Tuesday, September 7, 2010

What am I missing?

Interesting read in the Daily News today about property tax bills in Port growing at a slower pace than in other area communities.

Over the past five years, the average homeowner's property tax bill rose by the smallest percentage increase of all of the communities in the Greater Newburyport area.
From 2005 to 2010, the average Newburyport tax bill grew by 16.7 percent, which is significantly less than the state average of 22.4 percent. The state Department of Revenue also ranks communities by the size of their average tax bill, and that ranking also provided some good news for the city's taxpayers. Newburyport slipped from the 61st highest tax bills in 2005 to the 69th highest in 2010.
But am I wrong in thinking the article gives false credit to former Mayor Moak's "philisophy of creating a tight budget" for the past four years or current Mayor Donna Holaday's work as chairperson of the council's budget and finance subcommittee?

Simply put, I think the credit goes to falling house prices.

I mean seriously. Tax bills are calculated by multiplying our tax rate to the assessed value of property in town. If the value of that property declines, tax bills should go down or remain steady if the drop is close to the 2.5% hike communities are allowed to implement each year. Likewise, if the rate of the increase in value slow, tax bills will grow at a smaller clip.

As far as I know, the city has afforded itself the opportunity to increase our tax levy (the total amount of taxable dollars) by 2.5%, as allowed under Prop 2 1/2. I don't recall Mayors Moak or Holaday leaving any money on the table, nor should they.

Also, Mayor Moak supported one override and one debt exclusions. The former, a permanent raising of the 2.5% cap, got trounced. The latter, which would have temporarily lifted the 2.5% cap, nearly passed. (Earlier this year, Mayor Holaday suggested she might have to consider an override as well, but nothing ever came of it.)

Anyway, this post isn't to criticize either mayor, but I don't think they deserve the credit. I believe the "kudos" should go toward a sagging economy, which severely dented our real estate market, and the voters rejection of the two override questions. (I voted for both, btw.)

Postscript: The Masked Preservationist, who has been the only consistent blogger in town, has a different take on this.



2 comments:

Dick Monahan said...

I think you'll find that the Port tax increase is 2.5% compounded. In other words, the maximum allowed. It's lower than others because we haven't voted for any overrides.

BTW, the general rise or fall in house values shouldn't matter. The tax RATE is determined by dividing the total number to be raised by the total assessed value. If house values go down, the tax rate should go up, so the total raised is the same (plus 2.5%).

Tom Salemi said...

I didn't realize other towns had passed overrides recently. Or perhaps these are historical overrides (or debt exclusions.)

You're right about the values. I woke up this morning knowing I'd flubbed something. Home values wouldn't enter into the equation until the three-year reval, which hasn't been completed yet.

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