Southborough is going to try something a bit different with property taxes this year. For what I believe is the first time ever (someone correct me if I’m wrong), selectmen last night set two tax rates — one for residential properties and a second higher rate for commercial properties.
Selectman John Rooney said the split tax rate is an attempt to minimize the impact of rising property taxes on residents. “Taxes are going to increase this year and next year, and here’s a way to slow it down by shifting the allocation to commercial properties,” he said. “This seems like an opportunity to at least put the brakes on it a little bit.”
What it means for residents is that the tax rate in fiscal year 2011 will increase from $14.06 to $15.38, and the average annual tax bill for a single family home will increase by $128. The exact savings you’ll see is determined by the valuation of your home. Principal Assessor Paul Cibelli said homes in Southborough have decreased in value by an average of 7%.
If selectmen had opted for a single tax rate for both residential and commercial properties, the rate would have been $15.58. That would have translated to an average tax bill increase of $230 per family.
The commercial tax rate for fiscal year 2011 will be $16.36. On average, businesses in town will pay an additional $125 per month under the new rate.
“At end of the day, we have an opportunity here to provide residents with a savings and in doing so businesses will incur an additional expense, but I don’t think it’s an onerous expense,” Rooney said.
The vote to approve a split tax rate was not unanimous. Selectmen Rooney and Bonnie Phaneuf voted in favor of the two rates, while Selectman Bill Boland opposed the move citing concerns about the impact on small businesses.
“We don’t have big box retailers, we don’t have huge manufacturing. If we attract some of those, I would certainly consider (a split tax rate),” Boland said. “Businesses aren’t getting more of a break than residents. In general businesses use less services.”
“Southborough is made up of a lot of small businesses. Many of them are having great difficulty,” Cibelli told the board. “They’re hurting just as much as residents, if not more.”
Cibelli told the board that commercial and industrial properties account for about 6% of the taxable parcels in town, but they contribute 20% of the tax revenue.
At town meeting last April, voters opted to use $417K from the town’s stabilization fund to offset the town’s operational budget. Cibelli said without that money, the tax rate would have been about $0.20 higher this year, but he cautioned that using one-time money to fund the budget is a temporary fix. “Eventually that’s going to catch up with us,” he told selectmen.
“I wish more people would come and participate in town meeting because some things might change,” Boland said. “We can’t maintain the services without increases. That’s the fundamental question to the citizens.”