Following up on my scintillating Jan. 26 My Turn, “A Take on Greenfield’s Tax Rate,” let’s examine a split tax rate for Greenfield.
Again, the 2022 rate-setting process: Greenfield approved a budget (about $67 million), then the assessors calculated the “levy” — the net amount to be raised in local property tax (real and personal) by deducting projected local, state and other revenue from the budget. The levy for FY2022 is about $37 million. The tax rate is set by dividing the levy by the overall value of the city (about $1.6 billion in 2022), giving us a $22.30 per $1,000 value rate for this year. Your bill equals your property assessment (value) times the rate.
Greenfield’s rate is the third highest in the commonwealth for 2022. This could mean we’re spending too much — or it might, as I suspect, mean that our property just isn’t worth much. Take my $150,000 house here and magically plop it down in, say, Concord, and it’d be worth at least twice as much there. Does it cost twice as much to pave the streets, pick up the trash, etc.? I doubt it. Concord’s rate is $14.76 — the town’s value is 90% residential, but those houses are worth a whole lot — their average single-family tax bill is $16,661. Whoa!
Greenfield’s average single-family tax bill is $4,938 while the median for the state equals $5,646. For North Adams it’s $3,105, Montague $3,941 and Gardner $4,423. Note Montague and North Adams both have split tax rates, Gardner doesn’t. This ranks us just at the bottom one third in the list for single-family tax bill amounts statewide.
Levies vary greatly due to school costs, size of community, miles of roads, more or less aid, utility tax revenue (think Rowe and Erving) pension obligations, etc. So how does our spending stack up? Divide the levy by the population and the state median is $2,718 per capita, Greenfield equals $2,094 — the bottom quarter of the list — we don’t spend all that much. How about the levy per capita as percentage of per capita income? (now, there’s a statistic) State median equals 6%, Greenfield equals 9%, top 1/5th of the list — so we are carrying a bit of a burden as we are relatively poor, ranking in the bottom 10th of per capita income in Mass. All these stats are from the Mass Dept of Revenue’s data bank.
How to ease the burden? Split the tax rate? That is, create one for residential property and another for the other classes of property: commercial, industrial and personal or “CIP”. This year, there are 117 cities and towns with split rates. In Franklin County, they include Erving, Monroe, Montague and Rowe (remember, personal property includes stuff like utility co. equipment) and, nearby, Hadley and North Adams.
What are the values of the different classes? Of the $1.6B that Greenfield is worth, 75% is residential property and the rest (25%) is CIP. Here are some nearby towns: Athol 85% residential (residential rate equals $16.05, not split), Gardner 81% residential (rate equals $18.59 not split), Montague 67% residential (split rate: $16.76 residential / $25.83 CIP), Hadley 70% residential (split rate: $12.18 residential / $13.45 CIP). The less CIP value, thereby, more residential, the less reason to split the rate. Montague and Hadley are interesting cases: in Montague, the two rates are $9.07 apart, whereas in Hadley it’s a $1.27 difference. More of Montague’s value is in CIP (33% vs. Hadley’s 30%). Given that larger difference in rates in Montague, 42% of their levy (the money raised from local property tax) comes from CIP vs. 33% of the levy in Hadley. Montague homeowners get a bigger break, picking up only 58% of the tab, Hadley folk fork over 67% of the levy.
For what it’s worth (so to say), the median statewide percentages of total levy in communities that do split the rate is 75% residential, 25% CIP. In Greenfield, with one rate, that’s exactly where we are now. So, what would be fair? How much is self-defeating by undermining the commercial tax base?
OK, to paraphrase Mark Twain: There are lies, damned lies — and then there are statistics. I have no answers. Should Greenfield split its tax rate? If so, take Hadley’s model? Montague’s? Or, once again, just forget the whole thing for now. It’s a tough call.
Henry Leuchtman lives in Greenfield.