Homeowners in Springfield, Massachusetts will have to pay more in real estate taxes next year.
The Springfield City Council voted 10-3 Monday evening to set new tax rates that will result in a $194 average increase in the tax on a single-family home.
Whichever scenarios for tax rates Councilors were presented with would have resulted in higher bills for most homeowners because of the hot real estate market, said Council President Jesse Lederman.
“Ultimately, we tried to make a sound decision that allows us to have room in the future to deal with other increases that may come down the line,” he said.
Residential property values have skyrocketed by 16.5 percent since last year’s valuations were set by the city’s Board of Assessors.
The new tax rates are $17.05 per $1,000 of assessed value for residential property and $36.40 per $1,000 assessed value for commercial and industrial property. Those rates were recommended by Mayor Domenic Sarno.
Councilors also approved a recommendation from Sarno to offset the tax levy with $10 million from the city’s free cash account.
Using that much free cash to reduce taxes is unprecedented for Springfield, said longtime Ward 2 City Councilor Mike Fenton.
“I do think the $10 million is an appropriate -- and I would characterize it as an aggressive -- figure,” Fenton said.
Councilor Trayce Whitfield, who chairs the Finance Committee, had urged Sarno to put more of the city’s $67 million free cash stockpile toward tax relief.
“It is a shame we would not do more for the residents of our city of Springfield, especially our seniors and those on low fixed-incomes,” Whitfield said.
Administration officials warned that using more free cash to offset the tax levy could result in homeowners seeing tax bills “balloon” in subsequent years. They also cautioned against shifting more of the property tax burden from the residential to the business side.
The rates recommended by Sarno and ultimately adopted by the Council were endorsed by Springfield Regional Chamber President Diana Szynal.
“Further shift of the tax burden onto businesses would be irresponsible and shortsighted,” Szynal said.
Voting “no” on the tax rates were Whitfield, Ward 8 Councilor Zaida Govan, and at-large Councilor Justin Hurst, who last week announced he is running for mayor.
Last year, Springfield lowered to 65 from 70 the eligibility age for low-income and low-asset homeowners to apply for an exemption on their property taxes. The abatement amount was increased to $1,000 from $500.
In a statement, Sarno said he will direct more money into a program administered by the housing agency Way Finders to help people pay rent and utility bills.