Town Crier

TEWKSBURY — The Tewksbury Select Board met on Nov. 30, 2021 for the annual tax rate hearing. Chief Assessor Joanne Fo­ley and Town Account­ant Al Rego gave a presentation to the board to ex­plain the property tax levy for FY2022 and select the Mi­nimum Residential Fac­tor.

The purpose of the hearing is to allocate the local property tax levy among five property clas­ses for fiscal year 2022, as well as sel­ect a minimum residential factor, address residential and small commercial ex­emptions, and address a discount of up to 25 percent for open space property.

She further explained that a residential exemption would shift the tax burden from lower valued properties to higher valued properties and to those owned by nonresidents, and noted that the board has historically vo­ted against this; furthermore, a small commercial exemption would lower the taxes on parcels occupied by small businesses and would shift those taxes to other commercial and industrial taxpayers, and again, the board has historically vo­ted against this.

A discount up to 25 percent for property classified as open space would shift the tax burden to the residential class; currently there is no land with a tax classification for open space in Tewks­bury, and the board has historically not granted this discount.

Property in town is divided into five classes: residential, open space, commercial, industrial, and per­sonal property.

Foley explained that her office processed 884 deeds last year, and determined the valuation of properties to set the tax rate by analyzing mar­ket sales data and making market ad­justments to the properties. The state Department of Rev­enue then reviews sales data, values and counts, and property adjustments. During calendar year 2020, there were 266 single family home sales in town, 133 condominium sales in town, and 16 commercial/industrial sales.

From fiscal year 2020 to fiscal year 2021, the percent value of the average single-family home increased by five percent for a tax change of 3.3 percent; the average condominium value increas­ed by 1.1 percent for a tax change of -0.5 percent; and the average commercial val­ue increased by 0.8 percent for a tax change of -0.6 percent.

Foley also discussed the FY22 levy limit. The levy starts with the FY21 levy and adds 2.5 percent under 1980’s Proposition 2 1/2, FY22 new growth, and a debt exclusion, adding up to a total of $100,826,681 for the FY22 levy. The calculated single tax rate with no shift comes to $17.14 for both residential and commercial [author’s note: The calculated single tax rate with no shift for FY21 was $17.69].

Town Manager Richard Montuori recommended a 1.59 (0.8870 Minimum Resi­dential Factor) shift be­tween residential and commercial properties. The 1.59 shift in 2022 would lead to 25.56 percent of the tax burden coming from commercial taxes, whereas no shift would lead to 16.08 percent of the taxes being paid by commercial properties. Ac­counting for in­creases in home values, the average single-family home would pay $282 more, the average residential con­do would pay $121 more, the average commercial property would decrease by $75, and the average in­dustrial property would in­crease by $1,011.

Foley said that while she usually combines the com­mercial and industrial ca­tegories, the pandemic cau­sed commercial values to drop and industrial values to rise. Foley stressed that the numbers are based on averages, and every pro­perty’s taxes will increase or decrease according to as­sessed value.

Foley explained that when deciding on a shift recommendation, she and Mon­tuori took into consideration not just this year but next year as well.

“It is predicted that the trend of the residential val­ue increases will heavily outweigh that of commercial properties,” she said, adding that in comparison to other local towns’ average single family home tax rate, Tewks­bury is “still in the middle of the pack.”

Resident Bruce Shick ask­ed the board members and town staff to look at options to incentivize the preservation of open space through a tax exemption. Resident Bob O’Brien ask­ed why the town budget and tax rate are set at different times throughout the year.

“How can we approve as a town what the budget is for next year when we don’t have a base yet for the tax structure?”

Montuori explained that the state requires towns to have a budget approved by July 1 — most towns do this at Town Meeting in April or May. However, the tax rate cannot be set until town values are updated and ap­prov­ed by the state Depart­ment of Revenue, a process that isn’t completed until Sep­tember or later.

Montuori said that when he and town department heads present a budget to the community, they in­clude the best possible estimate of tax im­pacts.

O’Brien asked how the town could shift tax burden off residents and small bu­sinesses, and onto larger commercial entities and “non-residential apartment buildings,” adding that he felt that costs from apartment complexes are being passed onto “the local resident” and should get a different rate.

Montuori said that the decision made by the board is to shift the tax burden between residents and commercial, but that the burden can’t be different between small businesses and large businesses — “it’s all commercial or no commercial.”

He added that the state also doesn’t allow for apartments to be categorized as commercial, only residential. O’Brien asked about why the town was not utilizing a small commercial exemption, which the Sel­ect Board has usually voted against.

Foley explained that to qualify for the exemption, a business must employ an annual average of no more than 10 people, have an as­sessed valuation of un­der $1 million, and own the pro­perty to receive the be­ne­fit. She added that many small businesses lease, and property values along Route 38 tend to be high.

Montuori said that “when you give an exemption in one area, it does shift the cost” to other groups.

“It’s a balancing act,” ad­ded chair Jay Kelly.

Member James Mackey said that he felt the shift made sense because it didn’t put too much of a burden on any one group. Mem­ber Todd Johnson reminded residents that the tax levy in­cludes debt exclusion for projects including a new elementary school and new fire station.

“That’s about quality of life” he said, citing choices made at the ballot box and at Town Meeting by residents. “We have all supported those things... you can’t support those and then come here tonight and look at this picture and regret this purchase... our community, in my opinion, is better for those choices... we can’t pick and choose when to think [the impact] is good and when it’s bad... we tend to be selective in our memory.”

Member Jayne Wellman said that the board should look at options at the state level to help offset costs for financially fragile seniors on fixed incomes. Foley said that there are several op­tions for state exemptions for at-risk groups and invited seniors and disabled veterans to call her office at (978) 640-4330.

The board voted 4-1 for a 0.8870 MRF, with Jay Kelly dissenting. The board de­clined to ad­opt a residential exception (which shifts the tax burden from lower value properties to higher value or nonresident properties) or a small commercial ex­emp­tion (which shifts the tax burden away from parcels occupied by small businesses to other commercial and industrial par­cels). The board de­clined to allow a discount of up to 25 percent for pro­perty classified as open space, as there is no qualifying open space in town.

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