For the first time in six years, the Newton Board of Aldermen last night decided to slightly adjust the city's tax shift, moving a small amount of the tax burden off local businesses and ultimately bringing in more money for the city.
With numbers based the city's median single-family property value of $680,500, the shift will cause single-family tax bills to increase by $247, or 3.36 percent. Meanwhile, the median commercial tax bills will increase by $1,046, or 6.9 percent.
The shift, which was approved at a 174 percent, determines how much of the annual tax levy the commercial, personal, industrial and residential property owners are responsible for. Since 2005, the city has stuck with a 175 percent shift.
According to Director of Assessment Administration Elizabeth Dromey, who presented the tax shift report last night, moving from a 175 percent shift to a 174 percent shift would mean an additional $10 on median single-family property bills, while median commercial property owners would see a savings of $100 on their yearly tax bills.
For more details, check out the assessment report in the .pdf section to the right.
Compared to a 175 percent shift, the 174 percent shift in fiscal 2012 will also allow the city to take in approximately $100,000 more in tax dollars, according to Dromey.
"The 174% tax [shift] would realize the greatest amount of tax revenue that the city would be able to collect by approximately $100,000 while at the same time having what most people would consider a minimum impact on the average residential tax payer," said Alderman Lenny Gentile, who is the chairman of the Finance Committee and therefore led last night's discussion and tax classification hearing.
Dromey said the estimated increases are based on median property values because the number of high-value residential and commercial properties in the city oven skews the average property value. For example, the average fiscal 2012 value of commercial property in Newton is almost $2.1 million, while the median is $760,500.
Newton-Needham Chamber of Commerce President Bob Halpin spoke briefly during the tax classification hearing, advocating for a tax shift that would benefit the local businesses.
"A small shift does have big consequences for those small businesses," Halpin said.
With the shift voted in last night, the fiscal 2012 residential rate will be $11.17 per thousand dollars (of assessed value) and the commercial rate will be $21.33 per thousand dollars, pending approval from the Department of Revenue.
Last year, residents paid $10.90 per thousand dollars while commercial property owners paid $20.89 per thousand dollars.
There was little discussion from the board last night regarding the proposed shift, unlike last year when part of the board pushed for a 173 percent shift in order to take some tax burden off local businesses.
In the end, Alderman Stephen Linsky was the only member of the board to vote against the proposed shift, with Aldermen Marcia Johnson and Anthony Salvucci absent.
Other facts presented during last night's tax classification hearing:
- With the new shift, the median two-family home tax bill will increase by $20.03
- Newton's single-family property values increased by 1.26 percent from fiscal 2011 to fiscal 2012
- Commercial property values increased by 1.07 percent
- During fiscal 2011, Newton ranked as #21 on the state's list of average single family tax bills (with #1 being the highest)
- By law, the city is limited to tax no more than 2 1/2 percent of the total assessed value of the city. With the 175 percent shift, the city would have ended up with around $119,000 more than the levy limit. With a 174 percent shift, the city only ends up with around $16,000 more than the limit. Therefore, the 174 percent split gives the city $100,000 more in tax dollars than the 175 shift.
- During calendar year 2010, almost 95 percent of the single-family homes sold in Newton went for more than $400,000, while almost 50 percent sold for more than $750,000
- 10 percent of the homes sold in Newton during 2010 sold for more than $1.5 million
- Newton has had more than $3 million in certified new growth, with some coming from renovations to local hotels and the Chestnut Hill Shopping Center