AMESBURY — Residents can expect to pay about $181 more on their property tax bill next year if municipal councilors vote to approve a recommended tax increase at their Dec. 1 annual tax classification hearing.
The average bill would increase about 3 percent, to $5,670. The average single-family home is valued at $319,200.
Commercial and industrial property owners would pay even more, with an approximate $933 increase in their average bill should the proposed 7.5 percent increase on businesses go through.
The tax increase is the unavoidable result of plunging property values brought on by a struggling national and local economy, Mayor Thatcher Kezer said. Under Proposition 2 1/2, local governments can automatically increase the total amount they collect through property taxes by at least 2.5 percent per year, regardless of whether property values rise or fall.
"Our values have gone from $2.2 billion to $1.9 billion," said Kezer yesterday, referring to the total devaluation of Amesbury's entire property base, which has suffered the effects of a bad economy along with most other communities across America.
"So given a set dollar amount, if the value goes down, the rates are going to go up."
The town has taken hits on just about every single revenue source except for excise tax, which has remained constant since last year due in part to the national cash for clunkers program, Kezer said.
"We're seeing a positive impact from that (Cash for Clunkers) program," Kezer said. "People did go out and take advantage of that. We were expecting a significant drop in the excise tax, and it came in at what it did last year."
But everything else from fines to fees to investment income on savings, has gone down.
"There are those things I have control over, like delivering the budget," Kezer said. "The factors I don't have control over are overall property values because of the economy."
Property tax bills have been a particularly hot issue in Amesbury for years. Homes in Amesbury, on average, are worth less than homes in other communities in the region. But the average tax bill ranks among the highest in the state. Last year, it ranked 59th highest out of 337 communities, according to the state Department of Revenue.
Last year, the net increase to residents' average tax bill was approximately $408, due in part to a $2 million increase in the 2008 budget, a shifting of the tax rate back from a split-rate to a single-rate system that made for a one-time increase in the residential rate, and a peak payment amount that came due on the high school and middle school projects. This year, those two projects are still factors, forcing an increase in the rate but will become less so from here on out as the payment on those bonds continues to come off its peak, Kezer said.
"The debt service has now hit its peak, and now it will begin to decrease," Kezer said.
The tax hearing is expected to revisit, as a matter of policy, whether Amesbury will hold fast to a single-rate tax system, though Kezer said councilors have not expressed a desire to change back to the system that was scrapped last year. Kezer said it will come as no surprise to anyone that he will endorse that Amesbury continue with a single rate system, which he said will ultimately decrease the burden on residential taxpayers as more businesses decide to locate in town.
"My recommendation as everyone knows is to keep it at the single rate," Kezer said.
Councilors are expected to consider the increase at their annual tax classification hearing Dec. 1, at 7 p.m. at Town Hall.
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