Showing posts with label DOR. Show all posts
Showing posts with label DOR. Show all posts

Wednesday, January 25, 2023

Consensus on the MA revenue forecast remains to be set but 2 hours of hearing updates gets it started

"TOP BUDGET OFFICIALS from the Legislature say they intend to abide by the will of the voters and make sure all revenue from the new millionaire tax goes to “new initiatives” in transportation and education.

Exactly what would qualify as a “new initiative” hasn’t been decided yet (is a new bus or subway car a new initiative?), nor has any decision been made on whether the money would be evenly split between education and transportation.

“That’s all to be discussed,” said Sen. Michael Rodrigues, the chair of the Senate Ways and Means Committee."
Continue reading the article

"STATE REVENUES are expected to rise slightly in the coming fiscal year, but top budget officials from the Legislature and Healey administration say it’s still unclear whether there is enough money to enact permanent tax cuts.

At the end of last year’s legislative session, former governor Charles Baker and Senate leaders wanted to press ahead with $500 million in permanent tax cuts in addition to nearly $3 billion in one-time refunds from the state’s tax cap law."
Continue reading the article

"State revenue officials said Tuesday they could collect at least $1.4 billion — and perhaps up to $1.7 billion — next fiscal year from Massachusetts’ newly enshrined tax on its wealthiest earners, kick-starting months of debate over how to steer the new injection of tax money.

The projection, offered Tuesday in a legislative hearing, marked the first official estimate state officials have provided on what they think the so-called “millionaires tax” will contribute to coffers in its first year since taking effect Jan. 1. Narrowly passed by voters on the November ballot, the measure increases the state’s 5 percent income tax rate to 9 percent on annual income exceeding $1 million."
Continue reading the article in the Boston Globe (subscription may be required)

The 2 hour hearing that generated these articles is available for video replay on your schedule

The Big 3 on budget issues: From left, Matthew Gorzkowicz, Gov. Maura Healey's secretary of administration and finance; Sen. Michael Rodrigues, chair of the Senate Ways and Means Committee; and Rep. Aaron Michlewitz, chair of the House Ways and Means Committee. (Photo by Bruce Mohl)
The Big 3 on budget issues: From left, Matthew Gorzkowicz, Gov. Maura Healey's secretary of administration and finance; Sen. Michael Rodrigues, chair of the Senate Ways and Means Committee; and Rep. Aaron Michlewitz, chair of the House Ways and Means Committee. (Photo by Bruce Mohl)

Sunday, August 25, 2019

In the News: Hopedale votes on an override Weds; DOR has Prop 2 1/2 video series

From the Milford Daily News, articles of interest for Franklin:
"Renee Polechronis walked away from her desk in the Assessor’s Office Friday morning with some paperwork.

When she returned moments later, fresh forms had been dropped off. Soon afterward, the phone rang. Before any of that, she had answered a resident’s question on senior citizen tax exemptions.

“I’m usually pretty busy on Fridays,” Polechronis, the office administrative clerk, said with a smile.

If Hopedale voters fail to pass the $430,000 tax override on Wednesday’s election ballot, residents might not have access to Polechronis’ cheerful attitude on Fridays.

Officials are asking for the money to bolster Hopedale’s operating budget, and have categorized the $430,000 as the amount needed just to keep basic services running. They aren’t yet sure where they’ll cut if voters don’t approve the override, but closing Town Hall the final day of the work week has made the list of possible partial solutions.
Residents overwhelmingly approved the override at Town Meeting this spring, but a majority vote in the townwide election is also required before the tax can be levied."

Continue reading the article online (subscription may be required)

The MA Dept of Revenue has a video series on Proposition 2 1/2 explaining overrides, debt exclusions, and other accurate info on this matter

Tuesday, November 27, 2018

What drives the tax rate? How stable is our budgeting process?

The tax rate will be voted on during Wednesday's Town Council meeting. It is expected to be set at 14.66/thousand, an increase of .01 over the tax rate for FY 2018 (14.65).

The tax rate increase is minor due to the increase in our overall property valuation and new growth. A larger pie is available to divide the levy by. When valuations go up, the rate flattens. It can also go down as shown in the 2000-2007 years. We are still in the recovery phase from the great recession that started in 2008.

Franklin, MA - Net Change in Valuation (Million) vs. Tax Rate (Percent)
Franklin, MA - Net Change in Valuation (Million) vs. Tax Rate (Percent)

How stable is our budgeting process can be shown in the slight variation of our free cash as a percent of total budget. Free cash is neither free nor cash. It arises from two budget factors: (1) when revenues to the town exceed that forecast and (2) when expenses budgeted are less than forecast. Both of these amounts add up to what is called 'free cash'.

Certified Free Cash as Percent of Franklin, MA Budget
Certified Free Cash as Percent of Franklin, MA Budget

Both charts were created from Town of Franklin Board of Assessors data combined with MA Dept of Revenue, Division of Local Services data. The Division of Local Services has a variety of data and reporting available

The Town Council agenda can be found on the Town of Franklin page

Specifically the tax rate info can be found here

Tuesday, January 27, 2015

"Get a head start by organizing your financial documents"

From the MA.GOV blog, they share some of the links to the common MA personal income tax forms. Yes, now that we are in 2015, April 15 (tax deadline) is approaching daily. While the Super Bowl comes first, and spring training is around the corner, we are in 'tax season.'
Tax season is upon us, and that can mean stress for Massachusetts residents and workers who don’t have the documents they need to file returns and payments by the April 15, 2015 deadline. 
While the Department of Revenue (DOR) encourages online filing of Massachusetts state income taxes withWebFile for Income, you can make filing a paper return as easy as possible by having the right forms and information at your fingertips.  

image shared from MA.GOV page on tax season
WebFile for Income is only available to full-year residentsPart-year residents and non-residents can file electronically using commercial software or a professional tax preparer.
Continue to the MA.GOV site to find the link to the common forms

Saturday, November 22, 2014

City & Town - November 20th, 2014

The formatting of the newsletter gets 'funky' in places but the section on "Post-Great Recession General Fund Spending" is worth reviewing.

City &Town - November 20th, 2014
Local Officials Directory
City & Town is published by the Massachusetts Department of Revenue's Division of Local Services (DLS) and is designed to address matters of interest to local officials.

Editor: Dan Bertrand

Editorial Board: Joe McDermott, Robert Bliss, Zack Blake, Tony Rassias, Tom Dawley, Linda Bradley and Patricia Hunt
In this Issue:
Welcome, Joe McDermott
Division of Local Services

The Division of Local Services would like to welcome Joe McDermott as its interim Deputy Commissioner of Local Services and Director of Municipal Affairs.

Joe has been with the Department of Revenue for 29 years, holding a number of critical leadership positions in several divisions including Taxpayer Advocate, the Collections Bureau and the Problem Resolution Office. He most recently served as Deputy Commissioner of Audit.

Joe also has a deep local government background and currently serves as Vice Chair of the Town of Walpole's Finance Committee. He also previously held positions on the town's zoning board and as an elected town meeting member. We welcome Joe aboard and wish him all the best going forward.

Local Aid Impacts of 9C Reductions

Using his authority under MGL c. 29, s. 9C, Governor Patrick has reduced various state appropriations to executive department agencies, including some minor reductions to cherry sheet appropriations. The Division of Local Services has reviewed these reductions and concluded that they will not impact previous cherry sheet estimates materially given the magnitude of the reductions and the normal variation in some of these accounts during the course of the year. Therefore, DLS will not be revising cherry sheet estimates as a result and does not anticipate that these reductions will impact the ongoing municipal tax rate setting process.

The Governor has also filed legislation seeking permission to reduce Unrestricted General Government Aid (UGGA) by $25.5 million. This reduction will not take effect until it is approved by the Legislature.

For additional information regarding these reductions and related actions, click here.

By the Numbers

In order to provide an update on the progress of the ongoing tax rate and certification season, below please find an overview of the ongoing process. The following information is accurate as of close of business on Tuesday, November 18th, 2014:

Preliminary Certifications: 82 Communities Approved (97 Submitted)

Final Certification: 48 Communities

La4/ New Growth: 214 Approved (271 Submitted)

Tax Rates: 80 Approved

Balance Sheets: 225 Approved

Aggregate Free Cash Approved Total: $833,725,918


This month's Ask DLS is a follow-up question on excess levy capacity. Please let us know if you have other areas of interest or send a question to We would like to hear from you.

I just read the City & Town publication titled "Will Fiscal Prudence Grow with Excess Levy Capacity?" It was very interesting. I have been researching excess levy and am trying to determine the pros/cons of excess levy and how much (if any) is too much. I understand that not having any levy capacity is not good because a town cannot handle sudden budget increases without an override but I was wondering the opposite. Does having too much excess levy negatively impact a town? Would a town get less state aid? Does it affect the awarding of grants?

There are several issues that might influence decisions about building excess levy capacity as a fiscal strategy. Among the factors that should be considered are the community's particular financial needs, the array of revenue sources available to fund services and the existence of accumulated reserve balances such as free cash and stabilization funds. Excess levy capacity can be particularly useful when budgets increase since it represents a recurring revenue source that can be tapped in subsequent years as well. However, if an unexpected expense occurs after the annual tax rate is set, there is no way to access excess levy capacity and the community must rely on reserves on hand such as free cash and stabilization funds. Though excess levy capacity affords a community additional fiscal flexibility, it is best viewed within the context of a more comprehensive reserve policy. In situations where reserves are healthy and can be replenished each year, a strategy to lower property taxes and build excess levy may be more achievable. Despite general interest in reducing property taxes though, close to 60 percent of cities and towns have found this to be difficult to achieve given ongoing spending pressure and finite revenue.

You also ask whether substantial amounts of excess levy capacity will have a negative effect on a town's state aid or grant funding. In general, excess levy capacity has no impact on the amount of local aid received by a community since distribution formulas rely on property wealth and resident incomes. For example, the Chapter 70 education aid formula, which constitutes about 76 percent of all municipal cherry sheet aid, uses total property values and resident income levels to calculate a municipality's ability to pay for education and determine the corresponding amount of state aid. The equalized property values adjust for differences in local assessing practices and are produced every even numbered year by the Division of Local Services.

The other major local aid distribution is Unrestricted General Government Aid (UGGA). Together with Chapter 70 aid, these two programs account for about 95 percent of total municipal cherry sheet aid. Although funds have not been added to the UGGA account by formula since its creation in FY2010, previous reductions have been restored proportionately subject to the availability of funds. Much of the funding for the UGGA account was from the old lottery local aid account. The lottery formula used equalized property valuations and population to award new funds. So while there is no current distribution formula for UGGA, a formula that uses equalized value, population and perhaps income appear to be the most likely future formula options. Most of the remaining cherry sheet accounts reimburse municipalities for costs previously incurred such as property tax exemptions, veterans' benefits and foregone taxes on state-owned property. None of these payments are influenced by a community's excess levy capacity. We are also not aware of any grant funds that may be impacted negatively by excess levy capacity.

A Look at Post-Great Recession General Fund Spending

Tony Rassias - Deputy Director of Accounts

Nationally, from 2009 to 2013, Moody's has had a negative outlook on the U.S. local government sector. Even as municipal finance officers reported that the fiscal condition of cities in 2013 was improving, Moody's continued its negative outlook "due to revenue constraints and expenditure demands." In early 2013, one Moody's senior analyst said, "Overall, the economic recovery remains sluggish despite some bright spots, and looming federal spending cuts may exacerbate weak growth rates."

In recent years, a national concern has been the increased number of bankruptcy filings and debt payment defaults. During 2013, Detroit, Michigan became the largest city in the country's history to file for bankruptcy protection under Chapter 9.


This article will report on General Fund municipal spending(1) by Massachusetts cities and towns from FY2009 to FY2013, the end of the post-Great Recession period to date. The General Fund is the largest of the municipal funds, accounts for the majority of municipal spending and represents outlays derived from the property tax levy, state aid and other locally generated revenue sources.

The data is compiled from Schedule A(2), the annual report of revenues and expenditures submitted by municipal accounting officials to the Bureau of Accounts.

Total General Fund Spending

Chart 1 shows that total General Fund spending began this period at $17.6 billion, remained about steady in FY2010 and then began a climb through FY2013.

Total General Fund Spending by Function

Table 1 shows General Fund spending in millions of dollars by function from FY2009 to FY2013. The table further shows that spending for Education remained the greatest in dollars through this period, followed by spending for Fixed Costs. Spending for Police which was third greatest in spending from FY2009 to FY2011, fell fourth to Debt Service in FY2012, but returned to third place in FY2013.

The greatest percentage increase from FY2009 to FY2013 was in Fixed Costs, followed by Intergovernmental then Education. The percentage for Other Expenditures was the only function category that decreased during this time period.

A review of the data behind the statistics reveals that Public Works, although neither the greatest dollar nor percentage change during this time period, had the greatest percentage changes between each fiscal year shown (down 19% from FY2009 to FY2010, up 9% from FY2010 to FY2011, down 13% from FY2011 to FY2012, up 32% from FY2012 to FY2013).

Fixed Costs include court judgments and employee benefits such as health insurance, retirement, unemployment comp and workers comp. Other Expenditures include expenditures which cannot be properly categorized into one of the specified functions.

Intergovernmental costs include any federal, state or other governmental assessments and charges. The high percentage increase in this category was mostly due to cherry sheet assessments for school choice and charter school sending tuition.

Percentages of Spending by Function

Table 2
shows that as a percentage of total spending per fiscal year, both Education and Fixed Costs spent the greatest for the fiscal years shown. It is interesting to note that most percentages for these function categories remained about steady despite increases in total spending shown in Table 1. The exceptions appear in Public Works, Debt Service and Fixed Costs.

Spending Per Capita(3) and by Function

Table 3
shows that total General Fund spending per capita increased from $2,729 in FY2009 to $2,961 in FY2013. The only reduction in spending per capita was between FY2009 and FY2010.

By function, the Table shows that each category except Other Expenditures increased from FY2009 to FY2013. Eight function categories, however, had a decrease in per capita spending at least once during this time period.

General Fund Spending Per Capita and by Population

Table 4
shows that total General Fund spending per capita and by population increased from FY2009 to FY2013. Three population categories, however, had a decrease in spending per capita in at least one fiscal year during this time period.
It shows that spending was consistently greatest in the 2,000 to less than 5,000 population category. Spending in the other categories during this time period only reached $3,000 per capita in FY2013 for the 10,000 to <20,000 population category.

A review of the data behind these results reveals that several communities in the 2,000 to less than 5,000 population category have exceptionally high spending per capita amounts and are located on Cape Cod and the Islands.


Additional Note

In December of 2013, Moody's revised its outlook for the U.S. local government sector from negative to stable meaning that conditions are not getting worse and that credit risks are more "visible and predictable."

General Fund spending does not include appropriations transferred out of the General Fund for expenditure by another fund.

The report includes Schedule A data from 350 communities only between FY2010 and FY2013.

Per capita spending applies the population data used in the particular fiscal years to distribute cherry sheet aid.
. .
November Municipal Calendar
November 1 Taxpayer
Semi-Annual Tax Bill - Deadline for First Payment

According to MGL Ch. 59, Sec. 57, this is the deadline for receipt of the first half semi-annual tax bills or the optional preliminary tax bills without interest, unless bills were mailed after October 1, in which case they are due 30 days after mailing.
November 1 Taxpayer Semi-Annual Tax Bills - Application Deadline for Property Tax Abatement

According to M.G.L. Ch. 59, Sec. 59, applications for abatements are due on the same date as the first actual tax installment for the year.
November 1 Taxpayer Quarterly Tax Bills Deadline for Paying 2nd Quarterly Tax Bill Without Interest 
November 1 Treasurer Deadline for Payment of First Half of County Tax 
November 15 DESE Notify Communities/Districts of Any Prior Year School Spending Deficiencies

By this date, or within 30 days of a complete End of Year Report (see September 30), DESE notifies communities/districts in writing of any additional school spending requirements.
November 30 Selectmen/Mayor Review Budgets Submitted by Department Heads

This date will vary depending on dates of town meeting.
Final Day of Each Month State Treasurer Notification of monthly local aid distribution.

Click to view distribution breakdown.
To unsubscribe to City & Town and all other DLS Alerts, please click here.

Sunday, August 24, 2014

City & Town - August 21st, 2014

Good summer reading for those interested in the details of calculating the property tax levy and the levy limit. Admittedly not for everyone, but for those interested this is the real deal from the MA Dept of Revenue Division of Local Services.

When will  Franklin set the tax rate for next year?

Depending upon the calendar and their meeting schedule, it usually is the first meeting in December.


City and Town - August 21st, 2014
Local Officials Directory
City & Town is published by the Massachusetts Department of Revenue's Division of Local Services (DLS) and is designed to address matters of interest to local officials.

Editor: Dan Bertrand

Editorial Board: Robert Nunes, Robert Bliss, Zack Blake, Tony Rassias, Tom Dawley, Linda Bradley and Patricia Hunt
In this Issue:
Part 3: Proposition 2 1/2's Levy Limit Components and a Statistical Review Over the Last Decade: Does Your Community "Tax to the Max?"
Joe Markarian - Former MDM/TAB Director of Financial Management Assistance, Tom Guilfoyle - BOA Supervisor of Accounting and Tony Rassias - BOA Deputy Director

This is the third and final part in this series reviewing Prop 2 1/2's levy limitation components along with statistics from FY2004 to FY2013. Part Three will focus on the maximum allowable levy, the common and not-so-common exclusions that allow the levy limit and levy ceiling to be exceeded, completion of an FY2014 maximum allowable levy calculation, and finally tax levies and "excess levy capacity." The levy limit calculation shown in all parts is organized on the basis of the levy limit worksheet found on Gateway's levy limit report page.

The passage of Proposition 2 1/2 on the November 1980 ballot was enormous. The new law changed the way cities, towns and districts budget to the present day. -
A Sketch of the History of the Massachusetts Bureau of Accounts and Related Matters in the Growth and Development of Municipal Finance by Anthony A. Rassias

In November of 1980, the people of Massachusetts passed by ballot vote Proposition 2 1/2 (Chapter 580 of 1980), a law that, among other things, placed constraints on city and town property tax levies beginning in FY1982.

Since that time, these levies have been limited by the law's provisions and approved by the Bureau of Accounts as part of the annual tax rate certification process. Even 33 years since its passage, Prop 2 1/2 initiates considerable discussion and debate.

The Maximum Allowable Levy

The property tax levy is the revenue a community raises through real and personal property taxes each fiscal year when it sets its tax rate. The law established three types of annual levy limits: a levy limit, a levy ceiling and a maximum allowable levy. The levy limit is incremental and allows a permanent but controlled annual increase to the tax levy. The levy ceiling caps the levy limit for that fiscal year at 2.5 percent of the current fiscal year's total assessed full and fair cash value for real and personal property. The levy limit may be increased or decreased by locally adopted referenda, but may not exceed the levy ceiling. The levy ceiling may be increased temporarily by certain locally adopted exclusions. The maximum allowable levy is the maximum amount of property tax a community may raise in a fiscal year.

The maximum allowable levy may or may not be greater than the levy ceiling. If the community has not voted any locally adopted exclusions to the levy limit, the lesser of the levy limit or levy ceiling becomes the maximum allowable levy. In any case, the actual tax levy for the fiscal year, as reported on the annual Tax Rate Recapitulation form, cannot exceed the maximum allowable levy.

Exclusions that Impact the Maximum Allowable Levy

Apart from the debt and capital expenditure exclusions, the other maximum allowable levy components are not-so-commonly used. All of these components are considered "temporary" because the applicable dollar amounts (a) are included in the annual total of tax dollars to be raised, but are not included in the Base (prior year levy limit) for calculating the following fiscal year's tax limitation and (b) have a future end date, although that date may be one year or well into the future.

Debt Exclusion: MGL c. 59, s. 21C(j,k)

The two types of debt exclusions that may be voted are:

1. For debt service on city, town and assessed regional debt incurred prior to November 4, 1980 (called Pre-Prop 2 1/2 debt);

2. For debt service on city, town or assessed regional debt issued after November 4, 1980, (initially called Post-Prop 2 1/2 debt, now simply called the debt exclusion).

This section will review only Post-Prop 2 1/2 debt exclusion votes. Few pre - Prop 2 1/2 debt exclusion votes were taken and none since the mid-1980s.

The debt exclusion has been and continues to be by far the most frequently used form of exclusion. A debt exclusion requires a two-thirds vote of the board of selectmen, or town or city council (with the mayor's approval if required by law) to be placed on a ballot. A majority vote of the electorate is required for approval. Once voted, the debt exclusion allows the community to raise the additional tax revenue needed to pay debt service for each fiscal year on the borrowing issued to fund the specified project until the debt is retired. The excluded amount is offset by any reimbursements and certain premiums received per Bureau instruction. See Bulletin 2013-01B. The debt exclusion:

  • must be presented using wording specified by the law which includes only the borrowing purpose;
  • applies to temporary or permanent debt service;
  • may be negative if reimbursements in any year exceed debt service;
  • must be reserved for the following fiscal year if the amount of debt service excluded exceeded the amount expended;
  • is reduced if excluded debt proceeds are transferred to a non-excluded project.
Chart 1 indicates debt exclusion votes taken between FY2004 and FY2013. There were 1,512 debt exclusion votes taken, of which 1,165 or 77 percent were wins and 347 or 23 percent were losses.

Chart 1 - Debt Exclusion Wins and Losses: FY2004 to FY2013

Source: DLS Data Bank

Fiscal Facts:

  • Total excluded dollars grew about 25 percent from $314 million in FY2004 to $391.7 million in FY2013;
  • For the decade, the largest total debt exclusion was in FY2013 for Wellesley ($10,322,960) and the smallest, also in FY2013, was for Wakefield ($120);
  • Of the 120 winning votes for FY2013, 65 were for schools, 17 for public safety, 15 for construction and repairs to town owned buildings, 12 for public works and 11 for assorted other purposes;
  • Of the 33 losing votes for FY2013, eight were for schools, seven for public works, five for public safety, six for construction and repairs to town buildings, and seven for assorted other purposes;
  • For FY2013, 287 or 82 percent of all cities and towns had at least one active debt exclusion, which when combined, totaled about $391.7 million.
Let's assume an FY2014 debt exclusion of $550,000.

Capital Expenditure Exclusion - MGL c. 59, s. 21C (i1/2)

Enacted by Chapter 562 of 1986, this exclusion has been less popular than the debt exclusion, but has been used more often than other maximum allowable levy components. It allows additional funds to be raised for any item for which the city or town could borrow, but has chosen to fund by appropriation, or for the city or town's apportioned share of a regional capital expenditure. This exclusion requires a two-thirds vote of the board of selectmen, or town or city council (with the mayor's approval if required by law) to be placed on a ballot. A majority vote of the electorate is required for approval. Once voted, the capital expenditure exclusion allows the community to raise the amount included in the vote, or the amount appropriated, whichever is less, minus any state or federal reimbursement received for the acquisition or purpose for the year voted. In addition, the capital expenditure exclusion:

  • must be presented using wording specified by law including a dollar amount, purpose(s) and fiscal year;
  • authorizes a temporary tax increase to the lesser of the levy limit or levy ceiling;
  • has the same wording as an override and must be properly distinguished to the electorate.
Table 1 indicates capital expenditure exclusion votes taken between FY2004 and FY2013. In total, there were 318 votes taken; 219 or 69 percent were wins and 99 or 31 percent were losses.

Table 1: FY04 - FY13 - Capital Expenditure Exclusion Wins and Losses

Source: DLS Data Bank

Fiscal Facts:

  • For the decade, the largest number of capital exclusion votes was in FY2009 at $5,770,361 and the smallest in FY2004 at $2,200,283;
  • For the decade, about 67 percent of wins were for public safety, public works, schools and road repairs;
  • For the decade, the largest capital exclusion vote was $2,360,000 for Dennis in FY2009 and the least was $5,000 for Cummington in both FY2011 and FY2012;
  • For FY2013, there were 11 winning votes taken by 10 towns totaling $3,050,000;
  • For FY2013, winning votes included three for public safety, two for library, two for public works and three for assorted other purposes. The lone loss involved renovation of an athletic field.
Let's assume an FY2014 capital expenditure exclusion of $100,000.

Other Adjustment - Cape Cod Commission

Chapter 716 of the Acts of 1989 created the Cape Cod Commission, a regional planning and land-use regulatory agency that serves Barnstable county. All Barnstable county towns have individually voted to become members of the Commission. Pursuant to s. 18 of the enabling Act, the annual assessment by the Commission to a member is exempt from Prop 2 1/2 and no further local action is necessary.

Let's assume for FY2014 that this provision is not applicable, $0.

Other Adjustment - Chapter 111 s. 127B1/2 and Other Special Legislation

Chapter 111, s.127B 1/2 exempts from Prop 2 1/2 any city or town tax levy appropriation or debt service for the purpose of municipal removal of a residential underground fuel storage tank, the removal of dangerous levels of lead paint as determined by MGL c. 111 s. 194, or repair, replacement or upgrade of a home's septic system required by MGL c. 21A s. 13. No further local action is necessary. For FY2013, only Marion and Wrentham used the Chapter 111 exclusion.

Special legislation approved for Wellesley in 2007 excluded funding for its Other Post-Employment Benefits obligations.

Let's assume for FY2014 that these provisions are not applicable, $0.

Other Adjustment - Regional Refuse Management Districts

The Greater New Bedford Refuse Management District (Chapter 652 of 1987) and the Martha's Vineyard Regional Refuse Disposal District (Chapter 303 of 1985) assess debt service upon their respective member communities and pursuant to their legislation, their debt service assessments are excluded from Prop 2 1/2. No further local action is necessary.

For FY2013, Dartmouth, a member of the Greater New Bedford District and four members of the Martha's Vineyard District used this exclusion.

Let's assume for FY2014 that these provisions are not applicable, $0.

The Water/Sewer Rate Shift, MGL c. 59 s. 21C(n)

The board of selectmen, the town or city council (with the mayor's approval where required by law) may vote to exclude water and sewer debt service. No further local action is required. If voted, the city or town:

  • recovers water and sewer debt service costs from the property tax rather than from user charges;
  • must then reduce its water and sewer charges by the amount of the debt service being transferred to the tax levy;
  • may choose either an all taxpayers or residential taxpayers only option.
Once adopted, the percentage or stated amount of the exclusion remains the same unless changed by a new vote of the board of selectmen, town or city council (with the mayor's approval where required by law). IGR 93-207 has further details.

For FY2013, there were 13 Water/Sewer Rate Shifts totaling about $13.3 million. One community, Winchester, used the residential taxpayers-only option.

Let's assume that the FY2014 water/sewer debt shift was voted as $150,000.

The Tax Levy and Excess Levy Capacity

The tax levy is the annual amount of taxes assessed upon real and personal property in the city or town as reported on the Tax Rate Recapitulation form. The levy cannot exceed the maximum allowable levy as calculated above. The dollar difference, or "excess levy capacity," is the amount by which the community may have legally levied, but chose not to do so.

Depending upon the actual tax levy amount, excess levy capacity may or may not be forever lost. For example, if this fiscal year's actual tax levy is $10,500,000, this fiscal year's excess levy capacity is $811,994 ($11,311,994 - $10,500,000). The difference between $10,511,994 and $10,500,000, or $11,994, is lost for the current fiscal year but returns in the following fiscal year as part of the Base that begins with $10,511,994. The remainder, $800,000, is lost forever.

Chart 2 shows the growth in excess levy capacity from FY2004 to FY2013. The greatest amount of excess levy capacity during this decade was in FY2013 at $345.2 million and the least amount in FY2005 at $172.4 million.

Chart 2 - Excess Levy Capacity: FY2004 to FY2013

Source: DLS Data Bank

Fiscal Facts:

  • For the decade, the greatest amount of excess levy capacity was for Cambridge, in FY2013, at $104,103,959 and the least was for Freetown, in FY2006, at $11;
  • For the decade, the median average for excess levy capacity was about $24,000;
  • For FY2013, the median average for excess levy capacity was about $52,000;
  • For FY2013, five communities had excess levy capacity greater than $10,000,000; Marlborough had greater than $20,000,000 and Cambridge had greater than $100,000,000.

This concludes the three Part series on Prop 2 1/2's levy limit components along with statistics from FY2004 to FY2013. Please visit the
Division of Local Services' website and create your own customized financial, demographic and economic reports. You can also review publications such as Informational Guideline Releases, Bulletins and other annual guidance for more details on tax levies, levy limits, levy ceilings, new growth, ballot questions and more.

For further information, see the Division of Local Services Publications
Levy Limits: A Primer on Proposition 2 1/2 and Proposition 2 1/2 Ballot Questions - Requirements and Procedures. For Part One of this series, click here. For Part Two, click here.

BLA Updates
Bureau of Local Assessment

Last week, Chris Reidy, Assessment Director of the Town of Shrewsbury, arranged a tour for Bureau of Local Assessment staff at the ConEdison Development, Shrewsbury Solar LLC solar farm, with a nameplate capacity of 3.326 megawatts. Many commercial scale farms are being built throughout the state and there have been many questions from local assessors about them. The onsite tour provided staff a clear picture of the operations and will assist us with further understanding the complexity and issues of this industry. Many thanks to company representative Dennis Brennan for his assistance with the tour.

Local Assessment staff Debra Joyce and Donna Demirai recently taught a specialty course at the 59th Annual School for Massachusetts Assessing Officers held at UMASS Amherst. It covered updating and reviewing procedures with assessors on required forms for Non-Certification communities - Interim Year Forms, LA3 Sales Coding, LA15 Analysis, LA4 & New Growth. A copy of the slides from this very informative presentation can be found by clicking here.

Register Now for "What's New in Municipal Law"

The Division of Local Services Legal Staff will offer its annual seminar "What's New in Municipal Law" for local officials on Thursday, September 25, 2014 at The Log Cabin Banquet & Meeting House in Holyoke and Thursday, October 2, 2014 at The Lantana in Randolph.

The general session in the morning will review new legislation and recent court decisions pertaining to local government.

The afternoon session will consist of three concurrent workshops on the following topics: (1) qualification of charitable, religious and other non-profit organizations for local tax exemptions, (2) expenditures for public purposes and administration of trust funds, and (3) potential pitfalls when local officials or employees wear multiple hats.

Please click the following for the agenda and registration form. Registrations must be received by Wednesday, September 17, 2014. Pre-registration is required.

If you have any questions about these seminars, please contact DLS Training Coordinator Donna Quinn at 617-626-3838 or by email at

$3M in Community Innovation Challenge Grant Funding Now Available
Executive Office for Administration and Finance

Recently, Secretary of Administration and Finance Glen Shor announced the fourth round of Community Innovation Challenge (CIC) grants for Fiscal Year 2015. Building upon the success of the three previous rounds of CIC grants, up to $3 million will be made available to support local government innovations through regional collaborations.

"Over the past three years, the Patrick Administration has supported our municipal partners in driving change and developing new and efficient models of service delivery," said Secretary of Administration and Finance Glen Shor. "This additional funding provides municipalities with another opportunity to participate in the CIC program to further highlight best practices for all 351 of our cities and towns."

CIC grants provide financial support for one-time or transition costs related to innovative regionalization and other efficiency initiatives in local governments. By improving effectiveness and efficiency of services, the Commonwealth is able to spend taxpayer money more efficiently, maximizing the impact of every dollar spent.

Since the launch of the CIC program in 2012, the Patrick Administration has invested $10.25 million in 74 unique projects which involve 242 cities and towns, or 69 percent of the Commonwealth's municipalities. In addition to enabling savings, the program has allowed cities and towns to continue or restore core services and increase the efficiency of their operations. Nearly four million Massachusetts residents live in a city or town that participates in the CIC program.

Along with the announcement of a fourth round of funding, Secretary Shor also announced that FY 2013 project success stories are now available on the
CIC program website.

"These reports, along with the 27 reports for FY 2012 projects, will provide all municipal officials in the Commonwealth with roadmaps to develop innovative, regional projects," said Secretary Shor.

The reports include step-by-step implementation guides, line item budgets, measurable outcomes and discussions of challenges faced and solutions achieved. Regionalization efforts have been increasingly critical on the local level. Providing municipalities with the resources to collaborate on shared initiatives allows for reduced costs, improved services and increased efficiency in the delivery of services.

"The Community Innovation Challenge grant project facilitated by the City of Chelsea in partnership with Revere and Everett benefits our communities as funding allows for outside - impartial resources- to assist us with problem identification and solution development related to the quality of crime data. Crime data is a critical element for government officials to consider as we attempt to increase quality of life in our communities. Funding for this project is allowing the cities to conduct pilot data audits to identify and correct crime data reporting discrepancies that will establish a process for adoption by other municipalities in the Commonwealth - ultimately leading to enhanced data driven decision-making strategies and use of data for performance management that are comparable form community to community," said Brian Kyes, Chief of Police for the City of Chelsea.

"The CIC program has enabled Hawlemont Regional Elementary School to accelerate the development of an innovative agriculturally-based curriculum. The students are buzzing with excitement about school at an unprecedented level. I anticipate Hawlemont will lead the way for other rural elementary schools across the Commonwealth and beyond," said Michael Buoniconti, Superintendent for the Hawlemont Regional School District.

How to Apply

Applications, information session dates and times, and guidelines are now available on the CIC program website:
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August Municipal Calendar
August 1 Taxpayer
Quarterly Tax Bills - Deadline for Paying 1st Quarterly Tax Bill Without Interest

According to M.G.L. Ch. 59, Sec. 57C, this is the deadline for receipt of the 1st Quarter preliminary tax payment without interest, unless the preliminary bills were mailed after July 1. If mailed by August 1, the 1st Quarterly payment is due August 1, or 30 days after the bills were mailed, whichever is later, and the 2nd Quarterly payment is due November 1. If mailed after August 1, the preliminary tax is due as a single installment on November 1, or 30 days after the bills were mailed, whichever is later.
August 1 Taxpayer Annual Boat Excise Return Due 
August 1 Accountant Notification of Total Receipts of Preceding Year

The total actual local receipts (e.g., motor vehicle excise, fines, fees, water/sewer charges) of the previous fiscal year must be included on Schedule A of the Tax Rate Recapitulation Sheet (Recap) which is submitted by the Assessors to DOR. On the Recap, the Accountant certifies the previous fiscal year's actual revenues, and the Assessors use this information to project the next fiscal year's revenues. Any estimates of local receipts on the Recap that differ significantly from the previous year's actual receipts must be accompanied by documentation justifying the change in order to be approved by the Commissioner of Revenue.
August 10 Assessors Deadline for Appealing EQVs to ATB
(even numbered years only)
August 10 Assessors Deadline for Appealing SOL Valuations to ATB
(every fourth year after 2005)
August 15 Assessors Deadline to Vote to Seek Approval for Authorization to Issue Optional Preliminary Tax Bills

For semi-annual communities issuing optional preliminary property tax bills, the Assessors must vote to seek authorization to issue the bills from DOR by this date. After receiving approval, Assessors must submit a Pro-forma Tax Rate Recap Sheet to DOR for review and issue the tax bills by October 1.
August 31 DOR/BOA Issue Instructions for Determining Local and District Tax Rates

A copy of the Tax Rate Recap Sheet and its instructions are forwarded to the community.
August 31 Assessors Begin Work on Tax Rate Recapitulation Sheet (to set tax rate for semi-annual bills)

Until the Tax Rate Recap Sheet is completed and certified by the Commissioner of Revenue, the community may not set a tax rate nor send out its property tax bills (unless it issues preliminary quarterly tax bills or requests from DOR the authority to send out preliminary tax notices if DOR requirements are met). Communities should begin gathering the information in enough time for the tax rate to be set and tax bills mailed by October 1. The Tax Rate Recap Sheet provides Mayors or Selectmen with a ready-made financial management tool because the town's most important financial management information is summarized on this form. The Mayor or Selectmen should review the Recap Sheet in preliminary form in order to understand the following financial information:

Page 1 (Tax Rate Summary) - The proposed tax levy should be compared to the levy limit. If a community does not levy to its limit, the remaining levy is referred to as excess levy capacity. Excess levy capacity is lost to the community for the current fiscal year although it will always remain in the levy limit calculation.

Page 2 (Amount To Be Raised) - This section includes appropriations and other local expenditures not appropriated. These include overlay deficits, revenue deficits, state and county charges, Cherry Sheet offset items, and the allowance for abatements and exemptions. By comparing this information to the prior year(s), any significant changes can be determined.

Page 2 (Estimated Receipts & Revenues From Other Sources) - In particular, Section C shows the amount appropriated from free cash and other available funds. By comparing the amounts appropriated to the balances in these accounts (available from the Accountant/Auditor), the Mayor or Selectmen can get a sense of how their non-property tax revenues are being used.

Page 3, Schedule A (Local Receipts Not Allocated) - By comparing these figures to prior year(s), the Mayor or Selectmen can determine any changes in these revenues.

Page 4, Schedule B (Certification of Appropriations and Source of Funding) - This section includes financial votes of City/Town Council or Town Meeting not previously reported on last year's recap.
Final Day of Each Month State Treasurer Notification of monthly local aid distribution.

Click to view distribution breakdown.
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Stephen Sherlock

Community Information Director (volunteer) for