By Julie McCay Turner
Because of delays in preparing its final tax data in this residential and commercial revaluation year, Bedford residents have received three “preliminary” or estimated real estate tax bills based on FY2017 valuations, with an actual fourth quarter bill based on FY2018 numbers still to come.
The Assessors met with the Selectmen on Monday, January 8 to share cautions and concerns about the Tax Recapitulation Sheet (the recap) which had then yet to be filed.
Chair of the Assessors Zoe Pierce expressed concern that the recap might not be filed as planned on Friday, January 12 and others in the meeting voiced suggestions and asked “doomsday” questions based on earlier missed deadlines.
In a subsequent interview, Pierce added, “The Assessors fully own this problem, but acknowledge that the DOR has been completely supportive in guiding us through this process.”
During Monday’s Selectmen’s meeting, it was agreed that Town Manager Rick Reed would attend the Assessors Thursday meeting and participate in a conference call with the consultant hired by the Assessors to finalize the data supporting the FY2018 recap.
Thursday’s Assessors meeting was attended by Reed, Finance Director Victor Garofalo, and several members of the Finance Committee who had ample time for questions to be asked and answered.
In a telephone interview after Thursday’s Assessor’s meeting, Assessor Ron Cordes said that the requested data promised for Friday was delivered.
With the recap data now in the hands of Department of Revenue for review, conditional certification is expected to be issued within 10 business days. There will then be a 5-day public comment period.
The final step in the rate-setting process is a formal classification hearing, now tentatively scheduled as part of the February 5 Selectmen’s meeting. Based on a financial model showing variables over which the town has control, the Selectmen will make recommendations, and Bedford’s 2018 tax rate will be established.
Background on the Tax Rate Setting Process
Bedford voters determine the Town’s expenses for a given fiscal year by the spending levels agreed to during Annual Town Meeting in March and the adjustments that are finalized during Special Town Meeting in November.
The Assessors are responsible for establishing the value of the town’s assets – residential and industrial property, commercial personal property, open land, and other variables.
Residents and businesses are responsible for supporting their fair share through the tax levy.
According to MASS.GOV, https://www.mass.gov/files/documents/2017/09/13/Chapter5.pdf:
A municipality’s tax rate is the amount of its annual property tax levy stated in terms of a unit of its tax base. It represents the amount per $1,000 of assessed valuation of taxable real and personal property that will generate the property tax levy for the year.”
To set a tax rate, a municipality must submit a “Tax Rate Recapitulation Sheet” (the “recap”) to the Bureau of Accounts (BOA) in the Division of Local Services (DLS) in the Department of Revenue (DOR). The recap displays a municipality’s entire budget plan for the fiscal year. It summarizes all appropriations made by the legislative body since the previous year’s tax rate was set. Anticipated and actual sources of revenue other than property taxes, such as state aid, local non-tax revenues, and reserves, are also identified. The difference between the appropriations and revenue from these sources must be raised through property taxes. This difference is the tax levy.
DOR reviews the recap for the following:
- Values are final, tax base growth has been certified and classification options selected are within the law.
- Required forms are complete, with the signatures of appropriate officials.
- Estimated receipts are reasonable. Based on the history of actual collections, or other information, a municipality can expect to collect amounts used.
- Overlay reserve is reasonable. Based on history, the amount reserved is sufficient to fund expected abatements and exemptions.
- Budget is balanced and tax levy is within Proposition 2½.
Communities unable to submit final tax rate data . . . because of revaluation delays should plan on using preliminary bills to ensure adequate cash flow. Communities . . . using a quarterly payment system may issue a third-quarter preliminary bill, with the approval of DOR.
Tax rate setting requires the written approval of DOR and tax bills cannot be mailed until DOR has signed the tax rate recap.
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