Classification Hearing FY2013

7/31/2019 Classification Hearing FY2013

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Fiscal Year 2013

assi ication earing

Presented by:

William B. Mitchell

Principal Assessor


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PURPOSE OF THE CLASSIFICATIONHEARING

MGL Ch 40 56 Allows by vote of Selectmen/TownCouncil a shift in the tax burden between ro ertclasses.

The adoption of different tax rates for the differentc asses o proper es oes no c ange e o a axlevy for the community; it simply determines theshare to be borne by each class.


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SHIFTING THE BURDENThe share of the levy for the Commercial, Industrialand Personal Pro ert classes CIP ma be

increased by up to 50% as long as the residential andopen space classes raise at least 65% of what theywould have raised without the shift.

If the Minimum Residential Factor would be less than,

and must use a CIP factor less than 1.50.

Approximately 30 % of cities & towns have split rates.


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OVERVIEW OF THE REVALUATION & CLASSIFICATION

100% Fair Market Value, certified and auditedb Mass. De t. of Revenue

adjustments to be at 100% Fair Market Value,certified by Mass. Dept. of Revenue

After Valuation All ro erties must beclassified according to usage


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What Happens At The Classification HearingWhat Happens At The Classification Hearing

different issues

Selection of a CIP FactorOpen Space Discount

Small Commercial Exemption


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ISSUES FOR CONSIDERATION

. . . .

81.266% = Residential18.734% = Commercial/Industrial/Personal Property

Make-up of the Comm./Ind. Classes:% big business

% small business (Mom and Pop)

n us r a mpac anu ac urers


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Will an increase in the C & I propertiessignificantly lower the burden on the Res?

Will an increase in the C & I ro erties slow thedevelopment of big business, or drive smaller

businesses out of town?

Do the C & I Properties require any extra

municipal services?


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FOUR CLASSES OF PROPERTY

RESIDENTIAL COMMERCIAL

PERSONAL

PROPERTY


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YOUR TAX RATE

Tax Rate is Made up From:

Total taxable real estate and personal propertyTown meeting appropriations

State aid

Expenditures

ew rowDebt Exclusions and overrides


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LEVY LIMIT

Levy Limit The Maximum amount the Town can levyn a g ven year. e evy m t can grow eac year y percent of the prior years levy limit plus new growthand an Pro osition 2 overrides.

Maximum Allowable Levy This is the Levy Limit

plus Debt Exclusions or other adjustments allowable.

Excess levy capacity The difference between thelevy limit and the actual levy. When the Board of

e ec men s gn e orm a er e c ass ca onhearing they also acknowledge that they have beenadvised of any excess levy capacity for that fiscal year.


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OVERRIDES AND DEBT EXCLUSIONS

Proposition 2 Override

allowed under Proposition 2 .

Debt Exclusion Temporary increase

Proposition 2 .


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WHAT IS NEW GROWTH?

New Growth New Growth is the increase in propertyva ues ue to:

New construction

Improvements to properties

Subdivisions

New Condominiums

Re rn of exem ro er o he ax rolls


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New Growth is added to the levy limit andncreases t e owns tax ng capac ty.

It is formulated b multi l in the reviousyears tax rate by the total new growth in value

for each class.

Must be submitted to the Bureau of LocalAssessment annually and be certified prior to

se ng e ax ra e.


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FISCAL YEAR 2013 LEVY LIMIT CALCULATIONS

Fiscal Year 2012 Levy Limit $18,416,031

Subtotal $18,416,031

2.5% Allowable Levy Increase $460,401

FY 2013 New Growth $278,000FY 2013 Prop 2 Override $0

2013 Lev Limit $19 154 432

FY 2013 Debt Exclusions $ 1,848,733

. , ,

FY2013 Estimated Actual Levy $20,336,255


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FIVE YEAR NEW GROWTH TRENDS

Res. Tax CIP TaxTotal Tax

Fiscal

Year

es. ew

GrowthValue

row

Applied toLevyLimit

ew

GrowthValue

row

Appliedto LevyLimit

o a

GrowthValue

Applied to

LevyLimit

2008 $20,151,200 $220,454 $9,995,654 $173,302 $30,146,854 $395,378

2009 $12,998,900 $147,148 $11,088,024 $171,199 $24,650,124 $327,043

2010 $3,778,500 $47,836 $4,686,422 $69,078 $8,464,922 $116,914

2011 $9,996,800 $145,453 $2,515,970 $36,608 $12,512,770 $182,061

, , , , , , , , ,

2013** $8,916,500 $157,198 $6,852,069 $120,802 $15,768,569 $278,000


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UNDERSTANDING THE TRENDS

Residential growth increased this year,however it is to e rl to determine if it will

remain stable or continue to rise.Commercial / Industrial rowth has beendeclining since 2009, however; it appears to

have rebounded significantly.Personal Property growth was much higher in2008 due to the Appellate Tax Board decision

a a owe assessors o ax po es an w resover public ways to telephone and cable

.


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SELECTION OF THE RESIDENTIAL

u y

2013 is approximately 88.47

The RF used for FY2012 was 100

e resu t ng s t was .

For FY 2013 the CIP can shift to 1.50


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HISTORIC TRENDS

FiscalYear

% BeforeSplit Rate of

Residential &

% AfterSplit Rate

% Before

Split Rateof CIP

% AfterSplit Rate

CIP ShiftSelectedfor Year

Open Space

2007 82.7399 74.9729 17.2601 25.0271 1.45

. . . . .

2009 81.3813 78.9608 18.6187 21.0392 1.13

. . . . .

2011 81.7065 81.7065 18.2935 18.2935 1.00

. . . . .

2013 81.2660 - 18.7341 - -


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IMPACT OF SPLITTING THE RATE ON THE

AverageFY 2013

Value

Taxes @

1.00

Taxes @

1.15

Taxes @

1.25

Taxes @

1.40

Taxes @

1.50

Res=18.35 Res=17.72 Res=17.30 Res=16.66 Res=16.24

CIP=18.35 CIP=21.11 CIP=22.94 CIP=25.70 CIP=27.53

Residential $254,578 $4,672 $4,511 $4,404 $4,241 $4,134

Commercial $675,298 $12,392 $14,256 $15,491 $17,355 $18,591

Industrial $1,165,373 $21,385 $24,601 $26,734 $29,950 $32,083

*Rounded to nearest $1


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SAVINGS OR COST IMPACT OF SPLITTING

Property TypeSavings orIncrease withFactor of 1.15%

Savings orIncrease withFactor of 1.25%



Residential -$ 160.00 -$ 267.00 -$ 430.00 -$ 537.00

Commercial $1,864.00 $3,100.00 $4,963.00 $6,199.00

Industrial $3,216.00 $5,349.00 $8,565.00 $10,698.00

*Rounded to nearest $1


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VOTE ON THE OPEN SPACE DISCOUNT

adopted by vote of the Board of Selectmen for allproperty that is classified as Open Space. Thisexemp on s orne y e res en a c asses oproperties, and will increase the residential tax rate

without affecting the Commercial/Industrial/PersonalProperty classes.


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Chapter 61, Chapter 61A or Chapter.

These Chapter lands are assessed ato e r a r mar e va ue or ower.

An additional discount would not benefit

Sturbridge or the taxpayer.


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1 A r f x l n f ll n f ir

cash value is $3,500 per acre X1 A r = A m n .

Same Land in Chapter 61A is valued

Valuation Advisory Commission.

10 Acres x $160 per acre = $1,600


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RESULTS TABLE FOR QUALIFYING RESIDENTSAVG. VALUE

RESIDENTIAL VALUE 100,000 254,578 300,000 500,000

EXISTING RATE 1,835 4,672 5,505 9,175

NEW RATE 1,555 4,616 5,516 9,476

SAVING RESULTS -280 -55 11 301

COMMENTS Good Savings Moderate Savings Minimal Savings Paying More Even With The Exemption

RESULTS TABLE FOR NON-QUALIFYING RESIDENTSAVG. VALUE

RESIDENTIAL VALUE 100,000 254,578 300,000 500,000

EXISTING RATE 1,835 4,672 5,505 9,175

NEW RATE 1,980 5,041 5,941 9,901

SAVING RESULTS 145 290 436 726

COMMENTS Moderate Increase Moderate Increase Large Increase Large Increase


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RESIDENTIAL EXEMPTION

RESULTS

HOME A HOME B

$254,578 Value $254,578 ValueQualifies Not Qualified

$4,672 No Ex em pt ion $4,672

$4,552 20% Ex em pt ion $5,474

, x em p on ,


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VOTE ON THE SMALL COMMERCIAL

The other option for the Board of Selectmen

up to 10% to certain small commercial

properties.


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Shifts the tax rate between propertiesoccupied by qualifying small businesses ontothe other commercial and industrialproperties.

Does not have any effect on the residential

an persona proper y ax ra es.


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QUALIFICATIONS FOR THIS EXEMPTION

A Property:

Must Be Assessed at less than1,000,000 and employ 10 or less

employees.

Does Not have to be owner occupied.

For Multi-business parcels all businessesmust ualif .


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QUALIFICATIONS FOR THIS EXEMPTION

.

Must be classified as commercial ormixed use commercial.

*Industrial properties do not qualify, but

is adopted.


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Approximately 90 business are on the list sent toSturbridge by the Department of WorkforceDevelopment.

Businesses not on the list can be qualified byapplying directly to the Board of Assessors.


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BASICS OF THE COMMERCIAL EXEMPTION

(Cont.)

An exemption of up to 10% can be votedon at the classification hearin b the Boardof Selectmen.

Percentage must be voted annually.


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APPLYING THE EXEMPTION TO

STURBRIDGE

Research done last year indicates thatapproximately 33 properties out of 90 may qualifyfor this exemption.

The total valuation is approximately $13,030,900.A 5% shift would change the commercial/industrialtax rate by approximately $0.07

A 10% shift would change the tax rate byapproximately $0.14


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SMALL COMMERCIAL EXEMPTION RESULTS

BUSINESS A BUSINESS B

$675,298 Value $675,298 ValueQualifies Not Qualified

$12,392 No Ex em pt ion $12,392

$11,379 10% Ex em pt ion $12,489

, x em p on ,


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BOARD OF ASSESSORS RECOMMENDATIONBOARD OF ASSESSORS RECOMMENDATION

(Voted(Voted 08/20/2012)08/20/2012)

The Board of Assessors recommend thatThe Board of Assessors recommend that

the Select Board:the Select Board:

1)1) Vote to adopt a Single Tax RateVote to adopt a Single Tax Rate

2)2) Vote not to adopt the Open Space DiscountVote not to adopt the Open Space Discount

3)3) Vote not to adopt the Residential ExemptionVote not to adopt the Residential Exemption

4)4) Vote not to adopt the Small CommercialVote not to adopt the Small CommercialExemptionExemption

Classification Hearing FY2013

Documents

Transcript of Classification Hearing FY2013