NewburyportNews.com, Newburyport, MA

December 4, 2012

A pair of factors add up to rising tax rate

Amesbury City Notebook
Mac Cerullo

---- — They say the only things certain in life are death and taxes, but Amesbury’s newly announced tax rate for next year is prompting many residents to accuse the city of taxing them to death.

It might sound dramatic, but truth be told, the residents have good reason to be unhappy. The newly proposed tax rate of $20.24 would have ranked as the highest residential tax rate in the state last year, and early reports are pointing toward the rate being among the highest again this year as well.

That’s not good, no matter how you slice it, but whose idea was it to set the rate that high? Despite what some might say, the truth is no one person really “sets” the tax rate. Not the mayor, not the City Council and not some paper pusher on Beacon Hill. The tax rate is actually determined by a mathematical formula, about half of which is beyond the direct control of any city official.

To determine the tax rate, you take the total dollars raised and appropriated in taxes and divide it by the city’s total property value in thousands.

The total dollars raised is obviously the piece that the city can control. Assuming property values stay level, reducing spending would result in a smaller fraction, and a lower tax rate as a result.

The problem is that property values never stay level, and lately they’ve been steadily on the decline. Mayor Thatcher Kezer said that Amesbury lost roughly $67 million in property value over the last year, thanks in large part to the market volatility of the city’s multi-family housing units and condominiums, which make up a big chunk of the city’s total housing stock.

That big a drop means that even if spending stayed exactly the same as it did a year ago, the tax rate still would have increased by 90 cents, Kezer said.

Think of it this way, you could increase spending by millions of dollars, but if the property values fly through the roof during that time, the tax rate will actually go down. But on the other hand, you could drastically reduce spending and still see tax rates go up if property values were to decrease enough.

Amesbury’s conundrum is that falling property values are causing the tax rate to rise, and the high tax rate is causing the property values to fall even more as a result, creating a sort of self-perpetuating downward spiral. The challenge for the city’s leaders going forward will be to figure out how to address both of these problems in a way that allows for meaningful tax relief to the residents while addressing the real root of the problem.

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A couple of quick holiday notes: Local senior citizens are invited to the Amesbury Middle School Band and Chorus’ annual Christmas and Holiday Concert, which will be held on Friday, Dec. 14, at 9 a.m.

The free show will be at the Amesbury Middle School Performance Center and refreshments will be served in the school cafeteria for an hour before the show begins. The performance is open to senior citizens and their guests.

The show is sponsored by the Amesbury Police Department, the Council on Aging and the AMS band and chorus program, and it is made possible thanks to community donations to the Amesbury Police Officers Association. Free transportation will be available to seniors who call the senior center in advance at 978-388-8138.

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Edward Jones Investments is supporting the Toys for Tots program by using its local offices as a drop-off location for this year’s toy drive.

Residents are encouraged to bring in new, unwrapped toys during regular business hours to Edward Jones’ Amesbury offices at 49 Main St. and 19 Haverhill Road.

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Lastly, don’t forget to support those in need this holiday season. The Amesbury Holiday Program is still looking for individuals to donate Christmas gifts to the children of Amesbury’s struggling families, and Our Neighbors’ Table still needs more food to help provide those people with a real Christmas dinner.

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The following meetings are scheduled this week and are open to the public.

Today

School Committee Budget/Finance Subcommittee, 6 p.m., Amesbury High School, Highland Street

School Committee, 7 p.m., Amesbury High Library

Cultural Council, 7 p.m., Amesbury Health Center, Morrill Place

Tomorrow

ACT Toy Drive, 5:30 to 7:30 p.m., ACT Studios at Amesbury High School

Thursday

ACT Toy Drive, 5:30 to 7:30 p.m., ACT Studios at Amesbury High

Zoning Board of Appeals, 7 p.m., City Hall Auditorium, Friend Street

Monday

Planning Board, 7 p.m., City Hall Auditorium

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Mac Cerullo covers Amesbury for The Daily News. He can be reached at 978-462-6666, ext. 3238 and at mcerullo@newburyportnews.com. Follow Mac on Twitter at @MacCerullo.