The Natick Select Board’s annual vote on whether to keep the town’s single tax rate for residents and commercial property owners has all the drama of Board votes on public safety employee promotions. Year after year, the single tax rate remains.
But in the wake of the town’s $7M override and ever rising residential property taxes (based in large part on rising property valuations despite the actual tax rate declining), the Board is following up on a pledge to give even more thought to whether the town should stick with a single tax rate that applies equally to residential and commercial property owners or possibly shift more of the burden onto one or the other. The Board discussed the issue at length during its July 9 meeting.
Board Chair Kathryn Coughlin emphasized that the Board gives serious thought to this topic each year, though here is looking to get a jump on the matter and take an even more thorough approach.
Natick staying with single tax rate for residential & commercial property owners (November, 2024)
Town Administrator Jamie Errickson raised the question of what the Board seeks to accomplish: Give residential property owners a break? Spur economic development? Or something else? He added that the Board and town should also explore other possible tools available to address tax concerns (residential exemptions beyond those offered to seniors and veterans perhaps).
The Board isn’t making any rash decisions on this, but is planning to do some preliminary research to better prepare individual members when they vote in November after hearing the assessor’s report. Longer term, the Board might hire a consultant to research the topic and give the Board more data to make its decision the following year.
“There’s a lot [of information] to be gathered to do this justice,” said Board member Linda Wollschlager.
Research will include looking inwards, getting baseline data on how Natick’s commercial and residential tax base has grown over the past 10 years. It will also entail looking outward, such as reviewing communities that have a split tax rate and the impact on economic development and residences.
This could include looking at the breakdown of commercial properties in those communities vs. Natick based on whether it is retail or not, said Board member Rich Sidney. He pointed to Burlington as an example of a municipality with a split tax rate and a much larger non-retail commercial tax base than does Natick (Burlington has much higher commercial than residential property tax rates). Members discussed possible scenarios, such as the town’s largest tax payers perhaps seeking abatements if Natick were to adopt a split tax rate.
“Each of us has to evaluate those unintended consequences and the downsides” of splitting the tax rate, Sidney said.
Research could also look at the use of tax increment financing (TIF) by communities to incentive redevelopment, etc. (Errickson said he’s not the biggest fan of TIFs, from his experience working in Everett, as he said the tax burden gets shifted from the largest to smallest tax payers.)
Input from businesses and residents would be sought as well.
The discussion started with the thought of divvying up work among Board members so as not to place undue burden on town staff, and possibly forming a subcommittee or working group. There was talk of having a section on the Board agenda reserved each week for updates on this topic.
The Board took comments from the public as well, and former Town Moderator Frank Foss raised the idea of the town hiring a third-party firm to handle at least some portion of the research. “There are some impacts and consequences that are too huge not to get somebody in that can do full-fledged research on this,” he said. “I think it would be money well spent.”
While communities can split or un-split the tax rate year to year, Foss and others said once you split the rate, it’s going to stay split for a spell.
The idea of hiring a consultant was well received by the Board, though that wouldn’t discount Board members doing preliminary research, and then coming up with a scope of work if a consultant were to be hired.
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Splitting the tax rate is a no-brainer and should have been done long ago in Natick which has such a large commercial base. Individual homeowners are carrying the burden of increased police and fire calls that these huge commercial districts require. Individual homeowners are not making profits off their homes.
I welcome a review of the tax situation. The tax increases I have seen far exceed inflation and are unsustainable. I am past retirement age with no kids in the schools so forcing me out with high taxes will likely raise costs to the town as kids are likely to move in. An increase in the value of a property is a burden, due to increased taxes and insurance, until the homeowner sells and moves away. There is no financial benefit of a higher valuation to homeowners who stay. Perhaps there should be a discount for homeowners who do not have kids in the schools. This seems like a more equitable arrangement. As for the senior discount, that only applies to those seniors who are retired or have a very low income, and with the taxes as high as they are, I need to keep my professional job so won’t be seeing that discount. Perhaps the discount should be for all seniors over a certain age (70?) regardless of income and starting at a younger age (55?)for lower income seniors. Just some thoughts. Or, costs could be more aggressively targeted.