A proposal to restructure Great Barrington’s tax system is being criticized as prohibitive to businesses and second home owners, but the man behind the idea says it’s about economic fairness.Michael Wise, chair of Great Barrington’s finance committee, is proposing a residential exemption on property taxes meant to shift the impact from lower-valued homes to more expensive ones and those belonging to second home owners.
“The motivation behind it is to give the people at the low end of the scale some relief and make the property taxes progressive,” said Wise.
In a Berkshire Edge article, Wise outlines a list of scenarios where homes, even those owned by full-time residents, valued above $330,000 to $470,000 would not qualify for a residential exemption.
“I’ll admit to being an old-fashioned Democrat,” Wise said. “I think progressive taxation is sound policy. I think charging rates on the people with more resources is appropriate.”
If the cutoff or breakeven point is near $470,000 in assessed property value, Wise says nearly three-quarters of the town’s residential properties would benefit. At the median home value of $294,400, the residential exemption would cut the tax bill 11 percent, according to Wise. He says for the 100 homes valued over $850,000, half of which are second homes, the tax bill would increase by seven percent or more. But some like town resident and investment banker Chip Elitzer say the idea is off-base. He says property value is not a good indicator of income. (Chip's Letter to the editor in Berkshire Edge)
“They might have had a higher income at the time they bought the property, the property might have been a lot less expensive when they bought it and over the years it has appreciated, they may now be retired and retired and living on a fixed income,” Elitzer said. “The fact that they may have a million-dollar home does not indicate that they are millionaires.”
Wise does outline available means-based exemption and tax relief programs, mostly for seniors. He is also proposing a split tax rate, which exists in communities like Pittsfield where businesses and residents pay separate rates. He is proposing a higher rate for commercial and industrial properties. Richard Stanley, a resident of Egremont, owns the Triplex Cinema and a number of commercial buildings in downtown Great Barrington, a town of about 7,100.
“If we start raising the taxes on the business entities I’m going to just have to pass those right along to the business owners,” Stanley said. “So there’s another case of killing golden goose. It’s these hardworking retail merchants that have revitalized Great Barrington.”
Elitzer points out that rental properties do not qualify for the exemption and therefore landlords would pass increased costs onto renters. Elitzer says the fact that the proposal is being discussed is discouraging for current or potential town businesses. Newly-elected selectman Bill Cooke campaigned in favor of the plan, but is opposing the split tax rate for the time being.
“A dollar means more to some people than it does to others,” Cooke said. “So I see it more as the community coming together to help everybody else out. I want to preserve the nature of the community. I don’t want it to become unaffordable for the people who work in town. I think this is a way for the community to come together to make it possible for everybody in the community to keep living here.”
Wise says all of the towns who use residential exemptions also have a split tax rate. Some are characterizing the plan as an attack on second home owners, making the point that they pay for town services and the school system without utilizing them as much as full-time residents. Stanley says it reinforces a mentality of “us versus them.”
“This would be the first time that it’s actually codified as part of the fabric of the community,” Stanley said. “That would really be very unfortunate…to try to separate types of citizens.”
Wise says he is motivated by the $5,138 average single family tax bill in Great Barrington, second highest in Berkshire County behind Williamstown. He adds the negatives need to be weighed against the positives.
“The benefit of this is significant and easy to state,” Wise said. “And then there are quibbles. If you pay attention to each quibble it sounds like it has all kinds of problems people lose track of the fact that it has a benefit. The benefit being that well over half maybe as many as 80 percent of the homeowners in town would see lower taxes.”
Cooke says he plans to meet with the finance committee with the intention of bringing the proposal to the Select Board over the next few months. Elitzer says time would be better spent trying to adjust Great Barrington’s yearly commitment to the Berkshire Hills Regional School District compared to that of Stockbridge and West Stockbridge. He says his plan, which would require state legislation or a consensus from the three towns, could save Great Barrington $3 million a year.
“Instead we’re being set up for a debate among ourselves about a proposal which will retard economic development, erode our tax base, ultimately raise taxes for everyone in town and take our eye off the big ball, which is let’s get our actual tax burden down, let’s not just rearrange deck chairs on the Titanic.”
