To the editor:
The proposed residential tax exemption is not perfect. Towns have limited options under the state law to provide targeted tax relief.
One flaw is that the exemption will benefit some property owners that do not need assistance along with those that do. But this is not a reason to reject the proposal.
Many very low-income owners live in the homes they grew up in and inherited. The value of the home has likely increased significantly since it was originally built or purchased by a previous generation, but that value increase is unconnected to the ability of the current owner to pay taxes.
Programs to provide relief for owners in this situation are common because the alternative is longtime owners being forced to sell their homes — or farm and forest owners being forced to sell to developers.
Many communities tax farms, open land, and forested areas at their current use value, rather than at their potential development value. All owners of such property benefit regardless of income.
The same is true for tax exemptions for seniors, which are often not restricted to those with lower incomes. At the federal level, the mortgage interest deduction allows interest on a mortgage of $750,000 — hardly targeting lower income owners. The benefit to those in need offsets the collateral benefit to those that are not.
The most frequent objection I hear from my second-home-owning friends is not so much to the proposed exemption itself, but to the fact that nonresidents are not permitted to vote at town meetings or in local elections. Shifting the tax burden toward second homeowners, even at the minimum 10 percent as the state’s law permits, as Patrick White has proposed, seems to many to be adding the insult of higher taxes to the injury of not being permitted to vote.
While I am a primary resident, I understand the feeling of “taxation without representation” that many second-home owners express. However, I urge everyone to keep the two issues separate. The issue of whether non-resident property owners should be able to vote is not related in any way to whether a residential tax exemption is worthwhile except for the emotional connection. When the exemption is considered on its own merits, I believe it passes the test of being the best currently available approach to address a problem that exists today.
The available data from the Census and other sources confirms that there are many Stockbridge households with very limited incomes, and that this is not limited to elderly residents. Forty-four percent of resident households have annual incomes below $50,000. Seventeen percent have incomes below $25,000.
Thirteen percent of Stockbridge residents live in poverty, approximately equally divided between seniors and younger households. The data does not indicate how many of these low-income households are owners and how many are renters but those that are owners are a primary target of the proposed exemption.
Another potential goal is to attract younger households to Stockbridge. The median home value in Stockbridge is 18 percent higher than the state average, but the median household income in Stockbridge is 26 percent below the state average. This mismatch of incomes and home values makes it very difficult for area residents to purchase homes in Stockbridge. The disparity is caused primarily by the strong market for second homes which drives up home prices far beyond what the residential market could otherwise support. The proposed exemption partially offsets the higher purchase cost by reducing the tax burden, allowing the money saved on taxes to fund a larger mortgage. This benefit should not be overly touted, but it provides an incentive for younger buyers to consider settling in Stockbridge.
The shift in tax burden resulting from a 10 percent residential tax exemption is estimated to cause non-resident tax bills to increase by three percent. This comes to $250 — plus or minus — for a property valued at the average level in Stockbridge of $600,000. The exemption program does not have to be perfect to justify this small additional expense. The benefit to low-income Stockbridge residents is sufficient to offset the additional cost until a more targeted program can be approved by the state and implemented locally.
Jon Gottlieb
Stockbridge
