Tax reform proposals could discourage business investment

In her letter to the editor, Dana Dapolito writes: "In a nutshell, this plan shifts the tax burden from lower-priced residential properties to more expensive homes, commercial properties and second-home owners through the use of a “Residential Exemption.” I think this plan is shortsighted and not suited to a small rural town such as Great Barrington."

To the Editor:

Michael Wise, a Great Barrington Finance Committee member, has presented to the Select Board a proposal for a “Split-rate” method of taxation because “Great Barrington’s taxes are high enough that some people are finding it unaffordable to live here.”

In a nutshell, this plan shifts the tax burden from lower-priced residential properties to more expensive homes, commercial properties and second-home owners through the use of a “Residential Exemption.

I think this plan is shortsighted and not suited to a small rural town such as Great Barrington. Most of the places where it is used are in the Boston metro area and the Cape, with many apartment complexes and/or a higher proportion of second-home owners.

Those whose taxes will be increased are not necessarily non-residents. Many older local full-time residents purchased their homes in the 1970’s, 80’s and 90’s and the valuation on the home has greatly increased. In some cases, their incomes have decreased due to retirement, illness, job loss, etc. As a result, the tax will be regressive for many people, when you take income into account. Also, apartment dwellers are not eligible for the Residential Exemption; the owner of the commercial property would receive a tax hike which would be passed along to tenants. Thus, the least financially able among us, would be penalized.

This system will also create a new bureaucratic cost to administer, requiring additional staff and benefit expenses, and possibly resulting in contentious appeals or lawsuits. In addition, any level of fairness would require developing a ratio of a family’s income to its assessed property value. This would involve income reporting with all its inherent manipulations.

Shifting the tax burden from residential properties to commercial properties is contrary to the Town’s philosophy of attracting appropriate businesses to Great Barrington. One of the factors that new business owners look at is the property taxes that they would need to pay both for their business and their home. Would our well-intentioned decision to help reduce taxes actually reduce our tax base because prospective business owners choose to locate elsewhere? Would Jane Iredale have chosen Great Barrington for its headquarters if this taxation plan had been in effect?

This plan would surely have a negative effect on real estate values in Great Barrington. It may lead to middle and upper valued homes needing to reduce their selling prices in order to stay competitive. This could cause the assessment valuations of more expensive homes to decrease resulting in a higher tax rate for everyone.

There is no question this plan will discourage second-home owners from buying properties in our town. Stockbridge, with its lower overall tax rate has a second-home rate of 50 to 60 percent and treats these homeowners with respect through transparency and communication. In Great Barrington second-home owners comprise only about 15 percent of total residences because of our disproportionally high taxes. As a result both full-time and second-home residences in Stockbridge enjoy a real estate market value of up to 10 percent more than comparable homes in Great Barrington.

Candidate Bill Cooke has pledged to support this change. Although no innovative thinking should be, or has been, dismissed by our candidates for Select Board, incumbent and Candidate Sean Stanton and Candidate Karen Christensen have both stated it needs much more study. Ms. Christensen likened it to rearranging the chairs on the Titanic. Some people may stay dry longer, but eventually everyone will go down with the ship.

We need a comprehensive plan to reduce taxes in Great Barrington for everyone, not just rearrange them. There are fundamental changes that have to be made to our Regional School District Agreement and the Choice-In and Tuition-in programs our school district participates in, as well as slimming our municipal budget through, for example, consolidation and increased efficiency.

None of this is easy, but our representatives must begin to actually represent the residents of Great Barrington and get the job done.

Dana Dapolito

34 Castle Hill Ave.

Great Barrington