Taxes are truly an issue that never goes away in Amesbury, and if you thought there would be a couple months of respite between last month’s tax classification hearing and the annual budget discussion in the summer, keep dreaming.
Case in point, tensions boiled over at last week’s City Council meeting, when Mike Buetow of Cabot Court spoke out about how he and his neighbors’ tax bills had all increased by over $1,300 this past year, which he noted was more than the increases experienced by all nine members of the council plus the mayor combined.
That line of reasoning didn’t go over well with the council, and it drew a stiff rebuke from councilor Derek Kimball.
“I get it, it’s tough, but when I hear you comparing the mayor and the council to a neighborhood and like the assessor is fixing the numbers, I’m sorry, there’s no conspiracy,” Kimball said. “I just want to say enough.”
Considering that the big ticket item on last week’s agenda was a vote on the Stretch Code, which doesn’t have much of a direct impact on the city’s taxes, the intensity of this exchange was somewhat surprising, even though I suppose it shouldn’t have been.
Buetow has been circulating a petition calling for a 5 percent spending cut across the board for the past month now, and since the new tax rate of $20.24 was certified in December, most of the city councilors have indicated a desire to cut spending to bring down the rate as well.
But the council has been criticized in the past for not doing enough to keep taxes down, with opponents accusing them of talking tough on spending and then voting yes anyway.
As the city moves closer to budget season, there will likely be a lot of discussion over what cuts need to be made and how deep those cuts will have to be. At the same time, the process of relocating the Department of Public Works garage out of the Lower Millyard and the impending construction of the new Heritage Park will also likely fuel continued grumblings from opponents who believe the city shouldn’t be spending money on those projects either.
So before the budget discussions begin, it’s important that both sides understand that there is a difference between overspending on operations and investing in the city’s future.
First, here are some facts. With nearly every community in the state reporting, Amesbury’s tax rate of $20.24 ranks as the seventh highest in the state and the highest in Essex County.
The city has released some data regarding where Amesbury stands, taxwise, in the county. Amesbury’s average single-family tax bill of $5,984 ranks No. 14 out of 34 Essex County communities and is right near the county average of $5,935. The city’s average single-family tax increase of $129 was No. 23 in Essex County and just below the county average. Only three communities – Lynn, Hamilton and Wenham – actually saw their average single-family tax bills go down.
Amesbury’s tax rate has also largely followed market trends. Between 2001 and 2007, the city’s tax rate dropped every year from $18.28 down to $13.16, fueled mostly by enormous increases in property values thanks to the national housing boom. To put it in perspective, the city gained $700 million in total property values during the first seven years of the new millennium, and the average property more than doubled in value.
But since the housing bubble burst in 2008, Amesbury has seen a steady decline in property values, and since the tax rate is determined by taking the total dollars taxed and dividing it by the city’s total property values, those declines in home values has led to a corresponding increase in the tax rate.
Now, although property values appear to be the primary driver of Amesbury’s tax rate, the city doesn’t get a free pass on spending either.
In 2010, the city commissioned a study to determine how much Amesbury was spending relative to other communities in the region. The study was conducted by the Ad Hoc Citizen Advisory Committee, and upon release it reported that Amesbury’s fire, public works and police departments spent considerably more than other communities of similar size.
More recently, the city has come under fire for replacing former school business administrator Mike Bergeron, who made $94,000 annually, with former Newburyport assistant superintendent Deirdre Farrell, who will be paid $129,000 annually.
Councilor Kelcourse has also said on numerous occasions that he isn’t comfortable with the fact that many department heads, including police chief Mark Gagnon, make much more than some of their peers in bigger communities. He said that Gagnon in particular makes 12 percent more than the police chief of Peabody, which has a population three times that of Amesbury.
The point I’m trying to get at is that there are a lot of pieces to this puzzle and different ways to attack each one. If the council is serious about cutting spending, then it should be willing to work with all parties involved to find areas where the city is overspending and have the fortitude to make the necessary cuts.
But at the same time, the effect spending cuts will have on their own won’t be significant if property values drop by $67 million again like they did last year. Heck, the council could make a whole range of serious cuts and the tax rate could still go up again.
In order to keep that from happening, the city needs to build up its property values, and as controversial as it might be, the city is trying to do that by investing in projects like the DPW move and the new Heritage Park.
Whether the city spent too much on the DPW move has been argued to death, and I won’t touch that right now because frankly the ship has sailed either way. But regardless of the cost to move the building, the reality is the Lower Millyard has been wasted for decades and the city should be getting much more out of it than it has.
Keeping in mind that last year the city lost $67 million in total property value, which was responsible for 90 cents out of the $1.11 increase in the tax rate, an increase in value of that size could have the kind of impact on the tax rate that might not be possible through spending cuts alone.
The bottom line is not all money spent is money wasted, although I’ll have to defer to people who are better at math than I am to determine whether or not these projects ultimately turn out to be better for the taxpayer than doing nothing. Aren’t taxes fun, people!
The following meetings are scheduled this week and are open to the public:
City Council Ordinance Subcommittee Meeting, 7 p.m., City Hall Auditorium
School Committee Meeting, 7 p.m., Amesbury High School Library
Energy Task Force, 6:30 p.m., Ordway Building, 11 School Street
Board of Assessors, 5:15 p.m., City Hall Auditorium
Mac Cerullo covers Amesbury for The Daily News. He can be reached at 978-462-6666, ext. 3238 or by email at firstname.lastname@example.org. Follow Mac on Twitter at @MacCerullo.