November 18 2014

Selectmen Set Next Year's Tax Rate

By: Rich Hosford

The Burlington Board of Selectmen has set the FY15 tax rate. 


The board held its annual Tax Classification Hearing on Monday and set the residential and C.I.P. (commercial, industrial, personal property) tax rates for the following year. 


Burlington has a split tax rate, meaning that residents pay one amount and commercial, industrial and personal property owners, effectively meaning businesses in town, pay another rate. The big decision for the board is how to split the tax burden between residents and businesses. 


Members had a variety of options to choose from, presented by Town Appraiser James Doherty, Town Treasurer Brian Curtin and Town Accountant Paul Sagarino. 


The first major factor is setting the tax rates is to hit necessary tax levy to keep services, pay town employees and make payments on debt, among other expenses. This amount normally goes up each year. In FY14 the tax levy was $92,154,384. The tax levy the board chose for FY15 is $95,618,308 (the levy limit is at $99.9 million but the board did not choose to go up to that amount). 

To hit the tax levy the board had to set the two rates appropriately. The option the board chose was one of the two most balanced between the residential and commercial rates. The residential rate for FY15 will be $11.35 per $1,000 of assessed value and the commercial rate will be $29.40 per $1,000 of assessed value.  


The rates are actually lower than they were in FY14 where the residential rate was $12 per $1,000 of assessed value and the commercial rate was $32.24 per $1,000 of assessed value. However, because there was a reassessment this year and the total value of all property in town went up by a bout $522 million, property owners will still see an increase in their property tax. 

Residential tax bills are expected to rise, on average, by $115.93, or 2.49 percent, over FY14. 


When deciding on how to set the split between the residential and commercial tax rates, the board weighed its desire to keep the residential rate low so as not to burden residents but also did not want to raise the commercial rate so much that it would slow economic growth. Under the option the board chose the businesses in town will pay 60.6 percent of the tax levy and residents will pay 39.4 percent of the levy. 


Town Administrator John Petrin said he thought the split was fair. He pointed out that there is about $1.3 billion more value on the residential side, the commercial side still pays the majority of the taxes in town. He said that was fair because while having a lot of businesses in town is good in many respects, it also does carry a burden for residents (such as traffic). 


“When you look at the share of the value, the residential side has 62.7 percent, but in the end they are only paying 39 percent of tax levy because of the split,” he said. “If we had a single tax rate we would be charging 62% of the levy to residents. That’s a big swing.” 


Petrin added that if the town were to try and keep taxes much lower it might need to cut services that residents like. 

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