GRAFTON, Mass. — During Tuesday night’s selectmen meeting, a new property tax rate for Grafton was announced for the 2013 fiscal year: $15.55 per $1,000 of assessed value, a hike of more than 10 percent.
But what does it mean, and how did the town come to this figure? The Daily Voice sat down Thursday with Jennifer O’Neil, Grafton’s principal assessor, to ask her questions from our comment page.
Q: Massachusetts law says that Proposition 2½ puts a ceiling on property tax increases. Why are our taxes going up so much more?
A: Proposition 2½ basically increases the amount of a levy, the amount a town can raise from one year to the next. It doesn’t have to do with how much their tax bill will increase, it doesn’t have to do with how much the rate will increase, it has to do with how much the town can raise from last year to next year. That amount is 2.5 percent plus new growth, and plus any other debt that is voted to be excluded. Those three things are what make up our levy limit.
My job is to take what happened at town meeting, what budget was established, what spending has been done, and come up with a rate, after my values are adjusted. When a spending item comes up, it may be made into a warrant and the taxpayers vote on whether they want it. I work within those parameters.
Q: There is a 47-cent increase tied into the new high school debt. How is that figured?
A: There is a debt schedule. It’s like a loan payment, a projection of what you are going to owe over time. So that debt service is different every year. It was voted [in the town meeting] as a debt exclusion so we have to use that annual amount on the schedule to determine our payment. Every year the budget would include a debt service.
Q: Over the past five years, we have seen two double-digit tax rate increases. What is the source of these big hikes?
A: In 2007, our property values went up, the tax rate came down. It’s a balance. In 2012, we had a decrease in value, the rate goes up. Our values are based on the market, so they have nothing to do with the levy. The rate is the calculation of the two. That’s the marriage of, “Here’s what we need, here’s the value.” The rate is the calculation of that.
We’re always behind the market by two years. So while values began to drop, we were up here. Now we're chasing it down.
That’s based on our statutes. The law says we have to use a certain timeframe of the real estate market to determine this year’s value. So for the value we set for fiscal 2013, the analysis was done during calendar year 2012, and it was based on sales that occurred in 2011. That’s our last full year of data available for us to use.
Q: Is the 10 percent property tax hike a real dollar increase?
A: The tax rate went up 10 percent, but the property value might have gone up or down. For some taxpayers, it makes more sense to calculate the average increase from last year to this year using last year’s values and rates.
The average tax bill will go up $280. So if you look at that number as a percentage of the property value, then it's 5 percent.
Q: So the tax rate goes up 10 percent, but as a percentage of the average property value, it’s around 5 percent?
A: Right. What does it mean to an individual taxpayer? It means their taxes went up 5 percent. Both answers are right. It depends on how you want to look at the numbers.