commercial properties, which are similarly dragged up by large-scale businesses such as the Redstone Shopping Plaza, are worth an average $997,000. However, Golden explained that the mom-and-pop type businesses common throughout the town are worth significantly less than that figure.
According to the Selectmen, who could have raised the shift for commercial rates by an additional two-percent, their biggest concern was ensuring that both types of property owners shouldered an equitable amount of the tax burden.
"Even with the shift last year, the residential properties were taking a huge hit," said Selectman Cosmo Ciccarello, referring to the fact that the average residential tax bill rose by $150 last year, while property owners saw an overall decrease despite a 25-percent increase in the rate burden. "You're board feels very strongly that the 160 percent is fair to both the commercial and residential?"
Answering in the affirmative, Board of Assessors member Richard Mangerian argued that the town shouldn't hit commercial properties and business owners too hard. According to the elected official, even by increasing the commercial shift by an additional 2 percent, the Selectmen risked hindering the redevelopment of Stoneham's business community.
"We need to look at the economic aspect of the tax besides just the numbers out there. We just don't want to overwhelm them. And that has to be a major consideration. If you saw Stoneham Square 25-years-ago, it was a place to make a movie [set] in the 1930's," Mangerian said.
"Now you're seeing some accelerated growth, which will influence other entrepreneurs. The marketplace is now in Stoneham square."
The Board of Selectmen also rejected a residential tax break and a small business tax break in two unanimous votes.
According to Golden, the residential exemption would typically not benefit the average Stoneham citizen, as the 10 percent break would only benefit those at or below the $395,000 median home value. Those residences worth more than that average, such as the median single-family homeowner, would in turn pay more in taxes to make up from the dollars lost through the exemption.
"When you get down to it, who it really benefits are your condo owners," Golden said in arguing against the exemption, explaining that single-family homes were on average worth $424,000.
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