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Lower Rates but Higher Taxes Thanks to Home Values

November 26, 2018

BILLERICA -- Officials say the “white hot” housing market is to blame for increases residents will see in their next property tax bill.

According to Chief Assessor Richard Scanlon, the owner of a median-priced home in Billerica -- now about $379,000 -- should expect to pay $213 more in property taxes than last year following a unanimous tax classification vote Monday by the Board of Selectmen.

This is true even as both the residential and business tax rates decrease -- respectively about 71 cents per $1,000 of valuation and $2.24 per $1,000 dollars of valuation.

These seemingly conflicting trends are possible due to an uneven increase in property valuation for residential and commercial parcels.

According to Scanlon, the town’s residential property increased from $4.7 billion of total valuation last year to $5.2 billion this year. He said roughly a 10th of this increased value came from new growth, but the majority is due to increased property value. The assessed value of a median home in Billerica increased $34,000 in the past year.

Meanwhile, the total property value of businesses also increased, but at a more modest rate, totaling $1.6 billion last year and $1.7 billion this year.

Billerica has a split property tax rate with businesses paying a higher rate than residents. However, most of the properties in the town are residential.

Selectmen voted Monday to keep a 75 percent residential factor in the town, the highest shift of taxes away from residents and toward businesses allowed by the state, Scanlon said.

He recommended maintaining this shift citing the benefits of consistency, the taxes levied for the high school project and the 8- to 10-percent property value increase.

Town Manager John Curran said the tax levy increased by 1.95 percent this fiscal year, short of the state’s 2.5 percent cap.

“We are leaving $16.5 million in fiscal year 2019 that we will not tax that we could tax,” said Board of Selectman Chair Kim Conway. She thanked Curran and Scanlon for their work.

According to Curran, if property value was static, this 1.95 percent levy increase would have resulted in about a $95 increase in the tax bill for an owner of a median-priced home. Increased property value is responsible for the remainder of the expected $213 increase, he said.

Several selectmen said the increase for the owner of a median-priced home was initially expected to be closer to $400. According to Curran, the town worked to reduce this amount, offsetting about $1.7 million of this sum with expected increased receipts for water, sewer and ambulance services. The motor vehicle excise tax was also bumped up with receipts expected to increase by $400,000 this year, he said.

“We were really combating the shift of residential values by trying to lower the levy,” Curran said.

The levied amount will go up $2.4 million this year, less than the $8 million last year and about $5 million in previous years, he said. Last year’s spike was due to the construction of the new high school and the local introduction of the Community Preservation Act, according to Curran.

Scanlon said property taxes in Billerica fall slightly above the middle of the list when compared to other communities statewide.

“We’re not in the top 10 of taxes in the state,” he said. “We’re not even close.”

Chelmsford, which is mulling moving to a split tax rate, expects the average tax bill to increase $265 from last year if it maintains a single tax rate.

Conway asked about the impact of taxes on under-used industrial space. Scanlon said Technology Park, which has a fifty percent vacancy rate, has not held its value, unlike other areas in the town.

“In the last two years, we’ve probably lost a half million in taxes out there,” he said.

Technology Park was the location of a proposed mixed-use district narrowly rejected at Fall Town Meeting.

The only resident who spoke at the meeting requested the board consider exemptions for low-income residents. Scanlon said, while few communities across the state have property tax exemptions, the town of Billerica does offer assistance programs for select groups, like seniors and disabled veterans.

Dan Burns, a former selectmen who plans to run again for a seat this spring, issued a press release following the Monday vote, blasting officials for the tax increase.

“I am alarming that tax increases have exploded, and the Board of Selectmen has returned to the type of behaviors that I had originally run against,” he wrote.

Follow Elizabeth Dobbins on Twitter @ElizDobbins

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