Tax Increase Affects Mostly Commercial Properties and New Growth; Some Homeowners to See Lower Bills than Last Quarter

By Kim Siebert MacPhail

Bruce Murphy, Chair of the Board of Assessors, brought good news to Monday night’s annual property tax hearing convened by the Selectmen: The average residential taxpayer will see only a minor increase of 1.05%, meaning that rates will go from $15.21 to $15.37 per thousand.The primary reason for this small increase is a rise in the value of commercial properties,with residential new growth as a contributing, but lesser, factor.

“For the first time in as long as I can remember, we have a valuation shift moving [from residential to commercial],” Murphy said. “Last year, 79% of the tax value in the town was residential/ open space. We’ve seen a slight drop [in that category] to 78.6% and that means a corresponding increase to commercial/industrial and personal property (CIP).

“What we’re seeing is a very, very small increase in the value of residential properties and we’re seeing a relatively larger increase in the value of the commercial properties,” Murphy continued. “If you recall last year and the year before, we saw reductions in commercial property in the range of 9 to 9½% both years, while the residential properties were holding their value, essentially. That led to significant shifts of the tax burden from the commercial/industrial sector to the residential sector. . . .This is the first time we’ve reversed the trend that has been going on for close to 20 years.”

“This is good news overall,” said Selectmen Chair Cathy Cordes. “It means that commercial is coming back a little bit. A very little bit—but a little bit.”

According to Murphy, a couple of large commercial property sales in 2011—the year on which this year’s property valuations are being based—had a material effect on commercial property tax calculations. “These sales allowed us to re-examine the [commercial] values,” he said.

New growth on the residential side also broadened the tax base, allowing a subsequent easing of the taxes on older, more established properties. Murphy mentioned two examples of new residential growth: the first phase of the Hartwell Farms condominium construction and new single-family homes on Abbott Lane, both completed in 2011.

Residential sales, though, were generally down for the period, but, as Murphy said, “If you’re not moving, you’re fixing,” and thereby increasing property value.

By and large, most of the new construction has been of the residential type, not commercial—a trend Murphy imagines will continue.

Town Manager Rick Reed added, “And because the preliminary rates were set on a higher number, you’re going to see an adjustment downward on the last two quarters [of the tax year]. On average, you’ll see lower bills—I don’t want to say everyone will, because some property values could have gone up—but overall, most people should see a decrease.”

Reduction of excluded debt was also cited as a factor for the downward adjustment. “As the debt, primarily from the high school, starts to ramp down, the excluded debt goes down,” Murphy pointed out. “The last two years were peak years for the high school.”

“This is a very nice Christmas present when you get your bill [in January,] said Cordes. “So, while we’re usually sitting here, trembling, trying to explain why the tax bills are the way they are, for a change, we’re going to have a very nice set of tax bills.

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