West Newbury city supervisor predicts 3.5% tax improve | Native Information

0
65
West Newbury town manager predicts 3.5% tax increase | Local News

WEST NEWBURY — Town Manager Angus Jennings is predicting a 3.5% increase in the tax rate for the next fiscal year.

“Based on all known and estimated amounts, I recommend adopting a tax rate of $14.93 for fiscal year ’21,” Jennings told selectmen this week. The current tax rate is $14.42. It’s not the “worst-case scenario,” Jennings said, but he acknowledged, “It will be a noticeable increase for homeowners.”

Town officials hoped to keep the rate increase to 2%, but Jennings said the estimated rate is based on four factors.

The fiscal 2021 budget increased by 3.9%  — or $619,524. Although there were increases in education spending — offset in part by the town’s school stabilization fund — Jennings reported that nearly 60% of the net increase is attributable to noneducation costs.

The reduction in one-time tax impact offsets from this year to next year also played a part.

Even with Town Meeting voters’ approval in October of transferring $220,000 in overlay surplus to reduce the new tax rate, the amount was well less than the $400,000 in free cash used to offset the fiscal 2020 tax rate and accounted for roughly 18 cents on the fiscal 2021 tax rate, Jennings noted.

A third factor Jennings mentioned was the impact of the pandemic on revenue estimates for the upcoming year.

During the budget preparation, nonproperty tax revenues were projected at $1,387,600, but revised projections resulted in a number closer to $1,272,550.

The 8.3% reduction is “entirely attributed” to COVID-19 impacts “on excise tax, permit fees, investment income, and rental income” accounting for approximately 12 cents on the fiscal 2021 tax rate, Jennings said.

Finally, Jennings cited “overly optimistic projections of assessed values” as a contributor. The fiscal 2021 new growth projections proved conservative — $167,000 projected vs. $241,000 actual — but the projections of an overall increase in assessed value were higher than actual — $40.7 million projected vs. $24 million actual.

“Increases in value were still healthy at 2.5%, but the use of a five-year average, which included the larger-than-normal value increase in fiscal year 2016, skewed this number upward, thereby reducing estimated tax rate impact earlier in the process,” Jennings explained.

He stressed that all estimates are subject to change, with the final rate determined by the state Department of Revenue once all requirements are met.

The town completed its final requirement Monday when selectmen met with the Board of Assessors for the annual tax classification hearing. Selectmen approved of the assessors’ recommendations to adopt a single tax rate and to not adopt the open space discount, the residential exemption, or the small commercial exemption.

In response to a question from selectmen, Jennings noted that despite this year’s economic downturn, late or nonpayment of property tax bills has not been a problem. Some taxpayers are paying later than the due dates, while others have entered into payment agreements in regular monthly installments with the penalties waived.

“It’s nothing that’s alarming,” he said.