are progressive property taxes worth considering?
Updated: Mar 25
Property taxes are the main source of revenue for our town. Each year, the Town's budget is divided among us, based on the assessed value of our homes. There are state contributions, grants, enterprise funds and other things that reduce the levy (the amount of money that we need to raise through taxation) but for the most part we, as residents and taxpayers, foot the bill. Our taxes pay for schools and teachers, the fire department and police, road maintenance and clearing, street lights and recreation facilities, and other community services.
We try to find ways to make the tax bill a little easier for folks through a few exemption programs.
For example, in fiscal year 2023:
23 people received the veteran's exemption, clause 22 a-f, $400 each
8 people received the veteran's exemption, clause 22E, $1000 each
3 people received the blind person's exemption, $437 each
7 people received the senior's exemption, clause 41C, $500 each
10 people received the surviving spouse exemption, $175 each
In total, 51 people received a tax break totaling $23,762.50. The state reimbursed Williamstown $12,912.50.
Thanks to Chris Lamarre, our Town's Tax Assessor for helping me out with these numbers.
We can do more!
We can't fully address equity without peeling back the layers of our tax policy and asking ourselves whether we are contributing to our Town's cost burden in a way that is fair and even handed. Towns are limited in their approach to taxation but there are some tools we can use.
The Select Board is currently exploring how to reduce the age limit for seniors' exemption and to increase the qualifying income and asset level so more seniors by pegging them to the Consumer Price Index (CPI). So more folks on a fixed income can benefit. Thank you - Andy Hogeland for leading this effort. We might see something at Town Meeting about this option.
There is a low income exemption that we might want to consider for the Community Preservation Act surcharge. The CPA program has an exemption option for:
persons and families whose annual income is less than 80 percent of the Area Wide Median (AMI) income qualify as low income, and
persons of the age of 60 or over whose annual income is less than 100 percent of the areawide median income qualify as moderate-income seniors.
About 85% of communities that participate in the CPC program have adopted the low income exemption.
We should thoroughly investigate whether the Residential Tax Exemption makes sense for our community. This exemption attempts to make a regressive property tax more progressive by shifting some of the tax burden within the residential class from owners of moderately valued residential properties to the owners of vacation homes, higher valued homes and residential properties not occupied by the owner, including apartments and vacant lands. Several Massachusetts communities have adopted this strategy. An initial assessment shows that with a small residential tax exemption, the most expensive homes of full time residents could see a mill* rate increase from about $16 to $17 while the lowest income homeowners could save $500 to $600 annually.
There is lots to unpack here but the potential is intriguing.
I promise to ask tough questions, to investigate, to seek out ways to make our tax policy as equitable as possible.
* mill rate is the amount of tax you pay per $1000 of assessed value.