AMESBURY – With taxes set to rise again, Amesbury may be on the verge of earning the dubious distinction of having the highest tax rate in the state.
In a memo to the City Council, Mayor Thatcher Kezer said that the tax rate for the upcoming year would be increasing from $19.13 to $20.24, assuming the council votes to maintain a single tax rate.
In 2012, a tax rate of $20.24 per thousand would’ve ranked as the highest in the state among communities with single tax rates, with Sharon being the only other community topping the $20 threshold. Most Massachusetts communities haven’t set their rates for the upcoming year yet, but compared to the 103 that have, Amesbury’s new rate would be the highest by a wide margin.
One of the main reasons cited by the mayor for the tax rate increase is the sharp decline in residential property values, particularly in the condominium market. Kezer said the city experienced a $67 million decrease in total property values in the past year, driven heavily by an 8.9 percent decrease in the average condominium value from $169,721 to $154,614.
“Even if we didn’t increase the taxes by $369,000, which is very moderate on a $51.3 million budget … the rate would have gone up 90 cents simply because of the loss in value,” Kezer said.
While the higher tax rate is sure to garner the most attention within the community, the city’s tax bill is ultimately what will have an impact on the pocketbook of residents and businesses. Kezer said the average single-family property’s bill would increase by $128.44, which is slightly more than the $122 increase from 2010 to 2011.
In 2012 the city’s average tax bill ranked No. 62 in the state for single-family homes, and at this point it’s too early to say where Amesbury will rank next year.
Even though Amesbury’s residential tax rates are among the least palatable in the state, the city’s commercial rates are comparatively much easier to digest. Amesbury’s 2012 rate of $19.13 ranked as No. 10 in the state for residential properties, but was No. 96 for commercial rates.
The reason for this is because by virtue of having a single tax rate, the city remains much more business-friendly than many communities that have a split tax rate. In some communities, like Lawrence and Lowell, the commercial and industrial rates can top $30. In Springfield, last year’s commercial rate was nearly $40.
Amesbury has previous experience with a split tax rate. In 2006, the Amesbury City Council voted to switch to a split tax rate, but that proved to be extremely unpopular and the single rate was brought back shortly afterwards.
“The way it worked out was the average savings for the residents was something like $100,” Kezer said. “But the average increase on the businesses … were in the $4,000 range.”
The new tax numbers did offer some good news – Amesbury’s commercial and industrial properties gained value. In the past year, the average commercial property value rose by 5.52 percent to $579,059, while the average industrial property value rose by 2.03 percent to $1,018,545.
Relative to local communities that have a split tax rate, Kezer noted that Amesbury’s commercial tax rates are comparatively low. Despite having lower residential tax rates, Haverhill ($24.68), Andover ($23.54), Methuen ($23.04) and Lawrence ($31.81) all had higher commercial rates in 2012, he said.
“What that means is we are competitive on the commercial side, and by growing the commercial side, it brings relief to the residential side,” Kezer said. “So we are in the right place to address the residential issue.”
Kezer also highlighted that the city had increased its Levy Capacity, which is the amount of property taxes unused below the maximum allowed under the law. Amesbury’s total Excess Levy Capacity for the current fiscal year is $1,839,411, meaning the city is taxing that much less than it theoretically could.
“According to the Massachusetts Taxpayers Foundation, 75 percent of all Massachusetts’ communities are taxing at their maximum levy,” Kezer said. “Amesbury is part of the 25 percent not taxing to the maximum levy with 4.9 percent excess levy capacity.”
Average Property Values
Type – Average Value – Percentage Difference
Single Family $295,642 -3.41
Condo $154,614 -8.9
Two Family $276,388 -5.56
Three Family $299,325 -5.12
Apartment $987,248 -1.78
Commercial $579,059 +5.52
Industrial $1,018,545 +2.03
Personal Property $212,978 -8.07