>>Valley Patriot>>
|
Your
Property Taxes in Methuen
Methuen City Council
President, Billy Manzi
 With
Methuen’s City Council prepared to set a “tax
rate” at the December 6th meeting, it was an
opportune time to discuss the process, tax
classification, and general budgetary matters.
While the Mayor’s recommendations were not yet
available at press time, Methuen’s budget does call
for an increase in the “tax levy”, and some
press reports have taken that “tax levy” number
and attempted to correlate it to what the average
residential homeowner may be faced with in the way of an
increase. However, until such time as the City Council
makes a decision on tax classification, and the assessor
submits property values, such an attempt to make this
correlation is likely to be flawed.
The “tax levy” is simply the amount of revenue
that the municipal budget antic-ipates raising from the
property tax. Since a balanced municipal budget is
mandated by law, and since the tax levy revenue estimate
contributes to that balance at the beginning of the
fiscal year, any attempt to lower the “tax
levy” at the time of the setting of the tax rate
would create a deficit. Consequently, absent additional
revenues or a decrease in expenses, the City Council is
bound by law to raise sufficient revenue through the levy
to balance the budget.
As the City Council prepares to adopt such a tax rate it
must also consider the potential for a shift in the
burden from residential homeowners to commercial
taxpayers. Such a shift is allowed under so-called
“classification”.
Classification allows a greater share of the overall tax
burden to be borne by business, thereby shielding the
residential homeowners from some level of property tax
increases. While the concept may appear to be unfair to
business, property values play a role in such a
determination.
As an example, Methuen has recently seen a decrease in
property values asso-ciated with business, while
residential values have risen dramatically. Under
conditions where all such property is treated equally,
the end result could be a decrease in overall property
taxes for business, and a corres-ponding increase for
residential home-owners.
Classification helps us to smooth out those potential
inequities. We re-main cognizant in Methuen of the need
to continue to attract business, and on that basis we
have tried to strike a delicate balance on
classification. Methuen has a solid record with regard to
attracting business, and our tax policies will continue
to promote business expansion that helps to lower our
residential tax burden.
As we move to set the tax rate that determines your
residential bill, the values established by the assessor
are critical. How you are treated on an individual basis
is determined by the value set on your property by the
assessor, who is mandated by state requirement to assess
at 100% of value. Since each property has the potential
for unique characteristics, it is never possible to truly
say what each individual homeowner may face in the way of
property tax, even in a situation where the tax levy
remains constant.
Without question, such uncertainty is a flaw in the
property tax system.
While setting a property tax rate is not rocket science,
there are several layers of thought involved and key
political decisions that need to be made. As we move
forward in Methuen, I am proud to say that even with the
building of three new schools, and the investment in a
brand new library we have never faced an override of
Proposition 2½ or a debt exclusion for these capital
projects. We should remain a couple of million dollars
below the Prop 2 ½ levy limit, which is a testament to
sound financial practices by the City.
Despite the fact that our tax burden compares favorably
with other municipalities, the property tax imposes what
I consider to be an unfair burden on the elderly and
fixed-income residents generally.
The essential unfairness of the property tax (not a tax
based on ability to pay) has led some to call for real
tax reform, with some portion of the existing municipal
cost structure (such as education) being shifted to a
broader-based tax. Education reform in Massachusetts was
designed, at least in part, to lessen the reliance on the
property tax for local educational expenses. Is it now
time to take that concept to the next level? Food for
thought, and maybe the subject for a future column.
Happy Holidays to all!
*Send your comments to ValleyPatriot@aol.com
The Valley Patriot is a Monthly
Publication. We publish 6,000
newspapers and distribute in Andover, North Andover,
Methuen and Lawrence.
To download this month's edition click here (December Edition)
|
Prior Columns by Billy Manzi
|
