Commercial tax rate goes up
Published on November 29th, 2006
STONEHAM, MA - The town's Board of Selectmen authorized the Assessor's office to increase the tax burden on commercial property owners by three-percent last Tuesday.
According to Assessor's Director Frank Golden, by increasing the burden to local businesses from its current 160 percent to 163 percent rate, the average Stoneham homeowner can expect a $102 jump in tax bills this year. By contrast, the average commercial property will see a $504 jump in taxes over the amount paid last year.
Essentially, the commercial/residential shift refers back to the town's dual tax rate, which means that homeowners pay a lower tax rate, $9.74 per $1,000 in value of a dwelling, than business proprietors, who would now pay $17.16 per $1,000 in value of a property.
The three percent increase means that businesses will be assessed a tax rate that is 1.63 times higher than the figure established for residential homes.
"It's important to understand that the Town of Stoneham has the ability to shift the burden from the residential to the commercial and industrial [sectors]," Golden explained, adding that the maximum allowable increase would be to almost 165 percent.
According to Selectman Tony Kennedy and Paul Rotondi, while they understood the Board of Assessor's intent in proposing to raise the commercial tax burden, the two worried that local businesses were perhaps getting hit too hard.
Pitching a different suggestion, the pair advocated for keeping the current FY06 160 percent shift for a year in order to give the town's struggling commercial community a break.
Although Kennedy would later relent and agree to the Board of Assessor's recommendation, Rotondi, the lone dissenter in the subsequent 4-1 vote, refused to budge, contending that the increase was hypocritical given town officials' insistence that they need to attract more businesses.
Comparing the differences between the 160 and 163 percent shifts, the first-term Selectman pointed out that residential homeowners would pay $4,215 with the current rate, compared to an average $4198 if Golden's recommendation was accepted.
That $17 difference, meaning that the average resident would see a total $119 jump in annual taxes over last year, was insignificant compared to the $319 tax bill savings commercial property owners would realize if the 160 percent split remained, Rotondi argued.
"My concern is we want to bring in more businesses. We want to fix-up Main Street. And I think you're sending the wrong message for a $17 savings," the former School Committee member commented.
"If we don't start attracting more businesses into the community, and building a tax base, we don't have a chance of providing residents some long-term tax relief," the Selectman furthered.
Disagreeing with Rotondi, Selectman George Seibold countered that unlike businesses, residential property owners have recently been hamstrung with new charges, such as trash and athletic fees.
According to Seibold, if the town continued to hit homeowners in this manner, there would be no point in trying to attract businesses to the community.
"I see a lot of 'For Sale' signs out there. If we keep on losing residents, what business is going to want to come to a ghost town?" Seibold contended.
"Business will do business," added Selectmen Vice-Chair John DePinto in agreement. "If the town is worth doing business in, then they'll stay. A business can absorb this manner of increase much more easily [than homeowners]."
However, according to Stoneham Chamber of Commerce Executive Director Sharon Iovanni, who pointed out that the business group had not taken a formal stance on the proposed tax burden shift, local commercial property owners were very much feeling the financial squeeze.
Specifically, Iovanni pointed to new costs for small business owners, such as state-mandated health insurance contributions for workers. According to the Stoneham resident, the town's citizens had repeatedly committed to keeping the community largely residential in nature, and had a responsibility for shouldering the burden of that choice.
"I would suggest you go around and take a look at the number of businesses that have closed this year and the number of vacant buildings in town," the business community representative unsuccessfully argued.
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