Last night, the Select Board unanimously supported the recommendation of the Board of Assessors to set a single property tax rate for FY22.
It’s hardly a surprise, since as Assessor Paul Cibelli noted, the Town has never had a split rate. Still, it is worth noting that while the impact will be higher than projected last spring, it’s also lower than was stated earlier this month.
The tax rate is increasing from $16.21 to $16.28 per $1,000 of assessed property value. That’s a 0.43% increase to the rate.
The impact will vary depending on the most recent assessed value of your property. Given the hikes in assessed home values, the average increase for a single family home owner is 4.89%, or $523. (That’s in addition to the average Community Preservation Act surcharge of $96.05.)
The increase is lower than the 5.43% preliminary figure discussed at the November 3rd meeting. But it’s higher than the 3.19% residents were told to expect when they voted on budgets in May.
Meanwhile CIP (Commercial, Industrial and Personal) property owners will only see an average $279 or 0.55% increase.
Assessor Paul Cibelli told the Board that New Growth tax dollars were down by 20.33%. He said it was the 2nd year of a decline and first time it has been lower than the 10 year average.
Cibelli’s presentation covered some of the same ground as his November 3rd discussion with the Board. He spoke about the burden shift caused by a contrasting hike in residential values and decline in CIP assessments.
So, given that shift, why not a split rate?
The Board of Assessor’s recommendation was partially based on the impact of Covid on the economy. Cibelli stated that businesses are still struggling and the ongoing impact of the pandemic on businesses remains unclear. He asserted that it wasn’t the right time to add a larger tax burden. His presentation also noted that Southborough businesses are mostly small businesses.
Other reasons echoed presentations from past years. The BOA believes that attracting new businesses to Southborough is important to providing “new tax dollars with little impact on costly town services”. They argue that a split rate would undermine that effort.
Since CIP is a small portion of tax property values, Cibelli stated that changing to a split rate “would only produce a small savings” to residents while “making Southborough a less attractive place to conduct business”.
Following the presentation, Select Board Member Sam Stivers said that the most recent data he’d seen didn’t support the hypothesis that split rates interfere with attracting and growing business in towns. He was interested in considering a split rate, as he had floated in the past, but acknowledged there was generally little support for it.
Member Andrew Dennington said he would be interested in looking at the data Stivers referred to, but not for this year. He opined that this would be a uniquely bad time to reconsider. He followed that changing long standing policy without public warning wasn’t the right approach.
Chair Lisa Braccio said she had some of the same concerns as Stivers. But referring to a map in Cibelli’s presentation, she noted that most areas with split rates are larger cities like Framingham and those in the 128 belt. She furthered that most split rate communities offer sewer, something that Southborough doesn’t.
In the presentation, Cibelli presented one split tax rate scenario for comparison, a “5% Split Tax Rate”. The 5% increase to CIP bills would cost businesses an average of $559 more while saving average home owners $131.
Vice Chair Chelsea Malinowski indicated that was the data that cemented her support for a single rate. She had wanted to see how a split rate would help ease the resident tax burden. She didn’t see enough of a swing for individual households to be in favor it.
At the BOA’s recommendation, the Board also rejected exemptions for residents and small commercial. Cibelli described them as not relevant to our community. The residential exemption is largely used in places with a large number of seasonal properties or rental units. Adopting a small commercial exemption would lead to a required increase in the overall CIP rate.
During the board’s discussion, Stivers brought up another form of tax mitigation he was interested in. Referring to their November 3rd discussions, he again suggested using federal ARPA funds to lower residents’ increase to under or close to 4%. As he expected, no one else voiced support for revisiting the idea.
The Board invited public comment prior to their vote, but no one used the opportunity.