Wednesday, December 2, 2009

Live reporting - Tax Classification hearing

F. HEARINGS  -        Annual Tax Classification Hearing – 7:10 PM

DeBaggis, Norman, Doyle, Feeley

Tax rate increase from 11.17 to 12.03%

When property values go down, why does the rate still go up?
Basically, the Town takes the prior tax levy and adds 2.5%, including the new growth and debt exclusions results in the total new tax levy for the Town budget.

How is the value of my house not reflected in the assessment?

Dealing with the 2008 calendar year data for this cycle. 2009 is not complete as we are only in December, so the State mandates use of the prior full year data. There is a lag in the data used.

Assessments will go online in the next couple of days and should be available on the Town Assessors website.

Q - Powderly - If we are constrained by prop 2.5% why is my bill going up more than 2.5%
A - the Prop 2.5 is applied at the Town tax levy and not at the individual residence level.

Q - Zollo - How come you don't get good assessments for commercial/industrial properties? I have heard that there is the lag effect and lack of comparable data points.

A - Those are comments I have heard about 3-4 years ago. I don't think there is an inequity now. 

Q - Most citizens believe that the assessed values are close to fair market value, but there are commercial properties where there might be some differences.
A - Residential is assessed at the fair market value so it is easy to compare. Commercial property is assessed on a number of factors (cost, market, industry) only one of which is the fair market value. The full valuation process is determined by the State. There may be a perception or feeling that we might have missed something but the values have to be qualified.

Q - I am hearing these frequently. The most important thing we can do is to fight to change the perception.

Nutting - I want to reinforce Assessor Feeley's point on the commercial process being an apples to oranges approach compared to the residential process. The assessors follow all the rules and regulations and then the State validates the numbers. Could one property be out of whack, it is possible.

Q - Whalen - a theoretical example to help get to the point that Councilor Zollo is making. 
A - on that, for the benefit of the public, it is the rent and not the business entity that is the difference.

Q - How do we compare in assessment valuation dropping?
A - The jury is still out as other communities are going through the same process now.
Franklin has shown a less significant decline in residential valuation based upon the housing sales over the last 18 months.

Q - Last time you didn't want to make a recommendation on split vs. single?
A - We are not in the position to do so, our role is to provide the data.

Q - Have there been recommendations for split tax before?
A - No

Debaggis - Continue with the single tax rate as the school portion of the budget as the commercial/industrial does not benefit from the major portion of the budget.

Feeley - I concur with Mr DeBaggis for his point and I'd add two more. With the 80/20 split that we have, the commercial industrial contribute about $10M of the $50 million. The Police and Fire depts budgets along are close to this amount. Third, the split tax rate is not good for business especially when you consider the small businesses.

Whalen - Based upon the analysis I have done, Franklin has a lower single tax rate than most communities with split tax rates.

Mason - mentioned that Attleboro just passed their tax rate which is split and provided a lower rate to businesses to stem the loss of 107 businesses over the past year.

I spoke up about the single vs split is not the issue, we need to grow the pie. The economic development efforts of the community to grow the tax levy as sustain the level of services we want.

Zollo -

Powderly - I would like the argument articulated in a single pager for citizens to reference.

Motion to close the hearing
Approved - 8-0

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