Mayor Thatcher Kezer III of Amesbury, in response to some disagreements with the Newburyport Daily News over the municipal tax situation in Amesbury, did a posting on Facebook rebutting the position of the paper. I have cut and pasted that posting into this posting, and have done so without his permission. I hope he does not mind.
The Daily News has made much of the “tax rate” in Amesbury, which is $20.24. Amesbury has a unitary tax rate, which means that it chooses not to shift additional burden onto it commercial base. The Daily News has focused on that number, calling it one of the highest in the state, and calling for tax relief for Amesbury. I did a post on this generic subject a couple of days ago, since tax classification time invariably brings calls to subsidize the tax rate by burning reserves. As I said in my earlier post that is the easy way out. But what about Amesbury?
The criticism of Mayor Kezer centers around that “tax rate” number of $20.24. As the Mayor points out in his post the number is not really relevant in measuring relative tax burden. The actual tax bills, and the property tax “levy” (the overall amount raised by the property tax in the City), are the proper standards of measurement. The tax cutting measure passed many years ago, Proposition 2.5, is supportive of that view. Because of the vagaries of individual property tax valuations Proposition 2.5 limits the overall “tax levy” increase to 2.5% annually (with new growth outside the cap). So when Citizens for Limited Taxation fought to impose fiscal discipline on Massachusetts municipalities they capped the overall tax levy. They left room for growth of 2.5% annually, which is now consistently under attack. Some folks prefer Proposition 0, which quite frankly is not realistic. Mayor Kezer has come in $1.8 million below that Proposition 2.5 levy limit, which is $1.8 million in tax relief for Amesbury property tax payers. When measured the correct way, as the Mayor points out in his post, Amesbury falls into the middle of the pack in terms of relative tax burden. There is no question that residential property taxpayers face a higher burden from year to year everywhere, not just Amesbury. The unitary tax rate leaves a higher portion of that burden with residential taxpayers in Amesbury than in some surrounding communities, but that is a policy decision for Amesbury.
The Mayor has built reserves of over $2.5 million in addition to the excess levy capacity, which means that Amesbury has “buying power” (my term) of about $4.4 million. That has led to the calls for the Mayor to “subsidize” the tax rate for property tax payers this year by substituting some of those reserves for property tax dollars. I don’t want to retake the ground covered in my last post but the Mayor called this “poor financial planning” in his comments to the Daily News. He is correct. Amesbury has just received a bond rating upgrade, to A+, from Standard and Poor’s Rating Services. I can tell you that rating increase comes, in large degree, from the City’s strong reserve position. Utilizing one time revenues as budgetary offsets simply postpones a budgetary day of reckoning, and creates an immediate budget shortfall in the following budget cycle. Want to give real property tax relief? Cut the budget! But calling for the insertion of reserves six months into the fiscal cycle, as the Newburyport Daily News has done, is truly poor advice. You can rest assured that when budgetary problems ensued, or when Amesbury suffered a bond downgrade the paper would likely issue a stinging editorial asking why Mayor Kezer did not properly plan for Amesbury’s future. The Mayor’s comments are below. The Daily News editorial is here.
Headlines Make the News
Things must be going too well in Amesbury. The Newburyport Daily News is back to writing headlines that stir up controversy with no substance. Yes, Amesbury’s tax rate is going up and yes, Amesbury has one of the highest rates, being the 10th highest residential rate in the Commonwealth last year. Last week, the Newburyport Daily News conjectured in an article that Amesbury was possibly going to be number one in the state with a “record breaking” tax rate. Both conjectures are wrong and I’m not sure what “record” they were referring to, but it sounded good.
Tax rates don’t matter, tax bills do. When ranking average single family tax bills, Amesbury was ranked 69th in the state. A respectable rank for the level of services we provide and for being listed along with several dozen western Massachusetts communities that barely exist as local government services go.
So here is a headline for the Newburyport Daily News to run, “40% of all Amesbury Residents to Receive Tax Cut.” Yes, so despite falling values, causing the rate to increase, many residential taxpayers will see their tax bills go down. Of those who are seeing an increase, 46% of those will see an increase of less than $200 for the year.
The average single-family tax bill will increase $128. For this “average”, we have invested $600,000 more in our schools and accelerated much needed infrastructure improvements. A portion of this “average” increase on single-family homes is a result of other categories of residential property values falling at a greater rate than the single-family homes. Most condominium owners will see significant cuts in their tax bills due to the 8% decline in overall condominium values. The single-family homes that will see the larger increases are the newer, larger homes, some of which have actually increased in value by nearly $40,000 in one year.
For many residents, they bought a house in Amesbury because it was affordable. It is that lower, affordable value that makes buying a home possible for so many. Divide that lower value into providing the services the residents expect and you get a higher rate than those high-priced communities that provide the same municipal services. What matters most then, is the amount of the tax bill to pay for those services. Amesbury is ranked in the middle of the pack when compared to our neighboring Essex County communities. There’s no headlines there.
Thatcher W. Kezer III