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.