Great Barrington — We can’t do much about death, but we might be able to change the tax structure.
So says Great Barrington Finance Committee member Michael Wise, still in the first year of his term. Wise says he wants to make Great Barrington more affordable. A residential tax exemption, he says, will benefit most of the town’s homeowners.
Wise has studied a progressive residential tax exemption and last Thursday night (October 9) he brought his findings to the Finance Committee, where he recommended hearings on the issue begin sooner than later, since a tax re-working takes some lead-time. Public comment is needed, he said, to gauge community support.
Committee members — and the few others present — listened carefully to Wise explain the tax rate overhaul and how it could ease the property tax burden for struggling Great Barrington homeowners.
“We have a tax affordability problem here,” Wise said. He says he used town demographics to analyze the effects of a residential exemption. Wise has also studied other towns that have adopted the tax relief measure. “People are hurting and we need to do something about it, to make our principal source of revenue progressive,” he added.
Like all Great Barrington officials, Wise had the Monument Mountain Regional High School renovation controversy on the brain, but he was the only one to mention it. Wise has previously said that he has tossed around the idea of a residential exemption to help taxpayers afford the renovation, up for a re-vote November 4.
“It is my conviction, that despite my hope, [a renovation or repair scenario] will cost about the same,” he said. “It is a big chunk of money that we’re going to need to find. And we need to look for it from the people who have it instead of the people who don’t.”
Translation? Wise supports the district’s $51 million renovation plan, which would require Great Barrington to borrow $18 million over 25 years. But he thinks the tax structure overhaul will act as a dinghy for residents about to sink in Great Barrington’s property tax Titanic.
Wise said he “cranked through the numbers” on the Massachusetts School Building Authority’s Core Major Repair option and the district’s renovation plan, and came out with roughly the same price tag. He said the Major Repair option came out to slightly less, but a negligible amount if the district has to wait years to get back into MSBA’s reimbursement program.
“I get a wash,” he said. “If you’re going to get a wash, get a better school and get it now.”
But even with that $24 million state reimbursement for the proposed renovation plan, taxes will rise according to assessed value of a given home. The average single-family property tax bill in Great Barrington is $4,871, Wise said. That’s higher than the Berkshire County average of $2,386, and the national average of $2,823. “One of our problems in Great Barrington is that by some standards we look rich,” he said. While the average Great Barrington assessment is $375,000, the median assessment is $294,000, but most houses in the town fall into the $200,000 to $225,000 range. The problem, Wise said, is that people in Great Barrington cannot make enough money in the local economy to afford the town’s rising property taxes.
A residential exemption would give a break to homeowners with properties assessed below $330,000, Wise said, flicking on his Power Point slides. A $225,000 house, for example, would get a 10 percent tax break. A $150,000 house could see its tax reduced as much as 30 percent. About 600 houses in town, Wise said, will qualify for a break of 15 percent or better.
The “concentration of benefit” would go to homeowners in the village of Housatonic and Risingdale, Wise said. “The median value there is around $220,000. They would get a 10 percent or better discount. Seventy percent of places [in Housatonic] will get a benefit.”
For homes above the $330,000 assessment mark, taxes rise progressively. That evens out the total revenue, which is mandated by state law. A house at the town-wide average of $375,000 would see a two percent increase, Wise said. The Castle Hill neighborhood and homes along Seekonk Road will see a roughly 9 percent increase, according to Wise.
Wise said the town’s data show expensive houses and cheap ones next to each other on the same streets. “There are beneficiaries and victims all over town,” he said.
Around 60 Great Barrington homes would see a 13 percent or more hit to their taxes, added Wise. And some of those grander houses are second homes.
“The more expensive the house, the more likely it is to be owned by a non-resident,” he added. “In this respect we look like Nantucket. This is why the residential exemption might be good for us. It’s a way of getting money out of the ‘tourists’.”
There is one worrisome catch in the plan, Wise says. While the residential exemption would help many of “those with valuable houses but not enough income to pay the taxes,” it would not ease taxes on “those who have houses with above average value.” His main concern, he said, are seniors who own such homes. “Seniors are the archetypal people who will be hurt by this.”
Wise added that Sudbury, a town with a residential exemption, and one Wise has studied, “does everything to take care of senior citizens — we [Great Barrington] don’t.” Wise is looking into ways that Great Barrington could maximize tax breaks for seniors.
Another concern is the added expense to implement a residential exemption, he said. It may require an extra person in the assessor’s office to handle the transition. Yet he said it seemed worth it to “save a lot of people a lot of money…to reduce the overall tax rate.”
Wise isn’t the only one looking into tax reform. Committee Chair Sharon Gregory has been looking into what a split tax rate might accomplish. A split tax rate here would tax commercial property at a higher rate than residential property, thus easing the residential burden. Gregory said her decision to study a split rate came on the heels of a letter from Berkshire Hills School Committee member Richard Dohoney, asking the Finance Committee to look into it because, Gregory said, “the town provides more services as a result of the number of businesses that operate here.”
Gregory asked Wise whether a split tax rate might go along with the residential exemption.
“I’m not sure yet whether it makes sense to do both the residential exemption and the split rate, or one but not the other,” said Wise, who sees both as a possibility. Wise said he “used to resist [a split rate], but I’m thinking harder.”
Wise said a split rate could help by increasing “the rate on commercial [property], changing the proportion of taxes in the residential exemption.”
As it turns out, Wise said, neither a residential exemption nor a split rate require a vote at Town Meeting; it is decided on by the Board of Selectmen and the Finance Committee.
“That’s scary,” said someone in the peanut gallery.
But what is scary to some may be a relief to others. It all depends on how much the town thinks your place is worth.
And it follows that there are those who will try to strangle a residential exemption in its cradle; Wise may find an uprising by those with pricier houses.
Agricultural Commission committee member and Great Barrington resident Vivian Orlowski came armed to speak on behalf of residents who felt the exemption was “divisive,” by punishing those with valuable real estate; that it would be a “benefit at the expense of another group.” Orlowski thought it better to find revenue by looking for ways to save money, particularly by taking a gander at town health insurance expenses — something she said Pittsfield had done successfully without harming its employees. At Orlowski’s prompting, the committee created a task force to look at the issue, and Orlowski volunteered to join it.
But Wise firmly stated that he doubted any cost savings alone would fix Great Barrington’s affordability problem. He appeared to have already suited up for the revolt. “It would be very nice if we could do something that didn’t make anybody unhappy,” he said. “Good politicians hide that fact.”
Wise then said a politically risky — some might say, courageous — thing. “The people on the wealthy side are more organized to oppose this [the residential exemption]. Those who would benefit don’t get organized, and are too busy trying to make sure they have enough [money].”
