Property tax hike will average $130 per household
Published on December 5th, 2007
STONEHAM, MA - The town's Board of Selectmen endorsed a 46 cent hike in residential tax rates last Wednesday, a move that will lead to an approximate $130 jump in tax bills for the average single family homeowner.
During a public hearing last week, the Selectmen accepted the recommendation of Town Assessor Brian MacDonald that Stoneham maintain the current percentage split of the tax levy being paid by businesses and homeowners.
Local residents will now pay $10.20 per $1,000 of valuation on their homes, up from $9.74 cents the year prior. Local business owners will also see a 56 cent hike in commercial tax rates to $17.74 per $1,000 of valuation on their properties.
Based upon rates established last week, business owners will pay a rate that's 1.7 times higher than the costs established for residential homes.
"The reason this recommendation was made was to maintain the present tax levy share between all [property classifications]," said MacDonald, explaining that commercial properties bear roughly 82 percent of the levy burden.
Because the town has a dual tax rate, the Selectmen have opted in previous years to shift a greater percentage of the levy burden on commercial property owners. The intent behind that action was to reduce significant increases in year to year tax bills for local residents.
However, that trend occurred during a boom in the housing market that simultaneously matched a slump in commercial property values.
As a result, there were a few years where residents still saw a significant increase in annual tax bills due to soaring housing values, despite attempts to load a greater burden of the levy on business owners.
At the same time, as the tax rates shifted so that commercial properties were assessed a larger proportion of the levy, local business owners at times actually saw a drop in their tax bills from the year prior due to sagging commercial land values.
According to MacDonald, with a crashing housing market, that trend is all but over, as home values were dropping - in Stoneham from $431,000 to $424,000 for the average residence in the past year - while commercial properties just slightly gained in value.
Residential values were established by the Assessor's office by tracking home sales in 2006.
"The implications of that are as such: There will always be a lapse between what may be the current market value and the assessed value," MacDonald explained. "In the past few years, we have seen some slow down in the residential markets."
"In years such as between 2000 and 2005, we were looking at an appreciation [in homes] of above 2.5 percent," the assessor added, referring to restrictions that prevent municipalities from raising the tax levy above a 2.5 percent cap. "In a year such as this, where we've seen an increase [in values] less than 2.5 percent, we may see an increase in tax rates to compensate for the loss in the total appraisal rate of the community."
According to MacDonald, Stoneham's total value depreciated by approximately 1.4 percent in the past year. In addition, the town saw decreased tax revenues from new growth in the community.
During the last fiscal year, new growth was calculated to account for $309,000 worth of new tax revenues, compared to $375,000 a year prior.
For he coming fiscal year, MacDonald is predicting that Stoneham will face another drop in tax revenues, likely between $25,000 to $50,000, from new development.
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