November 27 2018

FY19 Split Tax Set: Rate Lower but Bills Higher Due to New Assessments

By: Rich Hosford

The Burlington Board of Selectmen set the FY19 tax rate during its meeting on Monday evening and while property owners will see lower rates they will overall see a rise in their tax bills due to higher assessments.


The board held its annual Tax Classification Hearing and set the residential and C.I.P. (commercial, industrial, personal property) 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.


Board 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 to meet the tax levy to keep services, pay town employees and make payments on debt, among other expenses. The amount of the levy was approved by Town Meeting in May when they passed the budget.  This amount normally goes up each year and this year was no exception. In FY18 the levy was $106,921,270 and the FY19 levy is $112,128,115, a 4.86 percent increase.


The next consideration was the split tax rate and how much of the burden to put on the residents and how much on commercial properties. When deciding on how to set the split between the residential and commercial tax rates, the board weighs its desire to keep the residential rate low so as not to burden residents but also does not want to raise the commercial rate so much that it would slow economic growth.


“When we look at potential increases, we do it in such a way that the split between residential and commercial rates is the same as it has been in the past,” Chairman Chris Hartling explained. It is easy for residents to say that we should put more of the burden on the commercial side but we recognized it is a balancing act. There is a direct correlation between their success and their ability to rent space and have viable businesses. It is easy to say ‘go ahead and assign taxes in a certain way’ but we have to give business owners a chance to be successful.”


The board went with “Option B” from the list of options presented them, which kept the split roughly the same as before. In FY18 the business side paid for 61 percent of the levy share and in FY19 they will cover 62 percent. The residential share went from 38 percent in FY18 down slightly to 37 percent in FY19.


Under this option both the residential and commercial rates went down slightly. Residents will now pay $10.48 per $1,000 of assessed value as opposed to $10.62 in FY18. Commercial taxpayers will pay $16.98 per $1,000 of assessed value as opposed to $17.13 in the previous year.


However, due to rising value assessments the average tax bill will increase in FY19 over FY18.


“The tax rate will be reduced on both sides, however, as you know we are required by law to annually review the value of the property, and they are going up,” Doherty explained to the board. He said that last year the average residential home was valued at $477,600 and this year that average has increased to $502,500.


This means that in FY19 the average homeowner will see a roughly $195 increase in their property taxes.


Finally, those on Burlington’s financial team said that compared to almost all neighboring communities the tax rate in town is lower. Out of Burlington and 12 other communities only Woburn has a lower rate than Burlington.


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