classification hearing fy2013
TRANSCRIPT
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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 $1
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SAVINGS OR COST IMPACT OF SPLITTING
Property TypeSavings orIncrease withFactor of 1.15%
Savings orIncrease withFactor of 1.25%
Savings orIncrease withFactor of 1.40%
Savings orIncrease withFactor of 1.50%
Residential -$ 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