[Ed note: My Southborough accepts signed letters to the editor submitted by Southborough residents. Letters may be emailed to mysouthborough@gmail.com.
The following letter is from Carl Guyer.]
To the Editor:
The complete Massachusetts Department of Revenue 2023 real estate tax data set is now available. Here is a look at Southborough’s tax rates compared to rates across the state.
For starters, Southborough’s residential tax rate is higher than the rate on 87% of the residential property in the state. At the same time our commercial/industrial rate is higher than on just 28% of the commercial/industrial property in the state. It is accurate to say Southborough has a high residential tax rate and a low commercial/industrial tax rate. Why this tax burden differential (87% vs. 28%) exists when Southborough has a single tax rate for all property owners can easily be explained.
The culprit is 80% of the commercial/industrial property in Massachusetts is subject to a split tax rate policy while Southborough persists with a single tax rate. A split rate sets the commercial/industrial property tax rates higher than the residential rate. The effect is compounded as the split rate lowers the residential tax rate on two thirds of the residential property in the state.
For the existing split rate communities the average ratio between the commercial/industrial tax rate and the residential tax rate is 1.92. To see the impact a split tax rate could have in Southborough, we apply the typical (average) ratio of 1.92 to Southborough’s 2023 tax rate of $14.76. The resultant rates would be a residential tax rate of $12.64 and a commercial/industrial rate of $24.46. This split would reduce the tax burden on the average residence by $1,603 which highlights the premium residential property owners are now paying to maintain the current single tax rate policy and associated low commercial/industrial tax rate.
Why changing Southborough’s the single rate to a split rate would make a such difference is embedded in the demographics of the town. You may be surprised to learn Southborough has a relatively high percentage of its tax base as commercial/industrial property. At 17.2%, Southborough ranks as the 93rd highest percentage within the 351 communities in the state. That places Southborough in the top one third (117) of the communities in Massachusetts, most of which have split tax rates. As the percentage of the tax base as commercial/industrial property increases so does the benefit to residential property owners.
Yes there is a benefit to having a significant commercial/industrial tax base, but only if you administer your tax policy in line with prevailing practice.
As you might expect, a split tax rate would better balance the financial burden between Southborough’s residential and commercial/industrial properties. In the example above, Southborough residents would pay a tax rate higher than on 66% of the residential property in the state while our commercial/industrial property owners would pay a tax rate higher than on 59% of the commercial/industrial property in the state. As a 66% vs. 59% loading, there is a slight advantage for our commercial/industrial property owners, but a much better balance than the current 87% vs. 28% loading described at the start of this article.
What can be done? Massachusetts’ state laws set parameters on how much a community can modify the residential to commercial/industrial tax rate ratio from year to year. If we start now it will take 10 years for Southborough to reasonably bring our real estate tax policy into alignment. There will no sudden shift in tax rates for anyone. By law, only the Southborough’s Select Board can remedy the present situation. The Board will have to recognize the current imbalance in the tax burden now imposed on residents as uneven and expensive for residents. It won’t be easy.
Carl Guyer
146 Middle Road
[Editor’s Note: Mr. Guyer also provided a spreadsheet to share. For a pdf version, click links for the following “tabs”: ANALYSIS, ASSESSMENTS, TAX FRATES, and Sort by % CIP. For the original excel version, click here.
This is the 6th letter Mr. Guyer has written on this topic in the past 10 years. You can read more on the Split Tax Rate debate here.]
Yet again. Carl Guyer has the sheer nerve to state the obvious TRUTH.
It is high time we changed to a split tax rate. This will give residents a deserving tax break, while bringing commercial into fair alignment with surrounding towns.
It will NOT cause an exodus of commercial. That is a convenient MYTH repeated endlessly by sel-interests.
It is like the elephant in the room.
Keep it up Carl. You have the facts on your side. It is politics keeping you from succeeding. I hope you run for a seat on the Selectboard.