Property taxes are set to rise 1.96 percent on July 1 after the Board of Finance on Thursday night voted unanimously to set the tax rate at 24.4 mills, or $24.40 for every $1,000 of assessed property value.
The taxes will fund a $284,962,638 budget for the 2014-15 fiscal year, approved earlier in the week by the Representative Town Meeting. The town's current tax rate is 23.93 mills.
The finance board's 9-0 vote followed a decision to raise the anticipated tax-collection rate in the next fiscal year from 98.71 percent to 98.79 percent to offset a drop in the town's grand list, which is the total assessed value of all taxable property in town.
The Board of Assessment Appeals has lowered property assessments by $19.7 million -- about $9.4 million more than initially projected -- creating a revenue shortfall of about $230,000 in the next fiscal year, according to documents reviewed by the Board of Finance and Robert Mayer, the town's fiscal officer. If the Board of Finance didn't raise the anticipated tax-collection rate for 2014-15, taxes would have had to rise 2.05 percent under a tax rate of 24.42 mills.
A homeowner with the average residential property assessment of $455,000 saved $9 because of the board's decision to raise the anticipated tax collection rate from 98.71 percent to 98.79 percent.
"We've got a problem on the assessment side, and this helps cover that problem," Board of Finance Chairman Thomas Flynn said about increasing the collection rate. Neither Mayer nor Town Tax Collector Cinda Buchter objected to raising that figure.
"98.71 was selected in November. I can't say I would pick that same number if I was picking the number today," Mayer said.
Flynn said the actual tax-collection rate this fiscal year isn't known yet because it doesn't end until June 30. Mayer said the town had used an anticipated tax collection rate this fiscal year of 98.75 percent. In 2012-13, the actual tax collection rate was 98.79 percent, Buchter said.
Finance board member James Walsh said he is concerned that information on the Board of Assessment Appeals' action wasn't available when the Board of Finance voted in April on the budget proposal. Flynn said the BAA's adjustment at least should have been available to the Representative Town Meeting when it voted on the budget early Tuesday, though he added he didn't know for certain that it wasn't. Mayer said his office received the BAA adjustment April 8 -- after the finance board voted on the proposed budget, but before the RTM voted.
Mayer said he didn't expect the BAA to lower property assessments by $9.4 million more than initially projected because this is the third year since the last townwide property revaluation. Walsh said, "It seems like we've got to get some kind of analysis as to how this happened."
Finance board members later said, after hearing addresses of homes that had lowered assessments by the assessment panel, that it appears Superstorm Sandy was largely responsible because many of the properties are in the town's beach district. Mayer said a property where a home was demolished would qualify for a lower assessment. Walsh said demolition of some homes damaged by the storm in October 2012 didn't take place earlier because homeowners were battling the Federal Emergency Management Agency over reimbursements.
Catherine Albin, a finance board member, said properties that had lowered assessments likely would be back on the grand list at a higher assessment once a new home is built. "In time, the houses that replace what's there are going to come in at a higher assessed value, growing the grand list, but we're going to have to wait for that to happen," she said.
The adopted tax rate of 24.4 mills funds a $285 million town budget for 2014-15, which rises $6.5 million, or 2.33 percent, over the current town budget of $278.5 million.
The owner of a property assessed at $250,000 will see a tax increase of $117.50, from $5,982.50 to $6,100; a property assessed at $500,000 would have a tax hike of $235, from $11,965 to $12,200, and a property assessed at $750,000 would see a tax rise of $352.50, from $17,947.50 to $18,300.
On the higher end, the owner of a property assessed at $1 million would have a tax increase of $470, from $23,930 to $24,400, and a property assessed at $5 million would have a tax hike of $2,350, from $119,650 to $122,000.