#1 2011-09-14 15:31:11
Get ready!!
The assessors are out and about and you are soon to find out if your taxes will skyrocket, or the assessments will be so low that your shortfall will be in the millions.
This is a CRITICAL time in Wareham's history.
Be VERY aware of EVERY money article coming before Town Meeting.
This year and the next could very well be the future of Wareham. Will it survive, or will it be stone cold broke and apportioned out?
I don't envy you.
At all.
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#2 2011-09-15 17:18:09
DanO - I have to disagree with your comments on the Massachusetts property tax system.
If the assessors reduce values, it will NOT reduce the Towns' revenue. Prop 2 and 1/2 allows the LEVY to increase by a minimum of 2. 5 %, with no vote(s) required. The increase in the levy from fiscal year 2010 to fy2011 was 3.5% - the automatic 2.5% plus a 1% +/- for new growth. This data is available at mass. gov.
An overall reduction or increse in assessed values merely produces a change in the tax rate. The real driver of property taxes in Mass. is the Levy. If it goes up, the taxes go up; regardless of the change in assessed values. It almost never goes down.
We agree on the "eyes-on" concept of money articles. But, the majority of these were voted at the Spring Town Meeting. Anything at the Fall TM is mostly fine tuning. In other words, for fy2012, the die is cast.
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#3 2011-09-15 18:30:26
Thank you, Stewie.
Things have certainly changed since I was a Selectman.
I appreciate you keeping me educated and up to date.
It is people like you on this site that makes it the most important site available. The truth, the facts, the real news appears here first.
I sometimes forget why they call it Taxachusetts.
No wonder so many people move to Florida when they retire :)
Is there a cap on a levy?
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#4 2011-09-15 18:49:51
Is there a cap on the levy? Yes....sort of.
The Prop 2.5 ballot question allows the levy to increase by a MAXIMUM of 2.5%. Except:
1. New Growth, essentially new construction. When the RE market was hot, new growth added about 2.5% to the levy. Now, it is closer to 1 %.
And, you may question that. Fair enough. I don't have detail, but my guess is that the new growth in recent years is due to utility activity. That has been the case in other communities. Utilities are constantly upgrading their stuff, and it all counts as new growth.
2. Debt Exclusions. These are temporary overrides, usually to pay for bonds for the Town's construction of buildings, and/or renovations. Debt exclusions must be voted. In effect, they are like mortgages.
3. overrides: the Town may vote to permanently exceed the limits of Prop 2.5. Some towns do this with regularity - mostly affluent Towns with high-caliber school systems, like Medfield.
There are other minor items, but the three cited above are the primary items.
Thus, under this system, property values can be in DECLINE, while the levy increases, thus increasing property taxes. Conversely, the levy increased about 5% per year when property values were increasing at double-digit rates.
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#5 2011-09-15 19:52:28
Thanks, Stewie.
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#6 2011-09-15 21:03:28
Here is a question, Stewie. Hypothetical: The Town needs $1000.00 to pay bills. The tax collected only comes to $800.00...where does the rest of the money come from?
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#7 2011-09-16 10:25:11
What's this? a test? Ok, I'll ante, I'm in. pot's right.
Let's begin the answer with a question: why would you collect $800.00 in taxes when you only need $500 +/- (actually $510, but I'm rounding).
Here's the deal (more rounding ahead). The Town had to raise $60,000,000 for fiscal year 2011, the last year with available data. Of that $60 mil, 49% came from estimated receipts and other sources (to be described). That leaves 51 %, or $30.8 million to be raised by taxes, which is called the tax levy.
That's right, property taxes are just over one-half of every dollar spent by the Town. This figures can be verified at www.mass.gov.
Included in the 49% are motor vehicle excises of about $2.1 million. These are included with Local Receipts, which altogether total $5.9 million. the biggest non-tax revenue source is the State, with $14.5 million in local aid. Free cash and other available funds total $1.2 million.
So, to answer your question: it depends. If the deficit takes place during the fiscal year, it is likely to be paid by transfering from other budgeted funds which have not been (and will not be) spent. If that is not possible, then the deficit will have to met in the following year's budget.
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#8 2011-09-16 14:25:19
Thanks, Stewie. No test. I am seriously looking for information because so many things have changed since I held office ,it is all foreign to me.
I used a $1000.00 figure to make the math simple.
Millage rate is what made me curious.
Do you have any idea of the shortfall or deficit this coming year?
I ask you because I know you, you are my friend, I trust you, I know of your expertise, and I depend on you.
Say hello to your much better half for me :)
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