It’s that time of year again. Next Thursday, the 20th, at 7 p.m., the City Council will be hosting a public hearing where the City Assessor will make a detailed presentation about property values and tax calculations. This is your chance, as residential and commercial taxpayers, to express your opinions about the tax shift and your tax burdens. Please show up and participate, or write a brief detailed email or letter to any, or all, of your City Councilors. Your input really does make a difference!
In the weeks following this meeting, the City Council will meet and discuss several options before recommending a tax burden and “shift factor”. The shift factor is a way of transferring tax burden from residential property to commercial property. Last year, the shift factor was set at 1.63, which meant that residential taxpayers received discounts of about $6.5 million, and commercial taxpayers paid about $6.5 million more than they would in a flat-rate system. This resulted in a residential tax rate of $18.18 per thousand, and a commercial tax rate of $33.84 per thousand.
The Chamber of Commerce and business owners generally attend this meeting and communicate with the City Councilor before the meeting. Businesses in Westfield have high tax rates when compared to residential, or to some of the rates in our neighboring cities and states. This added burden does affect many businesses, and it does affect their site selection process. Because residences are worth much more than businesses in town, in order to give homeowners a $2.58 per thousand discount (based on that shift of $6.5 million), the city has to charge businesses $13.08 per thousand more. This really bothers many business, particularly when they don’t receive the same level of services as residents. They are eager to lower the shift factor. It should be noted that the shift factor and tax calculation is quite complicated, and it depends of the differences in valuations between the various classes of property. A 1.63 factor does not always result in the same burden shift, or in the same tax rates, or even the same tax ratios (commercial / residential). A 1.63 one year may be equivalent to a 1.61 or 1.64 factor another year.
This year, at budget setting time, the City Council voted to cut the mayor’s budget in order to prepare to decrease the amount of taxes that everyone would have to pay. In order to accomplish this, we are going to have to use some of the “Free Cash” or “Stabilization” reserves that we have to pay for some employee benefits later in the year. I believe we are in a good position to follow-through on these plans in the coming weeks.
Recently, the state confirmed that our Free Cash from last year was $6.2 million. Though this sounds like a big number, but due to budget shortages during the year, we withdrew $1.67 million from stabilization (because expected spending exceeded expected revenues). Therefore our net is really $4.53 million. Then, we received a one-time bond premium of $3.8 million (that we have to pay back over time with interest), a big increase in excise (vehicle) taxes of $668 thousand, one-time homeless student transportation funding increases, FEMA storm reimbursements, and the law department and collectors managed to collect on a lot more delinquent taxes than expected.
In the end, it worked out well for the city, but in my opinion, that $3.8 million should not be counted as “Free” cash. It’s money we will have to pay back over time with interest. Instead of leaving that money in the Free Cash or Stablization accounts where the city can spend it, I’d prefer to give that back to taxpayers. Ideally, I’d like to use it to pay off some of the associated debt, or to pay down some of the gigantic snowballing unfunded obligations related to pensions and long-term benefits, but there does not seem to be enough support on the council or in the mayor’s office for that. So, the next best thing for me, and something I’m sure everyone in town would like, is a tax reduction. This really can happen. The math does work, and we have the reserves to do it.
Please support the efforts to lower your taxes.
In closing, I’d like to wish everyone Happy Thanksgiving! I hope you have a wonderful time with your family and friends.
Regards,
Dave Flaherty
Westfield City Councilor
[email protected]
PS. I’m not a big shopper, but I know Thanksgiving leads into Black Friday. I’m not a fan of Thanksgiving night retail openings, and I’d encourage everyone to spend time with their families, and to allow the employees of the retail stores to do the same. Please support local small businesses whenever possible this holiday season.
Disclaimer: The views expressed in this column are those of the author and not the staff, editor, or publisher of this publication.
