Williamstown Rejects Tax Exemption for FY24
WILLIAMSTOWN, Mass. — The Select Board on Monday voted unanimously not to adopt a residential tax exemption for the current fiscal year but left the idea on the table as one of several options the town could consider employing to provide tax relief in the future.
Two of the board members, Andrew Hogeland and Jane Patton, argued that the RTE is too blunt an instrument and advocated for more targeted tax relief mechanisms.
The other three members, including the exemption's leading proponent, Stephanie Boyd, each said more study is needed before the town — and the board — can find consensus.
The decision brought to a head more than a month of conversation around the exemption, which Boyd outlined in presentations at the board's last two meetings, suggesting that it is a tool the town can use to make its property tax system less regressive. The RTE would create a standard deduction (anywhere from 0.1 to 35 percent of the median home price in town) for full-time resident homeowners when calculating property tax bills.
The net effect of implementing the RTE would be to increase the tax rate across the board, but that higher rate would be mitigated for most homeowners by the deduction. In practice, the RTE would shift more of the property tax levy onto owners of more expensive homes, who would net out with a higher tax bill; owners of lower-priced homes would see a tax decrease compared to a tax distribution without the exemption in place.
By law, municipalities decide each year whether to implement the RTE and several other potential tax mechanisms — like a different rate for commercial properties. Monday's decision came as part of the Select Board's annual tax classification hearing, an often routine duty that drew considerable more interest from the community thanks to Boyd's proposal.
The board received a couple of dozen emails from residents about the RTE in the weeks leading up to Monday's hearing, and nine different residents went to the podium to address the board on a night when the crowd overflowed into the hallway outside the meeting room.
Trish Gorman of White Oaks Road was one of several who spoke in favor of implementing the exemption.
Identifying herself as a homeowner in town for 35 years, Gorman told the board that she has worked in the town's schools, the community day care and at Images Cinema among other locations.
"I am the working class in this town," Gorman said. "And it has been financially a very difficult thing to maintain over these years. Stephanie, thank you for bringing this conversation up.
"Even the $120 town dump pass I have to pay for every year, for me, that's a huge hit. Other people drop $120 on a bottle of wine. You can't have this town function without us working people."
Kenneth Kuttner encouraged the board to consider looking at the residential tax exemption.
"Before I saw Stephanie's slides, I wasn't aware of the problem of regressivity in property taxes, and I'm an economist," he said. "I'm embarrassed."
But, Kuttner said, he had come to read up on the issue and found that the notion that flat-rate property taxes are regressive has a lot of support among academics who look at municipal financing.
"I'd support the idea of a team or ad hoc committee [to study the RTE]," Kuttner said. "I may live to regret it, but I'd be willing to serve on such a body."
On the other side were residents like Malcolm Smith, who told the board that the RTE will not address the issue of affordability in housing.
"The problem with fixing something that isn't broken is all the unintended consequences we create," Smith said. "If someone with a $900,000 house in town sells it [because the taxes are too high], they'll be a $500,000 house or a $400,000 house and take it away from the people we're trying to help.
"I wish we could spend our time and energy on things that are not divisive. I want us to come together. I think there are much better alternatives to explore than the RTE, but let's be careful to look at the facts from all sides."
Hogeland came to Monday's hearing with three potential alternatives that he thinks the town should look into. All his proposals rely on means testing to identify who would get a break in property taxes.
He suggested the town look at creating a local expansion of the existing state Senior Circuit Breaker tax credit, expanding the senior property tax exemption that town meeting expanded just last May and creating a low- to moderate-income exemption for the town-imposed Community Preservation Act property tax surcharge.
The first two steps would require a home rule petition to the state Legislature. The latter would affect a tax of 2 percent on property value after the first $100,000 of property value are deducted. The first two also would only benefit income eligible senior citizens, but Hogeland said the town also could ask the Legislature to allow Williamstown to waive the age requirement on the existing senior tax exemption program.
Again, in each of Hogeland's proposals, residents would apply to the town for property tax relief based on their income and [non-house] assets. He said that would be preferable to using the RTE, which has no income requirement.
"Although [the RTE] does help people who need help, it also helps people who don't need help and doesn't help people who need help," Hogeland said. "And it puts upward pressure on rent. I want to make sure renters aren't a casualty of this. We have to make sure we don't do that either."
Boyd has acknowledged the potential negative impact on renters, since their landlords could face higher property tax bills under the RTE. But she has said the town could follow suit with other communities who have adopted the RTE and appeal to the Legislature to allow an exemption for property owners who rent to full-time tenants.
Randal Fippinger, who was the only member of the board on record supporting Boyd's proposal before Monday night, said he appreciated the suggestions from both Boyd and Hogeland. Fippinger and Chair Jeffrey Johnson also said that the board needs better information before it makes any changes to the property tax structure.
"While I'm generally in favor of focusing on tax relief for lower income members of the community, there needs to be more discussion," Fippinger said. "We need to spend time considering a blended solution, maybe the residential tax exemption with some of what Andy's talking about or one or the other.
"I don't want folks to think we're rushing something through with the discussion tonight."
Johnson agreed.
"I don't believe, right here, with the information I have that this is something we move forward with," he said in reference to the RTE. "I do believe it's something we continue to look at. I want to make that clear."
Tags: property taxes, tax classification,
