, Newburyport, MA

December 12, 2012

Kezer defends stand on tax rate

Mayor argues healthy reserves will serve the city well

By Mac Cerullo
Staff Writer

---- — AMESBURY — Despite mounting pressure, Mayor Thatcher Kezer yesterday continued to defend his decision not to use free cash to drive down the tax rate.

In advance of last night’s annual tax classification hearing, Kezer said he believes the community’s free cash could be better utilized elsewhere and that directing it toward offsetting the latest tax increase amounted to “poor financial planning” and could result in financial instability.

“It’s not a wise use of our free cash, because one, it creates a structural deficit the following year,” Kezer said. “And secondly, we’ve worked hard in order to start building our reserves to take care of certain issues.”

Kezer said a healthy reserve fund would allow the city to respond to unexpected financial hurdles in the short term while helping the city secure better borrowing rates for the next 20 years through its newly raised bond rating.

He added that having high reserves would allow the city to take advantage of any state or federal grants requiring a local match, including “some significant grants” for the redevelopment of the Lower Millyard.

The mayor has repeatedly said that he thinks the tax bill is a more important number than the tax rate, but that has been a difficult concept to communicate to taxpayers, who have become fixated on the new tax rate of $20.24.

Since the new rate was announced a couple of weeks ago, there have been calls from all corners of the city to use a portion of its free cash funds to drive the rate back down below the $20 threshold, if nothing else but to combat the perception that Amesbury is too expensive.

On Monday night, the City Council sent Kezer a resolution expressing its disappointment over the situation and urging him to reconsider his stance. Councilors said they understood the fiscal drawbacks of using free cash to offset the tax rate, but argued reassurances needed to be sent to taxpayers.

In response, Kezer said his job is to make the best decisions for Amesbury and not necessarily the most popular ones.

“I can’t control other people’s agendas,” Kezer said. “All I can do is focus on those metrics that have a real impact and not get distracted by the emotions of the moment on metrics that we care about but don’t have the bigger impact.”

Another key criticism from councilors was that they weren’t aware that the city’s property values would be declining so sharply. They said had they known sooner, they might have tried to do something about it. Saying he was also surprised by the decline in values, he said he informed councilors as soon as the assessor’s office presented him with the numbers.

“I didn’t realize it was going to be that significant,” Kezer said. “It’s when they finished their work and the state has checked it that their numbers are valid, that’s when they briefed me. So (the councilors) learned about it shortly after I did.”

Kezer explained that the assessor’s office has to collect the data, validate it and have it certified by the state before any conclusions can be drawn. This process takes several months, and there wouldn’t have even been useful preliminary numbers to work off of during budget season in June.

Even though he believes the focus should be on the tax bill, Kezer did say he would like to see the tax rate reduced in the future. Going forward, he said he hopes to combat the perception that Amesbury is too expensive by changing the conversation and focusing on the schools, the atmosphere and everything the city does well.

“As far as branding, we need to get back to what our strengths are,” Kezer said. “There are a lot of them. We just need to be talking about them.”