North Adams Sets Tax Rate; Warns of Hard Times

By Tammy Daniels
iBerkshires Staff
01:32AM / Wednesday, December 10, 2008

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NORTH ADAMS, Mass. — Residential property owners will see their taxes rise a little over 3 percent for fiscal 2009 but Mayor John Barrett III sounded warnings of rougher financial times ahead.

"We've cut but I do think we're going to have to do other things down the road," said Barrett. "This is the toughest year that I've faced as mayor and probably the toughest year the city has faced since Proposition 2 1/2 came in back in 1980, when drastic cuts had to be made back then."

The City Council on Tuesday night adopted several orders relating to the city's $34 million budget and levy limit that set tax rates for this fiscal year, pending certification by the state.

"This will result in an average tax bill increase, and I stress for the entire year, of $55," said Barrett. "The average homeowner will probably on the last two bills of the year see a difference of anywhere form $8 to $15 ... a very insignificant increase in consideration of the economy we're in."

Residential property rates will rise 39 cents to $11.71 per $1,000 valuation; that's still under the 2005 rate of $12.22. Commercial rates will rise 31 cents to $27.03.

A residence valued at $145,000 will see a rise of $55; a $200,000 home, $78.

Tax Rates

Year	Residential	Commercial
1999	15.64	28.75
2000	15.64	28.91
2001	13.99	28.12
2002	14.33	28.31
2003	14.69	28.22
2004	13.28	27.50
2005	12.22	28.76
2006	11.57	28.98
2007	11.13	26.62
2008	11.32	26.72
2009	11.71	27.03

"I don't see this as particularly debilitating," said Councilor Clark Billings. "If you can afford a $200,000 house you can afford $78."

The city will end the year with an excess levy capacity of $1 million, up $100,000 from last year, which the mayor said would be needed "with the way things are going in the state."

The council approved reducing the amount to be raised by taxation by $850,000 by appropriating $656,000 from certified free cash for the Department of Public Safety and $200,000 from the sale of land to pay down debt.

Little New Growth

But growth has been flat on both the residential and commercial sides; a bump in personal property because of a survey this year raised the levy capacity.

And the city's free cash is sitting at about $700,000, the lowest in about a dozen years, said Barrett.

The mayor said he foresees economic problems for next four or five years. The current crisis, he said, "hasn't really hit here yet."

"You hope that Lowe's comes through. You hope that they continue to do well over at Steeples City Plaza. You hope that [Massachusetts Museum of Contemporary Art] continues to expand because they pay taxes on their commercial areas," Barrett said. "I see us in a recession for the next three to five years. If we can stay flat with most other communities in Massachusetts, we'll do well."

The state is warning of up to 10 percent cuts in local aid in the coming year and the city has already lost a $1 million in net aid from the state since 2004. Any new cuts in state aid could range from $1.2 million to $2 million.

"We've absorbed that without putting it on the backs of our taxpayers," the mayor said. There's a freeze in the School Department, most other departments have been cut to the bone, and the city could see a significant decrease in excise taxes at the beginning of the year — as much as $200,000 — because people aren't buying new cars.

The city also won't know how the hotels and motels have done until the end of December. The fiscal picture could change just over the next six to eight weeks.

Charter School Drain

In addition, the "tremendous drain" of the Berkshire Arts and Technology Charter Public School is costing the city more than a $1 million because the state has failed to revamp the charter school funding mechanism.

Councilor Gailanne Cariddi asked what the councilors could do to advocate for the city. Barrett suggested supporting the area's two lawmakers, Rep. Daniel E. Bosley and Sen. Benjamin B. Downing, in finding new revenue sources. But, he said, "the biggest and most important is the charter school funding."

Meanwhile, the city and its residents have to prepare for massive cuts in aid that will have to be made up somewhere.

"I don't know where it's going to come from or how we're going to raise the resources," said Barrett. "But it's going to be our job to find solutions. ... It's not going to be easy."

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