Our View of the Times – February 5

On February 5, 2014, in Latest News, by The Somerville Times

powderhouse_viewThe Devil is in the details, but so, too, is the truth.

Knowing the details is knowing the facts, and knowing the facts is key to understanding issues and situations.

D’uh, right?

For example, as much as the potential loss of Patsy’s Pastry Shop may be a sincere and legitimate cause for sadness, the fact that the owners of the business also own the building may not minimize the personal and historical impact on residents of its demolition in the near future, but it does change the narrative from one of eviction and displacement to one of perhaps being made an offer they couldn’t refuse.

Likewise, the concern and furor over skyrocketing tax bills has led to comments about through-the-roof tax increases in some cases, and that’s not exactly accurate.

Tax bills are calculated on an A-times-B equation. The tax rate (“A”) is multiplied by $1,000 per assessed value (“B”). The actual tax rate, by state law, cannot increase beyond 2.5 percent (barring a voter-approved override). What has happened in Somerville is not that the tax rate has dramatically increased; it is that the “B” in the equation has gone up. In simple terms, and not to be patronizing, when “A” (the tax rate) is multiplied by “B,” the final figure will obviously be much larger if the “B “ has increased. Whether that is the result of an economy coming out of the recession (remember, we were in one – a deep one – during the past few triennial valuation cycles) or a clever way to reap more while getting around Prop 2 ½ will remain hotly debated. Still, it is important to differentiate between skyrocketing tax bills and tax rates.

Acknowledging the facts doesn’t ease the pain, but at least it’s a starting point for a discussion that can at least be rooted in reality.

 

6 Responses to “Our View of the Times – February 5”

  1. wth says:

    Perhaps it would have been better had the city upped assessment values slightly each year, rather than waiting until the increase was intolerable. My real question is why (especially during the recession you mention) did our assessed value not drop? Another tax that only goes up.

  2. Anon says:

    If the assessed value (“B”) went up so drastically, why didn’t the tax rate (“A”) go down? (Or did it?) Perhaps I missed news coverage regarding the product of these two variables (the total tax levy…”C”), but I would like to hear more about changes in the total levy (“C”). Has it gone up or stayed the same? If it has gone up, by how much and where are the increased revenues going?

    When we hear about public dollars being spent to subsidize privately organized events (like the RadioBDC event in Union Square last fall), it raises questions about where all the money is going. Meanwhile, SHS, the library, and other public buildings have fallen into disrepair.

  3. Lou Lou says:

    What good does a February 4th hearing do when the abatement deadline is the 3rd?

  4. matt says:

    If you want to see something rich… look at the budget: http://www.somervillema.gov/sites/default/files/FY14-BudgetMaster.pdf

    The mix of A&B allowed for an ever increasing total tax levy C growing at 5% in 12-13 and 6% in 13-14. Its easy to get around prop 2.5 when assessments are growing at 20-50% a year

  5. matt says:

    One thing to consider regarding condo conversions. While an owner occupied 3 family may be assessed at 600k the owner receives 150k in residential owner exemption. When the building is converted to condos the assessment on each maybe 250k totalling 750k however each unit now gets the residential exemption. The city, rather than having 450k taxable now only has 300k taxable resulting in a net loss to city coffers.

    Had the exemption been based on land not on units the city may have been able to reduce taxes so that we were not hit so hard….

  6. ritepride says:

    There must be a stop put to expansion of tax-exempt land. Sen Jehlen, Rep. Denise Provost, and our other representatives on Beacon Hill should be filing appropriate legislation to protect Somerville whereas nearly 60% of the land in Somerville is presently tax-exempt. No city can survive and the most tax exempt land any city/town should sustain should be no more than 25% of the total land in that municipality.

    Also the citizens who care about their taxes should ALL be calling their aldermen demanding that their alderman votes NO on the sale of the Powder House Community School and surrounding land to Tax Exempt Tufts University. This is the only way right now to stop the sale and force the city to sell the land so that full taxes shall be received. If Tufts were truly and honestly friendly to the neighborhoods Tufts would be paying full taxes on the Western Jr High that they purchased for $1.00 from the city.

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