Above: I love the sight of branches frosted with snow. (2013 photo by Susan Fitzgerald)
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So, the Department of Revenue 2023 real estate tax data for all communities in Massachusetts is not complete yet, but the preliminary data looks like about the same as before. As in 2022, residents of Southborough are again going to pay significantly high real estate tax rates while our commercial and industrial property owners have the benefit of tax rates well below the state average. Residents will pay millions of dollars in additional real estate taxes to maintain this condition.
Those responsible for this situation continue to believe that maintaining low tax rates for the current commercial and industrial property owners will entice the creation of more commercial property thereby adding to the towns tax base and lowering residential tax rates. They stand firmly on the notion that raising commercial and industrial property owner tax rates with a split tax rate will drive out the existing commercial tax base and raise taxes for residents.
Unfortunately, all of this is wrong, not based on fact and expensive for residents.
Lets start with the fact 80% of all the commercial and industrial property in Massachusetts is taxed with a split tax rate and those communities using a single tax rate as Southborough have only 20%. It has to be a surprise to most that within single tax rate communities, which comprise 70% of the communities in the state, they only have 20% of commercial and industrial property. So much for single rates being a driving force for determining commercial development. It is not that simple.
For those who think commercial property drives down tax rates tax rates, consider this. The average tax rate on commercial property within the combined single rate communities is higher than the average residential rate. That is right, when you lump all the single rate communities together, the commercial property owners pay more. This is because commercial property is more likely to be located in single tax rate communities with higher real estate tax rates. Why this is so is not evident, but it is a demographic oddity certain to drive advocates of lower tax rates through commercial development crazy. To see a first hand occurrence of this check out the single rate disaster that has unfolded on Westborough.
Just to be clear and not miss the obvious, the average residential tax rate in split tax rate communities is lower than the average tax rate in single rate communities and not just by a small amount.
Lastly, in 2022, Southborough provided our commercial property owners with a tax rate lower than what is paid on 96% commercial property in the towns surrounding Southborough. This while residents paid a tax rate higher the rate paid on 88% of the residential property in the state. in 2023, the average commercial property tax paid on property surrounding Southborough was $22.24 while Southborough’s rate was $16.28. That is great for commercial property owners in Southborough, but maintaining that low rate is the cause of residents paying millions more in taxes.
So as you write the check for February’s real estate tax payment, keep this in mind. If you are a commercial property owner, be grateful, if you are a resident you might want to wince.
Once the data for 2023 is complete, a more detailed description of the present condition can be made.
The question you pose is this:
Should Southborough vote to change … from having a single tax rate for both residential and industrial property, to having a split rate ? Your propose that … there SHOULD be a change to a higher rate for industrial property, so that residential property would have a lower tax rate, with the result that homeowners would pay less in property taxes.
You have been a tireless advocate for change, which is laudable, but your letter to the editor (above), is a bit confusing.
Please elaborate on your following paragraph, quoted from your letter –which I have slightly edited by (adding) a few words for clarity:
QUOTE: ” For those who think (having more) commercial property (in a town) (helps to) drive down tax rates, consider this. The average tax rate on commercial property (within the combined single – rate communities) is higher than the average residential rate. (Yes, indeed), that is right — when you lump all the single-rate communities together, the commercial property owners pay more. This is because commercial property is more likely to be located in single-rate communities with higher real estate tax rates. Why this is so is NOT evident, but it is a demographic oddity , certain to drive advocates of … lower tax rates through (more) commercial development … crazy. To see a first hand occurrence of this, check out the single rate DISASTER that has unfolded on Westborough.” (END QUOTE).
Also, please explain the meaning of your last sentence, above, about the “DISASTER” in Westborough. What disaster? You are assuming that we residents know so much, about what is happening — regarding tax rates and development in our neighboring towns — when in fact most of us are too busy to pay attention to such matters. Please tell us more.
Hello Dave
Sorry about the delayed response, I was away.
So why is Westborough such a real estate tax disaster?
Lets start with a few facts. In 2022, the residential tax rate for Westborough was $18.49, the assessed commercial tax base is 30.3% of the tax base making it the 19th highest in the state. The $18.49 tax rate on residential property makes it higher than the rate on 95% of the residential property in the state while the commercial property owners are paying a tax rate lower than that on 65%. A very high residential tax rate with a below average commercial tax rate. The average assessed residential propter comes in at $588,576.
With 80% of the commercial property in the state taxed using a split rate, you might ask what would be Westborough’s residential tax rate if they had a split. So, what if they had a typical (average) ratio between the commercial and residential tax rates as found in the current split tax rate communities. With some rather simple math, the residential split rate would be $14.41. That is a reduction of $4.08 or a savings of $2,400 for the average residential property. On the commercial side it would be $28.09. That would make it the 28th highest commercial rate in the state, putting the shoe on the other foot. Ouch !
I am not advocating Westborough move to this condition, but a little compassion for the residents might be in order.
Now the fun part. A couple of years ago I sent a similar message to the Westborough’s Town Manager and their BOS. I am that kind of devil ! It was not well received. I got back a email message blast from the Town Manager. It seems they think they are doing a great job for the residents.
Hope you find this interesting.
I got the chance to ask two people from the Worcester region earlier this week if “Southborough is a rural town.” The first argued its not: it’s between two of the largest Metropolitan Statistical Areas. The second argued that it is because of our open space policy and community character. I wonder what the Southborough-ites of 1727 would think of the town today.
Once again the town is advertising for a DPW Superintendent. The person who was offered the job backed out. Not the first time he pulled this on a town. Now the town is hiring a firm to assist with vetting applicants. The Northborough Road culvert replacement took forever and was way over budget. The St. Mark’s pocket park/parking lot/ intersection realignment has already cost a lot of money for the hacking down of old growth trees, a road that’s a mess. I’m not going to point the finger at Karen Galligan. Her actions and contract were overseen by the real culprit, Mark Purple. He never did the town of Ashland any favors, and he certainly hasn’t done any for Southborough. I think it’s time that he takes a hike so we can get our town back on track. I’m glad my parents aren’t alive to see what has been going on.