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Sarno proposes using $10 million from free cash to lower Springfield's property tax levy

Sarno_budget_FY2023.jpg
Paul Tuthill
/
WAMC
Springfield Mayor Domenic Sarno, joined by members of his finance team, announces his fiscal year 2023 budget recommendation at City Hall on May 12, 2022

Tax bills likely to go up next year because of higher residential property values

As new property tax rates are about to be set for next year in Springfield, Massachusetts, steps have been announced to reduce the tax burden.

By tapping part of the $41 million windfall the city received earlier this year from Eversource when the utility company decided to stop contesting –after a decade – what it owed the city in taxes, Mayor Domenic Sarno is proposing a $10 million offset to next year’s property tax levy.

“This is probably the largest amount of money put in, in my memory, to try to reduce the tax burden,” Sarno said.

He said the tax rates he’ll propose to the City Council on Monday will be lower than this year for both residential and commercial property. But tax bills could go up, especially for homeowners, because of still rising property values.

“The real estate market is still very-very hot, still very-very good,” Sarno said.

The average value of a single-family home in Springfield has increased by 16.5 percent to $215,700, according to the city’s Board of Assessors.

If the City Council opted to leave unchanged the residential factor, which is the number that determines how much the total tax burden is divided between residential and commercial property, the tax bill next year for the average single-family home would increase by $261. The average tax bill on a family home increased this year by $216.

Facing calls last year from City Councilors to take measures to ease the tax burden on struggling homeowners, the Sarno administration lowered the eligibility age to 65 from 70 for low-income and low-asset homeowners to qualify for a property tax abatement and increased the amount of the tax break to $1,000 from $500.

According to the administration more than 1,000 homeowners received some form of tax relief this year with an aggregate savings of just over $600,000.

Another attempt will be made this year to get special state legislation passed that would let Springfield offer the $1,000 abatement to income and asset eligible homeowners who are under the age of 65, said T.J. Plante, the city’s Chief Administration and Finance Officer.

“We recognize the challenge our residents have,” he said. “Inflation is no joke as you can see it everywhere you go between gas and groceries. We’re going to do whatever we can and still maintain the fiscal stewardship to keep us going through the recession that we think we can weather with reserves and other funding sources.”

Speaking at a meeting of the City Council Finance Committee’s Tax Subcommittee, Diana Szynal, President of the Springfield Regional Chamber, said Springfield businesses are burdened by the same inflation pressure as residents.

“So, I hope we can take that into consideration when we consider this split,” she said, adding that Springfield is “the economic engine in western Mass.”

Sarno said he also plans to put more money into a program administered by the housing agency Way Finders that helps people struggling financially pay their rent and utility bills. The city has put $3 million into that housing assistance program since it started during the pandemic.

Paul Tuthill is WAMC’s Pioneer Valley Bureau Chief. He’s been covering news, everything from politics and government corruption to natural disasters and the arts, in western Massachusetts since 2007. Before joining WAMC, Paul was a reporter and anchor at WRKO in Boston. He was news director for more than a decade at WTAG in Worcester. Paul has won more than two dozen Associated Press Broadcast Awards. He won an Edward R. Murrow award for reporting on veterans’ healthcare for WAMC in 2011. Born and raised in western New York, Paul did his first radio reporting while he was a student at the University of Rochester.