North Adams City Council Narrowly OKs Lower Tax Shift
City Clerk Joshua Vallieres swears in new officers to the police force.
The compromise recommended at last week's Finance Committee meeting wasn't enough to convince Councilors Jennifer Barbeau, Marie T. Harpin and Peter Oleskiewicz, whose concern was the impact on residential property owners. Councilor Wayne Wilkinson joined them in a protest vote against raising the shift from last year's 1.68.
The vote means that the residential rate will be around $17.67 per $1,000 valuation and the commercial about $37.59.
For the homeowner of an average house assessed at $194,713.98, that means their tax bill will rise about $47 above the mayor's recommended tax shift of 1.75 toward the commercial side that would have been a bill of about $4,000.
The tax rates proposed by the mayor, using the 1.75 shift, would have been $17.46 per $1,000 valuation for residential and $38.33 for commercial. Both rates would have dropped about a $1 from last fiscal year but because residential values have risen, the average homeowner would have seen their tax bill rise by almost $300, or about $24.55 a month.
"I do believe there should be no line between residential and businesses, and I certainly don't want to pit one population against the other," said Mayor Jennifer Macksey. "I made this proposal because I felt that it was an appropriate impact on the businesses, and a reasonable impact on a residential rate."
The mayor said she stood strong on a 1.75 shift to the commercial side and several councilors agreed with her.
Councilor Marie T. Harpin pointed out that no matter what shift was approved, the commercial side would see a decrease of $30 to $45 even as residential bills go up by at least $300.
"I do support the mayor in this 1.75 shift because no matter what, the increase for the resident is going to be an increase and I don't want to make it more than what we have," she said.
Councilor Peter Oleskiewicz, after the meeting, said he had agreed with Harpin that his concern was the impact on residents. Councilor Jennifer Barbeau described it as a revenue problem that had to be addressed as part of a larger picture.
"This council, I believe it needs to work with the administration and we need to find ways to bring income in that is equitable for everyone to pay what our expenses are coming to the city," she said. "So I just don't want to be misunderstood that I'm not supporting it. I'm not against anything. I'm against the fact that we do not have a equitable stream of income coming into the city of North Adams, and that's what my biggest concerns."
Wilkinson said for all the talk about "doing something" to bridge the large gap between residential and commercial rates, the City Council had been doing something. Over the past decade it had been lowering the shift to bring the city's high commercial rate more in line with the residential.
"I like the 1.68 and I'm going to vote against the 1.175 to make a point," he said. "It needs to be 1.68 or lower if we're ever going to solve this problem."
North Adams has had the third highest commercial rate in the state after Pittsfield and Holyoke the past two years. In contrast, it has among the lowest residential tax bills in the state — it was 15th lowest last year and 12th the year before.
The city had last been at the maximum split of 1.75 exactly a decade ago. After sitting at about 1.71. for years, the shift dropped below that beginning in 2019. In fiscal 2022, it was 1.68002.
The average business, calculated by Assessor Jessica Lincourt as valued at $434,118.61, up only slightly from last year, would see its tax bill decrease by about $300.
Councilors, however, have said the rates didn't take into account the impact of the pandemic over the past two years, the lack of investment and higher commercial costs. A commercial tax rate that is the third highest in the state doesn't into a business-friendly community that will attract entrepreneurs and create jobs, they said.
Main Street business owner Jessica Sweeney, a former councilor, reiterated her points from last week's Finance Committee meeting that the commercial tax rate — the third highest in the state — was having an outsize impact on small businesses, including her ability to hire help.
Resident Robert Cardimino, in contrast, said businesses had the option of raising prices to cover their costs.
Councilor Keith Bona, also a business owner, picked up on that saying residents would end up paying in the end. Small businesses had two choices, he said, raising prices or closing.
He read a letter to the Finance Committee from commercial realty owner David Carver who warned against pressing the commercial side too hard and encouraged them to strike "the right balance" for jobs and investment.
"A high rate also pushes nonprofits to buy commercial properties. Taking them off the tax roll further eroding revenues," Bona read and pointed to the loss of the former Price Chopper, Nassif's and the Transcript building to nonprofits.
"All studies done on tax classification indicate maximum shift is detrimental over time," Bona read. "The damage accumulates slowly. Look back over the last 40 years and look at the loss of revenue from commercial and dramatic rise in nonprofit ownership."
According to the assessor's office, the city has 3,713 residential properties and nearly a 1,000 mobile home park and multiunit parcels. There are 318 commercial and industrial properties and 354 nonprofit properties.
Five percent of the properties are paying 35 to 38 percent of the taxes, Bonas said. "If you want to play scales, that's an unfair number."
Councilors Ashley Shade and Bryan Sapienza said the high commercial rate makes it harder to attract business and jobs.
"That creates an environment where we have less jobs and economic opportunity for the people who live here, which means it's hard to get a decent paying job that's more than minimum wage," said Shade. "It shows in our downtown areas, it shows when more properties are being purchased by nonprofits and come off the tax roll and we can't collect anything on those. It's really important that we find a better balance because those businesses have to spend even more money on the taxes that go to the city."
She added that the state should differentiate between large companies such as Walmart and small mom-and-pops when it came to tax structures.
The mayor said she appreciated the worthwhile conversations but believed this year was the one to shift toward commercial because its assessments were flat. There would be more growth coming down the road, she said.
The council voted to amend her order from last week to a 1.715 shift and then approved with the same 5-4 votes.
Tags: tax classification,
