WHITMAN – The Select Board on Tuesday, Nov. 15 voted, in agreement with the Board of Assessor’s recommendation, to maintain a single tax rate for all property classifications for fiscal 2023.
Neither the residential nor small commercial exemptions were approved, as has been the board’s usual course of action.
The excess levy capacity is estimated to be $286,521.94.
“That was calculated last week [before the Nov. 14 special Town Meeting],” said Assessor Kathleen Keefe. “That number is going to change.”
Interim Town Administrator Frank Lynam said the number should go down a little bit because of corrections the town is making, including funds from the DPW as indirect charges and they are not supposed to be assessed that way. After the Town Meeting votes are entered and the Department of Revenue (DOR) approves corrections on estimated revenue, a final number will be available.
“We have more than one variable going on,” Keefe agreed.
“The revenue estimates are going to change slightly, too,” Lynam said. “This process is intended to give you an idea of what happens if you tax everyone the same or you tax people differently.”
The actual tax rate is set after the board decides how to assess and the assessor compiles all that information.
“There’s not going to be a huge difference,” he said. “I learned a long time ago, don’t tell people what the tax rate is and then change it.”
“This is not the tax rate,” Keefe said.
Keefe presented her annual report concerning the town’s options regarding how the town’s fiscal 2023 tax rate would be set for the property classifications – residential, commercial, industrial and personal property, referred to by the shorthand CIP.
The DOR reviews and approves the adjusted values approved by the assessor’s office.
The assessed residential value is based on a comparable sales market analysis, which looks at the prices for which properties sell each year to determine a property’s worth. Commercial value is based on income and expenses incurred by businesses as well as sale prices for properties analysis. Assessments are set on values as of Jan. 1 each year.
A more in-depth analysis – which Whitman underwent in fiscal 2022 – is done every five years.
The DOR approved the following valuations for Whitman in fiscal 2023: $2,007,037,255 for residential value or 89.69 percent of the town’s total valuation; the other three classes combined total 10 percent of the total valuation or $130,891,654 – $110,906,557 for commercial; $26,240,515 for industrial and $93,554,562 for personal property.
“That’s [the residential to CIP ratio] an important ratio that the board looks at when they’re trying to determine whether or not to split the tax rate or go with a single tax rate,” Keefe said.
She said there has been some industrial growth this year – in the form of 11 warehouse condos on Bedford Street, on land that had already been classified as industrial, so they were calculated that way.
Keeping in mind that the numbers she presented regarding the fiscal ’23 tax levy will be changing following the Nov. 14 special Town Meeting, Keefe used figures approved at the May Town Meeting to demonstrate what tax rate shifts would look like.
The town voted in May to raise $48,404,502.82. Subtracting $18,046,704.76 in estimated receipts puts the town’s tax levy at $30,357,798.06.
“To come up with a tax rate, it’s simply that $30 million divided by the valuation that was approved [by the DOR],” Keefe said. “That gives us a tax rate.”
Towns are allowed to use a shift in tax rates between 1 and 1.5 percent. With a 1 percent shift, all taxpayers pay the same rate. A 1.5 percent shift reduces residential rates while increasing rates for the other classes.
Whitman does not tax open space.
If the board approved small commercial exemptions it would affect only sole owners or partnerships with no more than 10 employees and a total property value of $1 million or less. The business must be certified by the Dept. of Labor & Workforce Development. If a business owner does not own the property the company occupies the tax benefit goes directly to the property owner instead.
“It’s really difficult to track and businesses we’re talking about are just run out of someone’s home,” Keefe said. “It’s really muddy water, so the board [so far] has voted not to recommend that option.”
A residential exemption shifts the tax burden from lower-priced homes to higher-priced homes. The Board of Assessors recommended against that shift as well.
Resident John Galvin asked about several new “split-use” buildings with retail businesses on the ground floor and apartments on upper floors.
Keefe said they are classified as mixed use, with each use tallied in the proper classification.
“It’s a single valuation,” she said. But the valuations for the commercial space would go into that classification and the remainder into residential. “The bill is going to be the bill no matter which class of property.” With two public construction projects moving forward during tight budget times, Galvin said they would present a “significant impact to the taxpayers.”
“I’m not sure that there’s anything we can do here that’s going to affect, necessarily, the impact of these project, but we have to do something,” he said. “We’re kind of stuck at what we can do here. … I would make a suggestion that a residential exception, not necessarily this year, but in the future, is something that we need to strongly consider.”
With two large debt exclusion votes coming, Galvin argued the town has to think about the people who can least afford it. He suggested something like a budget override committee – not necessarily called that – to evaluate what the town can do somehow increase revenue that evaluates who is going to get hit the hardest and what can be done to help taxpayers who can’t afford increases.
Lynam said any shift in commercial taxes would be significant and there would be nothing to keep those businesses in town.
“I have yet to come up with an example where it would make more sense for us to shift the tax burden because the businesses we have in this community are very small,” he said. “All the big businesses are gone.”
Lynam did agree that this year’s new growth was disappointing and he doesn’t expect it to get much better next year.
“We’re going to have to get more creative,” he said.
That challenge, Galvin said was his only reason for commenting.
Budget Committee member and Selectman Shawn Kain said he hears the message and noted that discussion about creative revenue options is being discussed.
Select Board member Justin Evans said Galvin makes a good point on the question of the residential exemption.
“It’s probably something I’ll think about for the next year,” Evans said. “If this board complies with the MBTA communities, really revitalizes east Whitman and sees an increase in more mixed-use development, more rental properties, that’s probably something we’ll want to look at as a way to save the families that need it the most.”
With Town Accountant Kenneth Lytle moving into the treasurer/collector position, the board voted to appoint CPA Eric Kinsherf as a consulting accountant until the town hires a permenent person.
Town Administrator Frank Lynam made the recommendation, saying he met two weeks previous to the board meeting with CPA Eric Kinsherf, who is a Whitman native. His practice specializes in advising, providing accounting services for municipalities, forensic accounting and other financial services.
Kinsherf has offered to serve as a consulting accountant for 90 days or until the town hires it’s own accountant. His hourly rate is $115 per hour and the responsibilities would “probably require the better part of a day per week” to accomplish what the town needs done now, Lynam said, recommending he be hired under a consulting agreement. The existing town accountant salary line will cover that cost.