PITTSFIELD, Mass. — Auditor Thomas Scanlon Jr. says the city's ability to tax will quickly erode over the next few years forcing it to either make significant cuts to the budget.
"You still do have some levy capacity in there but you should be thinking for future budgets," Scanlon told the City Council on Tuesday.
The auditor said there is $6.7 million in taxable capacity in 2016 but that is down from $8.4 million in 2015. In the next budget, close to $3 million is expected to be added because of bonds, shrinking the ability to raise taxes even further. If budgets continue to rise over the next few years, the city will lose its ability to raise taxes any more.
"You are going to be at your levy ceiling," Scanlon said.
The issue was first raised last fall by former Councilor Barry Clairmont. According to Scanlon, there are two state provisions at play — the levy limit and the levy ceiling.
The limit is calculated by adding 2 1/2 percent and calculated new growth to the previous year's levy limit. The ceiling is taking the previous year's total taxable value and multiplying that by 2.5 percent, a restriction in place to ensure that no more than a quarter of the total property values are being taxed.
This year, the ceiling is below the limit, providing a less movable Proposition 2 1/2 restriction — only an increase in total taxable value will raise the ceiling.
"With no growth, you are going to be there for a while. That $6 million, I feel, is going to shrink," Scanlon said.
Ward 1 Councilor Lisa Tully added that if property values decrease, that ceiling gets lower so the difference between the ceiling and the city's ability to tax could close in a hurry.
"In two years time, we could be there," she said.
Scanlon said to raise the ceiling by even $1 million will take the growth of something like a casino, adding multiple millions to the taxable value.
"The strategy isn't as simple as raise values or cut budgets. It is much more complicated than that," Finance Director Matthew Kerwood said. "We need to build reserves and that's a piece of this as well."
Kerwood said he is working with Mayor Linda Tyer on the budget now and is looking for a spending plan that "fosters an environment" for growing property valuations, building that reserve, and "reducing spending where needed."
"We are beginning the budget process so collectively we will be continuing to explore all of these options," Kerwood said.
Scanlon is particularly urging for reserves to be built up and that is mostly focused on the city's bond rating. Scanlon said the excess levy capacity — the $6.4 million the city can raise taxes — is essentially seen as credit or a reserve to bond rating companies. If that levy capacity disappears, that lowers the city's bond rating, he said.
He suggests adding money to a stabilization fund that creates a reserve to protect the bond rating so it isn't impacted as much if, or when, the city hits that levy ceiling.
"You still have that levy capacity but I want you to think about the '17 and '18 budgets," Scanlon said.
The issue was first brought out during the City Council's tax classification hearing. Clairmont, an accountant himself, brought the issue to the council and called for keeping more of the city's certified free cash in the coffers to build reserves. Of the city's $4 million or so in free cash, $2.25 million eyed to be used to offset the tax rate. The City Council ultimately reduced that to $1.5 million. In doing so, that raises the tax rates but builds the reserves.
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BRPC Committee Mulls Input on State Housing Plan
By Brittany PolitoiBerkshires Staff
PITTSFIELD, Mass. — Berkshire Regional Planning Commission's Regional Issues Committee brainstormed representation for the county in upcoming housing listening sessions.
"The administration is coming up with what they like to tout is their first housing plan that's been done for Massachusetts, and this is one of a number of various initiatives that they've done over the last several months," Executive Director Thomas Matuszko said.
"But it seems like they are intent upon doing something and taking comments from the different regions across the state and then turning that into policy so here is our chance to really speak up on that."
The Executive Office of Housing and Livable Communities and members of the Housing Advisory Council will host multiple listening sessions around the Commonwealth to hear input on the Healey-Driscoll administration's five-year strategic statewide housing plan.
One will be held at Berkshire Community College on May 15 at 2 p.m.
One of Matuszko's biggest concerns is the overall age of the housing stock in Berkshire County.
"And that the various rehab programs that are out there are inadequate and they are too cumbersome to manipulate through," he explained.
"And so I think that there needs to be a greater emphasis not on new housing development only but housing retention and how we can do that in a meaningful way. It's going to be pretty important."
Non-commission member Andrew Groff, Williamstown's community developer director, added that the bureaucracies need to coordinate themselves and "stop creating well-intended policies like the new energy code that actually work against all of this other stuff."
Downtown Pittsfield Inc. proposed angled parking on North Street and was pleasantly surprised that the city responded with an in-depth study and new plans — even if they don't include angled parking.
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Officials celebrated Arbor Day on Friday by installing a commemorative plaque next to the American elm sapling. This is a tree that James McGrath, the city's park program manager, said Presutti would have been particularly proud of.
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Albert Ingegni III was applauded for four decades of service on the Zoning Board of Appeals during City Council. Mayor Peter Marchetti presented him with a certificate of thanks for his commitment to the community.
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