To the editor:
Many people are raising concerns about their real estate tax bills. Taxpayers need to understand how the budgets and how rising real estate prices impact our tax bills.
Some questions I’ve heard deal with how increased assessments are determined. Why did some people experience huge increases in their assessed value and others have lower, or closer to last year’s, assessed values? Was the assessed value determined by “drive-by” outside visits? Was it affected by home improvements that were filed? Or did a nearby house selling for significantly more affect the neighborhood by applying a similar increase to all neighbors?
In Great Barrington, some answers are straightforward and others not so:
Taxes and the Tax Rate
- The tax rate is primarily determined by the town budget and Berkshire Hills Regional School District assessment (which the Town does not control). There are also partial budget additions and offsets from the state, grants, local receipts and “free cash,” which can be thought of as an “unassigned reserve” or cushion.
- Local receipts (such as lodging and meal taxes, licensing fees and cannabis revenues) are typically under-budgeted, so that they add to the “cushion,” which has been traditionally large. More recently, with cannabis revenues, this reserve has ballooned and is part of the town’s budget on which we are taxed.
- In my opinion, the size of this cushion should be debated during this February’s budget cycle and lowered to bring down the tax rate. This is in addition to discussing budget items that lead to long term increases.
The Tax Rate
- While town’s assessed values have increased in total, this does not drive up the tax rate. The total increased assessed value actually REDUCES it. All things being equal, the tax rate would go down proportionately. As an example, if the town’s total assessed value goes up 10 percent, the tax rate would go down by 10 percent. (From an economic development perspective, growth in the number of taxpayers implicitly reduces the tax rate if assessed values also rise.)
Assessments
- While the size of the pie (total budget) stays the same as what was voted in, how the “pie” is divided is determined by individual assessment processes.
- New home sales are generally assessed at the price that was paid.
- This sometimes increases other properties in the same area.
- If some are increased, reductions will occur in other properties to collect the same amount in total.
- There is an abatement process to challenge how assessments are applied to individual properties, but the abatement application deadline is coming up soon.
- Our Town Manager or Assessor needs to explain the current process as to how individual properties are assessed.
Principal Assessor
- The Town has had three different principal assessors in the past three years, so the Town needs to ensure the assessment process is consistent and well understood.
- Concerns include: What specific methods are being used to determine increased assessed value? How often is it changed? What type of inspections are done and how do home improvements or sale prices of neighboring houses impact other assessed values?
Taxpayers with concerns about their assessment and tax bills should file for an abatement before the February 1st, 2022, the Massachusetts deadline.
Note: This information was researched and discussed with several town officials.
Sharon Gregory
Great Barrington
The writer is the former chair of the Great Barrington Finance Committee.
