Franklin Matters: Annual Tax Rate Hearing for FY 2025

Wednesday, November 20, 2024

Annual Tax Rate Hearing for FY 2025 - Charts Updated

The Annual Tax Rate Hearing for FY 2025 is on the Town Council agenda Wednesday, Nov 20. There will be a public hearing before the Council votes to set the rate. A couple of helpful charts have been updated in advance of the hearing.

The key decision at the tax rate hearing is to maintain the single tax rate or move to a split tax rate. The Board of Assessors memo to the Council lays out the argument distinctly:

"A single tax rate means that all property classes (residential, commercial, industrial and personal) are taxed at the same tax rate. A dual tax rate means the commercial-industrial-personal tax rate is increased while the residential rate is decreased. In other words, some of the residential tax burden is shifted towards commercial, industrial and personal properties.

Please note that a dual tax rate does not produce more tax revenue, it simply shifts the burden." (Bold added for emphasis)

Franklin has historically had an approximate 80-20 split between residential and commercial/industrial as shown in the following chart.

approximate 80-20 split between residential and commercial/industrial

As the assessed valuation increases over time, the tax rate will drop. As the valuation decreases, the tax rate will increase. The tax rate is a good talking point but is simply the result of math driven by the assessed values and the amount to be raised to meet the budget.

assessed valuation and the tax rate have an inverse relationship

The rate means little to the average home owner. Whether the rate goes up or down, it is more important to know what the valuation of the residence is. The chart will show that over time, the tax rate can go up or down but the average tax bill will continue to increase due to the automatic 2.5% increase voted by the Council.