Williamstown Board Talks Tax Relief Implementation
WILLIAMSTOWN, Mass. — The Select Board on Monday discussed how to implement a targeted property tax relief measure that town meeting approved last May.
The initiative, which started with the board, allows the town to give means-tested property tax exemptions to residents 65 and older who meet the commonwealth's requirement for a refundable credit on their state income tax.
In May, town meeting members overwhelmingly decided to send a home-rule petition to Boston to allow the local tax relief program. The Legislature approved the request just before the end of its 2024 session, and Gov. Maura Healey recently signed it into law.
Now, it is up to the Select Board to decide what parameters to put in place for the program.
Specifically, the town can match up to 150 percent of the exemption granted by the state, and it must determine an overall cap for the program as applied in Williamstown.
The cap will determine how much of the tax levy, potentially, is shifted to property tax owners who do not qualify for the income-restricted state program, sometimes referred to as the "circuit breaker" tax credit.
Former Select Board member Andrew Hogeland, who now lives in Connecticut, drafted the local provision that town meeting and the Legislature approved. On Monday, he participated in the Select Board meeting via Zoom to advise his former colleagues about their options.
Hogeland provided historical data that shows the number of Williamstown residents claiming the circuit breaker exemption on their property taxes from 2016 to 2022 ranged from 74 to 101 with a mean number of participants of 89, peaking at 101 in 2020.
The total dollar value of those claims varied from $64,738 to $95,001 with a mean value of $80,388 in the seven-year span.
But those dollar figures came from a time when the state's circuit breaker income tax credit was capped at about $1,200 per individual (Williamstown's average claim was about $909 from 2016-22). In 2023, the state doubled its cap to about $2,400, and Boston raised the individual cap again to $2,730 in 2024.
The town does not yet have data on how those elevated caps impacted the amount claimed by town residents under the state property tax program.
In part due to that uncertainty, Hogeland recommended that the current Select Board not "max out" the program by completely matching or exceeding the state exemption but, rather, start with a percentage match below 100 percent and see how the local exemption rolls out.
Specifically, Hogeland recommended starting with a 50 percent match to provide some property tax relief at the outset and gather data about how many residents choose to participate.
In addition, the town program comes with an overall cap, which the Select Board can set anywhere from 0 to 1 percent of the total tax levy. In the current fiscal year, the levy is about $18.5 million, and 1 percent would be about $185,000.
Hogeland recommended setting the cap at about $90,000, or half a percent of the levy.
"You want to strike a balance between giving relief to those who need it but not breaking the budget," Hogeland said. "Whatever this [exemption program] costs gets redistributed to everyone else in town."
The board members grappled with how to strike the balance between honoring the intent of the program — to provide property tax relief to low-income seniors — and the uncertainty of knowing how changes at the state level could drive up the cost and/or create a situation where the local program hits its cap before all eligible seniors have claimed an exemption.
"If you take $2,700 [the 2024 maximum state exemption], divide by two and multiply by 100 people, that's $130,000," Stephanie Boyd said.
"That's a worst-case scenario," Hogeland replied. "It means everyone is getting the maximum [state circuit breaker] credit."
In the seven-year period in Hogeland's analysis, the average Williamstown beneficiary of the state program received about 75 percent of the maximum state credit on their income tax.
"It's historical data, but it's very stable over time," Hogeland said. "The decision for you is how to pull the two levers [percent of the match and total program cap] in a way that gives substantial relief to those who need it without overly redistributing to the rest of the town."
Though the board agreed to take more time before making those decisions, most members appeared to lean toward adopting Hogeland's idea for phasing the program in, particularly given the fact that the Select Board can revisit its decision every year.
One exception was Randal Fippinger, who argued for increasing the cap in year one.
"I would argue … $90,000 is too low because if one priority is to make sure everyone's taxes don't go up, another priority is to help people stay in town," Fippinger said. "Shouldn't the [cap] number be at least $100,000? Yes, it's adding a little more burden to the rest [of the taxpayers], but I'd advocate we need to help this group that doesn't have as much of a voice in the town.
"These [income-eligible seniors] applying for this are not coming here to our meetings."
Jane Patton was among those arguing for a gradual approach.
"I'd think more strongly in [Fippinger's] direction if this wasn't looked at every year," Patton said. "If it's $90,000 and $90,000 becomes burdensome for some other reason to the town and we have to go back, that's going to be way worse for people."
The new exemption tied to the circuit breaker was one of several home-rule petitions town meeting sent to Boston last spring. One, which would increase the income and asset limits for an existing senior property tax exemption, stalled in the Legislature last year and has been refiled for 2025.
A third, allowing the town to lower the age limit for the senior property tax exemption has been signed into law. That change requires an act of town meeting, Hogeland reminded the board on Monday.
"Around 17 [towns and cities] are doing it now," he said. "The existing cutoff is 65 [years old]. We talked last year that that number is arbitrary, so let's ask permission to lower the age limit, and [the Legislature] said yes. … Someone could make a case for any age. My only thought would be to start slowly, go two or three years at a time and see what happens."
Tags: tax exemption,
