TOWNSEND-- The day after the town's annual tax classification factor public hearing, the tax rate for fiscal 2013 was set at $18.26 per $1,000, according to Town Assessor Vicki Tidman, compared to $16.96 per $1,000 in fiscal 2012. Despite the increase, residents shouldn't necessarily expect to see a huge difference on their tax bills.
The reason, said Tidman, is that property assessments have dropped throughout the town over the course of the fiscal year.
"It seems like a large increase in the tax rate, but the actual taxes on properties aren't going up much," said Tidman.
To establish the assessments for the upcoming fiscal year, the Board of Assessors has to look at the real-estate sales of the previous calendar year.
"A home you maybe would have paid $250,000 for a few years ago, you now might only pay $220,000. The market prices of real estate have dropped," said Tidman. "Some places are holding their own and Townsend is starting to pick back up now, but we're behind the curb with assessed values because we can't base it on what's happening right now. For fiscal 2013, we look at the 2011 calendar year."
In fiscal 2012, the bill for the average home valued at $234,090 was $3,970; in fiscal 2013, the bill for the average home valued at $220,025 will be $4,018, said Tidman.
"Some people go, 'Oh, my assessment went down so my taxes must have went down, too,'" said Tidman. But that's not how it works. "It usually evens out with the assessed value and the tax rate, unless an override goes through."
To help establish the town's annual operating budget, the property throughout town must be assessed and then multiplied by the tax rate.
"So if the assessments drop, then the tax rate has to go up to raise money," said Tidman. "Ultimately, we have to cover the budget."
Fiscal 2013's levy limit -- the amount that the town has to raise with taxes -- is $14,060,601, according to Tidman. The total fiscal 2013 budget, including the amendments that were adopted at Special Town Meeting in November, is $18,139,308, according to Town Administrator Andy Sheehan. Sheehan said discussions are beginning over what next year's budget will be; he projects that the budget "will likely be roughly 2.5 percent above the final budget that was adopted this year."
An increase of 2.5 percent in the operational budget is typical, said Sheehan, due to Proposition 2 1/2. Although property taxes are the biggest driver of the town's budget, other factors such as local aid also affect the total.
Although the drop in the real-estate market has been a nationwide problem for the past several years, Sheehan said that throughout Massachusetts, the local area was particularly hard hit.
"We're seeing a little bit of an uptick but not like in other areas," he said. "Because of the separation from the highway, the distance from the interstate, it takes a longer time for recoveries to reach us."
Prior to the tax rate being set, the annual tax classification public hearing must be held in order to establish if there will be a universal tax rate or if there will be a split between commercial, industrial and residential properties. At the tax classification hearing, per the recommendation of the Board of Assessors, a factor of 1 was set across the board for commercial, industrial and residential properties, meaning that they will be responsible for the same tax rate. The reason, said Chairman Niles Busler during the hearing, is that the commercial and industrial properties only comprise about eight percent of the tax base in Townsend. To vote for a higher rate for commercial and industrial properties might chase the few local commercial properties that exist out of town.
"In Townsend, we always vote for one rate because it's such a small commercial base," said Tidman. "If you had a large commercial base, then you could split the rate and have the commercial carry a higher burden and give the residential more of a break, but we don't have enough commercial (properties)."