NewburyportNews.com, Newburyport, MA

Local News

December 11, 2012

Breaking down the layers of the rising tax rate

(Continued)

Most of the attention has focused on Amesbury’s high residential tax rate, which was the 10th highest in the state last year and currently sits as the fifth highest this year with 134 communities still to report their new rates as of press time.

The calls for meaningful tax relief measures have grown louder in the past week, and the City Council even met for a special meeting last night to discuss the merits of using the city’s free cash in the future to drive the rate down.

Kezer’s response to all of this is that the tax rate isn’t what’s important, and that the tax bill is what people should be focusing on. He even went so far as to say “tax rates don’t matter, tax bills do” in a recent letter to the editor published by The Daily News.

That quote didn’t go over well with many residents, but the truth is that there is sound reasoning behind the mayor’s comments, even if you disagree with the premise.

If the tax rate is determined by the total dollars taxed divided by the total property values, then lower property values would naturally result in a higher rate, assuming the total dollars taxed stayed the same or went up. But at the same time, lower property values also mean a smaller amount to multiply the higher rate by, so the resulting tax bill usually winds up being close to the same amount.

In Amesbury’s case, the average residential tax bill for next year for all types of property is increasing by $73.04, and by $128.44 for single-family properties. Amesbury has increased spending in the past year, particularly in the school system, which would at least partially explain this year’s increase.

The problem with the mayor’s comments beyond their tone is that it ignores the problem of perception that high tax rates create. Tara Donahue-Scott, an Amesbury resident who works as a real estate agent at Re/Max on the River, told me that buyers moving to the area frequently write off Amesbury based on the tax rate alone, and that most of her co-workers deal with similar hurdles trying to sell Amesbury homes.

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