November 16 2020

FY21 Tax Rate Set and Average Resident Will See $245 Increase

By: Rich Hosford

The Burlington Board of Selectmen set the FY21 tax rate during its meeting on Monday evening and Burlington residential homeowners will see an increase in their bill. 


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 fiscal 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 Gary Gianino and Town Accountant John Danizio. 


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 June when they passed the budget.  This amount normally goes up each year and this year was no exception. In FY20 the levy was $117,292,075 and in FY21 it is $123,727,955 a 5.49 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. This year there was the added impact of the COVID-19 pandemic that has economically damaged both residents and businesses, prompting one member to suggest the board take the unusual step of meeting some of the levy using funds from the Stabilization account. 


Selectman Mike Runyan made the proposal, saying that due to the unprecedented times it makes sense to take the burden off the taxpayers by dipping into the town’s savings. 


“These are extraordinary times and I believe that to be an appropriate use of the Stabilization fund,” he said. “I know at this late hour this is a difficult thing to do but that would be my preference.” 


Members of the town’s financial team said this would be difficult to do at this juncture and still ensure the town hits all the deadlines to send out tax bills in January. Town Administrator Paul Sagarino said the real economic impact of the pandemic will be felt by the town in FY22 and that they could have further talks about different ways to assist taxpayers between now and setting the rate next year. 


He also said the tax levy was set last January before the pandemic struck and that they could look at possible cuts setting next year’s levy to keep it from growing as much over FY21. 


In the end the board went with “Option C” from the list of options presented to them, which kept the split almost exactly the same as before. In FY20 the business side paid 62.32 percent of the levy share and in FY21 they will pay 62.33 percent. The residential share is 37.66 percent. The board voted 4-1 to approve this option with Runyan voting against.


 Under this option both the residential and commercial increased slightly. Residents will now pay $9.95 per $1,000 of assessed value as opposed to $9.64 in FY20. Commercial taxpayers will pay $25.84 per $1,000 of assessed value as opposed to $25.54 in the previous year.


This, coupled with an increase in property values, means the average residential tax bill will increase by $254.42 in FY21, an increase of 4.49 percent. 


The town’s financial team pointed out that if Burlington did not have a split tax rate and both residents and businesses paid the same rate the average residential tax bill would be $9,275. 


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 eight other communities only Woburn has a lower rate than Burlington.


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