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The City Council on Tuesday set the tax rate for fiscal 2020.

North Adams Sees Tax Rate Fall as Values Rise

By Tammy DanielsiBerkshires Staff
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Assessor Ross Vivori says property values are calculated on sales. The presentation made by the administration can be found here.
NORTH ADAMS, Mass. — The city's tax rate is going down but homeowners may still see a rise in their tax bills of about $128 on average because values are going up.
The City Council on Tuesday approved to continue a split tax rate and to set the commercial shift at 1.71. That will reduce the residential tax rate to $18.62 per $1,000 valuation, down 49 cents over last year, and the commercial/industrial rate at $40.67, down 94 cents from last year. 
The value of the average home has gone up by nearly $10,000 — from $138,780 to $149,301. That means the average bill will rise from $2,652 to $2,780.
The total value of the city rose nearly $43 million, from $725,324,333 to $768,014,087 after being generally stagnant from fiscal 2017 to 2019. The bulk of the value is being seen in residential, which rose nearly $32 million, and personal property, which is up about $9 million. Industrial values remained flat and commercial values increased about $2 million.
Assessor Ross Vivori said the bump in personal property values is largely because of utilities, with Berkshire Gas, National Grid, New England Power and Massachusetts Electric seeing significant growth. 
"In addition, you know, to some of the new businesses that have opened up in town," he said. "So, that's a good number."
Vivori explained residential values are based on a percentage of sales going back at least two years. 
"When we look at those statistics, they're telling us whether values need to go up or down," he said. "When you do that analysis, it tells us if you are selling overassessed, selling overassessed, selling overassessed — obviously assessments need to be raised."
Councilor Jason LaForest, who had asked about the values, said, "so just to be clear, the city can't say, well we need X number of dollars so we're going to bump the assessment up on personal homes to meet that need ... We do have to look back at a trend over several years to set the assessed value."
Vivori responded that was correct, that it required "supportive statistics."
"We're bound by Massachusetts tax law and the guidance and rules set by them," he said. "The procedure is to look at all homes that are arm's length sales ... when we look at all the sales, if the markets are trending up their values go up ... if someone fixes up their house and the sales are trending down, their values will go down."
The total values also include improvements at a number of companies and projects, although their tax burden may be different. The Beyond Place (Tourists) and Greylock Works are currently being taxed on their incremental growth; a tax incentive for Crane & Co. has ended and one for Tog Manufacturing (Stanley Fasteners) doesn't kick in until next year.
The councilors did discuss the possibility of returning to a single rate because of the tax burden on businesses. North Adams had the highest commercial tax rate in the state in fiscal 2019, followed by Pittsfield. By contrast, North Adams ranked 320th in fiscal 2019 for average residential tax bills. 
LaForest asked if it was true that shifts allowing higher rates for commercial and personal property were supposed to be instituted as emergency mechanisms. 
"As we know, North Adams has been challenged most of the last 35 years ... since Sprague Electric Company started dwindling down and went out of business and we've had some very hard years, but it was never meant to be something that was used year after year after year," he said. "And again, that's taking the tax burden off of the taxpayers and putting it on the commercial side."
He felt that the high tax rate was a disincentive to businesses and that the council should start considering moving toward a single rate. 
Mayor Thomas Bernard said a single rate would be about $23.78, almost $5 more per $1,000 valuation.
"Just looking at and taking a quick calculation from 2009 to 2019, which is 10 years, the commercial rate went up $14.58 and the residential went up $7.40," said Councilor Marie T. Harpin. She asked if the values had gone up higher on the residential side than the commercial over that time. 
Vivori said rising valuation and growth are factors that will drive down the tax rate but he would have to do some research to answer her question. 
"I think you know we're now starting to see some of the benefits from the investments that we made in North Adams over the past several years," he said. "We're seeing justification for those values going up."
Councilor Eric Buddington said he would prefer a different variation in taxation rates that he thought would be more equitable. 
"I would like to express a preference for small homes over large homes ... small businesses, versus large businesses and despite my poking around, I haven't found that we have any leverage to actually do that," he said. 
Councilor Benjamin Lamb reminded the council that even though the taxation rate is higher for commercial and personal property in North Adams, the cost for other expenses by square foot are extraordinarily low compared to the eastern parts of the state. And other factors such as minimum wage increases or family leave may have more of an impact on regional businesses. 
"It all starts to make a bigger picture and yes, I know that it's scary numbers in terms of the tax rates," he said. "But we have to really look at what that whole picture is from tip to toe."
LaForest, responding to a comment by resident Robert Cardimino that more burden should be put on businesses, said people who have trouble paying their taxes will also have trouble paying more for merchandise when businesses pass on the cost of taxes. 
"We have to continue to make it easier for businesses to do business, for new startups to do businesses in North Adams, or we will have no jobs and people will continue to leave the area," he said. His taxes have gone up 166 percent in 10 years, "I know that my taxes are going to go up no matter what happens tonight."

Resident Robert Cardimino argues for lowering taxes on homeowners.
The councilors were not happy that the mayor had opted to pass the snow and ice overrun of $212,631 into the fiscal 2020 appropriation rather than use reserves or that another $294,534 in cherry sheet overruns were also being included. An additional $507,000 total is being added onto the fiscal 2020 levy. 
"The budgeted tax levy that we passed in June was the $17,756,489 number," the mayor said. "However, there are a number of adjustments that as we were doing budget reconciliation internally as well as on our tax [recapitulation] that we need to account for."
The two major drivers were on the school side because of changes from the cherry sheet estimates to the actual (the cherry sheet is a listing of debits and credits to municipalities and schools from the state) for Chapter 70 aid, additional charges for school choice and to make up an overrun of $84,000 in transportation aid mistakenly given by the state in fiscal 2018. 
Lamb asked why the city was not drawing down on existing reserves to cover the $84,000 "since ultimately that money should have not been spent in that fiscal year since it wasn't ours in the first place."
"I think because we have levy capacity I would rather address it here and hold the reserves for real rainy day purposes," said the mayor. 
The last two administrations have focused on building reserves that had been nearly depleted a decade ago. The goal, in line with the city's auditors recommendations, is to have 5 percent in reserves.
Councilors wanted to know why the city was spending $84,000 that was supposed to go to another community. Harpin, chairman of the Finance Committee, said her committee had not been aware of this problem during the numerous meetings held on the fiscal 2020 budget. Bernard said it had not come to light until July.
"We spent it over the course of the year because, again, we were getting our allocation of our education funding," the mayor said. "We had no way at the time the funding was being dispersed of understanding that the error had been made, until the state became aware of the error."
Administrative Officer Michael Canales said the city receives is state education aid monthly and that extra funds weren't apparent until the end of the year closeout and notified the state something was off.
"Then the state reported that they were taking back the money in [2019]," he said, adding the city's going to be short about $36,000 in the 2019 budget because that money went to another town and won't come back until this year. 
Once the books are closed, he said, you can't go back and reopen the books and the money has to be made up elsewhere. 
Harpin said the councilors should have been informed about this issue when it approved transfers to close out the year and that the city shouldn't be spending money not its. 
"I didn't know that there was going to be additional money that was needed, and going to have to be ... additional tax to the taxpayers." she said, adding that Councilor Rebbecca Cohen had asked questions about snow and ice at the time. "There was no mention at all about an overrun."
Councilor Joshua Moran said the whole thing was "sloppy" and Lamb wanted to know why municipalities have to suffer because of the state's mistake. 
"Maybe there isn't an answer to that right now but I don't want to see this ever again, like this is really really obnoxious, that either we're getting money that's not ours or someone else is getting the money that is ours," he said. 

Tags: fiscal 2020,   property taxes,   tax classification,   

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