The mayor of Pittsfield, Massachusetts is announcing what she calls a historic break for taxpayers in Berkshire County’s largest community.
Mayor Linda Tyer, who enters the third year of her first term in January, says the last time the city’s tax rate decreased was in 2007.
“We have been able to reduce the residential tax rate from $20.01 to $19.42, and we’ve been able to reduce the commercial tax rate from $39.98 to $39.94,” she told WAMC.
“So for the average single family valuation – which is $186,600 for FY19 – it will mean roughly a $10 decrease on an annual basis on your tax bill," said Pittsfield Director of Finance Matt Kerwood. He also estimated the savings commercial entities in the city would experience with the tax break.
“On a median value of $189,000, it will mean a $367 reduction on an annual basis,” Kerwood told WAMC.
Tyer, a Democrat, also told WAMC that the average single family home owner in Pittsfield will see a reduced tax bill for the first time since 1993 despite rising valuations.
“The real estate market in Pittsfield is trending very nicely in our favor,” said the Mayor.
“That $5 million in new growth equals about $1.9 million in taxes, in tax revenue,” said Tyer.
“What it means is that we as a city are not pulling as much or requiring as much from the tax levy in order to meet our expenses," said Kerwood. He explained that the city’s revenues come largely from three sources: state aid, local receipts – like excise taxes and investment income – and property tax.
“In FY19, we’re seeing an increase in other, non-property tax revenues, which is allowing us to give relief to the taxpayer because we’re not needing to draw as much from the tax levy in order to meet the budgeted expenses,” said the Director of Fiance.
His reasoning for the change in the city’s finances?
“Primarily the increase in state aid,” he said.
Kerwood said education funds accounted for the lion’s share of the new state aid.
“Those are our tax dollars too, and they should be coming back to our city so that we can continue to be really good at providing services to our residents," said Tyer. She acknowledged the “volatility” of relying on state aid in the city’s budget, but said that the city has a plan.
“We have some other new taxes that will be coming on if state aid should fluctuate against us," she told WAMC. "We’ve got things like the marijuana tax that will be coming available to us in the next year and the following year.”
“The overall values within the city of Pittsfield have increased. This has occurred now for the past couple of years, and it’s assisting us in our ability to tax," said Pittsfield City Assessor Paula King. “While we’re still imposed by the levy ceiling under Proposition 2 ½, we continue to see that the disparity between the ceiling and our taxing capabilities narrowing in.”
She told WAMC that part of the city’s change in the tax rate emerged from a lower rise in the tax levy than years prior.
“The amount that needs to be raised by the levy has not increased as much as in past years," said King. "The levy this year is only increasing just under a million dollars.”
She also said that while residential valuations have risen, commercial valuations have dropped from $198,000 in fiscal year 2018 to $189,000 in fiscal year 2019.
“In some cases, that’s a good thing," said Tyer, “because if you’re a business owner or a business developer and you’re looking for new property or you want to expand, the value of those properties might be favorable to a buyer.”
The mayor plans to bring her proposal to the city council, which has the power to determine how to weigh the tax break between residents and businesses.
“They have the ability to shift that burden back and forth between residential payers and commercial payers,” she told WAMC.
The city council is expected to consider the plan at its November 13th meeting.