AMESBURY — Mayor Thatcher Kezer this week registered his opposition to subsidizing the city’s tax rate with free cash funds, saying such a move would amount to “poor financial planning.”
In response to recent suggestions that the city use unspent tax money to drive down its rising tax rate, Kezer pointed to Amesbury’s recent bond rating upgrade as an argument in favor of maintaining its reserve funds.
Earlier this week, Standard and Poor’s Rating Services announced that it had raised Amesbury’s long-term bond rating from A to A+, citing the city’s stable financial outlook due to improving reserves and its long-term projections of structural budget balance as factors for the upgrade. The higher bond rating will allow Amesbury to borrow money at better rates over the next year.
Kezer attributed the rating increase to the city’s ability to build its reserves through a stabilization fund, free cash and indirectly by staying well under its levy capacity, or the amount the city is allowed to raise in taxes annually.
“Those are the three financials I talk about often and that’s what we’re focused on watching,” Kezer said. “That’s the real metric looking at financially where we are. The bond raters look at that and it’s all positive.”
Kezer touted the bond rating increase as great news for Amesbury, but the idea of building reserve levels could be a tough sell to residents growing increasingly irate over rising tax rates.
On Tuesday, the City Council will meet for the annual tax classification hearing, at which councilors are expected to certify a new single-tax rate of $20.24 per thousand, up from $19.13 this year. The meeting starts at 7 p.m. in City Hall.
The announcement of the new tax rate has drawn renewed criticism of city officials for failing to keep the tax rate under control and has also prompted demands for meaningful tax relief measures. One solution that has gained steam recently is the idea that the city use its free cash funds to help relieve the burden on the taxpayers, an idea that directly contradicts the mayor’s philosophy.