[Ed note: My Southborough accepts signed letters to the editor submitted by Southborough residents. Letters may be emailed to mysouthborough@gmail.com.
The following letter is from Al Hamilton, a member of the Select Board.]
To the Editor:
Last night the Select Board received an excellent presentation from the Assessors on the tax rates for 2025. This was an eye-opening experience. The 2025 budget target was to keep the residential tax rate increases in the 4% range. Town meeting passed a budget based on this assumption. However, all the property valuation date required to set the 2025 rates was not yet available. When the dust finally settled and the data was in, residential taxes for 2025 will increase by 6.33%. Given that our residential taxes are already in the top 10% of the Commonwealths communities, this is unsettling. The unexpected increase is the result of 2 factors.
- Rapid rise in residential real estate values, particularly home of average and above values.
- Very little growth in commercial real estate values primarily driven by the high vacancy rates of the office parks in town.
The result is that the tax burden is shifting from the Commercial, Industrial, and Personal (CIP) sectors to the Residential sectors. In the past the town had enjoyed a roughly 80/20 Residential/CIP split. In recent years this split has been steadily increasing the burden on the residential sector to the point where is it now stands at 84.11%/15.89%. This trend is likely to continue in the near future, shifting more burden on to residential tax payers. In dollar terms, about $2,000,000 in annual tax burden has been shifted to residential payers. In order to return to an 80/20, split the town needs about $150,000,000 in CIP development to catch up. This is possible only if we take steps, as follows.
- We need to recognize that we are not going to see a spate of new office parks in the foreseeable future. A CIP strategy needs to focus elsewhere. There are options, a nearby Home Depot is assessed at $10,000,000, a Target at $8,000,000, the Whole Foods Plaza in Shrewsbury at $20,000,000. We all use these types of facilities. Why not locate them in town?
- We need to modernize and relax our zoning ordinances along Rte. 9 to encourage CIP growth.
- We will not be attractive to some forms of CIP development unless we can offer sewer services. Facilities like bio-tech, restaurants, food processors, manufacturers, and grocery stores can view the availability of waste water as positive factors in their location decisions. It is time for us to come up with a definitive plan for waste water services along Rt. 9 and possibly other areas.
- We need to change Southborough’s image as a place to do business. Today, commercial real estate brokers often advise their clients to avoid locating here because of the difficulty of doing business with the Town. The recent Stronger Uprising gym debacle is instructive. After months of dealing with the Town trying to find a path that would allow them to stay in Southborough, Stronger Uprising up and left for Westborough where they were up and running in a matter of a few weeks. This is not a good way to encourage CIP growth. We are in competition for CIP growth with Westborough, Northborough, Framingham, Shrewsbury, Marlborough and others and we need to understand that we are losing, and residential tax payers are paying the price.
- Finally, we need to treat the owners and developers who own and develop Rte. 9 properties as partners and stakeholders, not as pariahs. These partners contribute millions of tax dollars to our coffers and would like to contribute more. We must foster an environment that encourages them to do so.
We need to have a serious discussion about our tax policy and the percentage of the tax burden we want our residents to bear. We have a long list of nice things we want, a new school, sidewalks, community center, more police and fire fighters, library expansion, playing fields, senior services, and more. The question is how and who is going to pay for them. Do we want to look more like Acton (89.89/10.11) and Stow (94.36/5.64) or do we want to look like Westborough (70.46/29.54). These are all nice communities most of us would be happy to live in. We need to decide which path we want to take. Absent an explicit decision, followed by action, the share of the tax burden residents will have to carry will continue to rise.
Al Hamilton
35 Pine Hill Road
In response to sewers and mega stores. In many surveys the residents of this town do not want to be Shrewsbury, Westborough, Framingham or Natick. I think the alternative to big box stores and multi-unit housing might be to promote single family homes, offices and possibly a private for-profit school and other construction that fits in with the residents wishes. Let’s give up on the failed outreach to commercial builders and use the savings to lower taxes. Let’s take a break from multimillion dollar new buildings and lower taxes. Let’s bring in a consulting firm to go thru the towns budget and see what they can recommend to help lower taxes.
The election may bring changes to vouchers for schools nationally. If this goes into place we will have to address the possibility of having excess school space. It is a good time to try a new direction, it is called tighten our belts on spending.
“Politics is the art of the possible” – Bismarck
Jack
I share your desire for increased scrutiny of our budgets and lower taxes but I also recognize the political reality in our town. There is no significant constituency for reduced services/lower taxes in town, quite the opposite. Believe me I have looked.
The reality is that our Town Meeting is sufficiently satisfied with the status quo that they vote our 60+ million in taxes in about 45 min with only modest discussion. That is unlikely to change.
As for hiring a consultant to take a meat axe to the budgets, be careful what you wish for. We just hired such a consultant and they came back with a recommendation for a large increase in our Public Safety departments. The types of consultants that typically review public institutions rarely if ever suggest cuts, quite the opposite.
We could bring in a BCG, Booze Allen, or McKinsey but the costs of those services would dwarf any savings even if they were interested.
I don’t think it is politically possible to shrink our local government. If you accept that then it follows that the only path to controlling the increases in residential property taxes is to make the slice of the pie that is CIP larger. It is pretty much a mathematical fact.
To one of Jack’s points, I think you’d find more support for zoning changes to attract smaller scale retail and commercial projects than for big box stores. That may be too big of a shift for many residents.
I hear people wishing for more restaurants, coffee shops, bakeries, small grocery stores, etc. I haven’t heard any desire for big box stores or mega plazas. (Although, if the town identified a specific area/parcel where that could work, it might be less scary than the generic concept.)
I do agree with Al that making cuts is very difficult to get any support for at Town Meeting. It’s much easier in theory than practice. Everyone would like to pay less, but there doesn’t seem to be an overall agreement on where money could be cut from.
In the vein of “one man’s trash is another man’s treasure”, when one resident/official finds any significant in a budget that they believe is pork that could be trimmed, they usually find a constituency that values that dept/service and believes the budget is correct, or even too low.
Even residents who are hurt the most by tax increases likely rely on or highly value a service that costs more each year to provide a level service for.
From my observations, often we find ourselves in situations where capital investments that were put off or departments under resourced have apparently led to worse financial situations in the long run. (The past reticence to invest in a full time EDC Coordinator and zoning and wastewater improvements seem to be case-in-point.)
I don’t see any quick short-term fixes. But I’ve been happy to see a renewed collaborative effort to improve zoning to be more business friendly. (I’ll be blogging about that later today or tomorrow.)
Hi Al. This is an excellent letter. I appreciate how you have explained in plain English what the issues are and what the town needs to do.
What can the average Southborough citizen who is not on a board or committee do to help, besides vote at TM and voice their opinion to elected officials?
I have lived here for 20 years now. I have seen so many attempts by the EDC and others to get more small businesses that people want in our downtown, like cute restaurants, an ice cream shop, etc. But attempts seem to be foiled in part by the sewer issue. How can we fix this?
Getting larger businesses/a plaza on route 9 would be FANTASTIC. It seems near the 495 interchange would be an ideal location. Is the sewer issue the main problem here? I remember once upon a time there was talk of a soccer center opening over there, but that never came to fruition.
I am at the midlife point where my kids are in high school and college. I am very invested in Southborough and love it here, and I would prefer to stay here long-term. I look at the things we want as a town – all the things you mentioned – and I want those things, too! But I also don’t want to price out existing residents out of town. We need more businesses in town and we need to take action to make it happen, ASAP.
I can’t speak for Al here, but I suspect he was quoting the Home Depot and Target and Whole Foods examples as just that – examples. Those values contribute substantially to the tax base. While several would bristle at a megastore in Southborough, the larger point is worth the highlight: any CIP business will shift the tax burden from residents, and these are just a few examples and valuations. (Al, if you meant something else, please correct me as I don’t want to cloud the larger point).
With respect to “We don’t want to be another Framingham” – we simply can’t. Our own infrastructure prevents that. Even if we improve it to be inviting to business, it’d take time to ever even approach that scale. Starting with smaller scale retail and mixed use is more in kind with what our town might like. I for one hate having to spend most of my money (and my time) on weekends in places other than Southborough (groceries, services, …). I share some of Beth’s opinions with respect to seemingly shifting views, as well as where we have put off investments, only to be worse off down the road.
With respect to the Planning Board itself, it consists of five members, elected for five-year staggered terms.The main charges of the board are to review and approve applications for permits as required by the Town’s bylaws, review and approve subdivisions and developments, and conduct site plan reviews. From time to time the Planning Board proposes and amends zoning bylaws for Town Meeting approval. That last part is critical. The zoning bylaws (https://www.southboroughma.gov/858/Zoning-Bylaws) are one of the two key guardrails with respect to what does and does not get built in Southborough. The other key guardrail is the five-person Planning Board itself.
To Jess’s point about getting involved, here’s what I can share. Note that I am no expert – I’m merely sharing part of the path that I’m on or things I have done.
These are the kinds of things I’ve done and am doing to sit up, take notice, and get involved. The bylaws state what can and can’t be done, and the Planning Board is the body that can re-write those bylaws (to then get voted on at Town Meeting). So, attend a meeting, speak up, get familiar with the bylaws, and let’s work together to keep or change what we collectively want to see.
Respectfully, I hope the people in charge can come up with more creative solutions to tackle this issue than bringing in even more supermarkets and big box stores into town. We don’t need additional ones to clutter the landscape since we already have those nearby, in all the neighboring towns you mentioned. They are all bigger towns than ours in area as well, and arguably much better suited to absorb the added congestion and traffic these commercial enterprises generate. Westboro is typical that way. 21.6sq miles vs. 15.4 for Southborough, and Westboro is often a congested mess. Ditto for Marlboro at 22+ sq. miles. Also a cluster…. most times of the day. We also have a lot more open land to enjoy, still protected, which people seem to take for granted.
Southborough is a residential oasis compared to these other towns. It’s a quality of life issue. I realize it will be difficult to maintain it this way, but I hope we can be a lot more creative and innovative in how we go about dealing with these challenges. I’m not close minded about finding ways to mitigate tax burdens and maintain services, but opening the town this way does not strike me as being particularly enlightened in this regard.
Andre
I used Home Depot, Target and Whole Foods as examples of commercial developments. It is the commercial side of the equation that is suffering the most. I do need to correct you in that we have no “Big Box” stores or grocery stores in town. We are not going to fill the “CIP Gap” with boutiques and coffee shops nice as they might be.
An alternative path would be to find an “Industrial Whale” like a Sanofi. Their facilities on New York Ave in Framingham total over $115,000,000 in assessed values. Regretfully these golden geese are few and far between and vigorously competed for.
Wanting Southborough to remain a “residential oasis” is a perfectly reasonable position to take. The price of this decision is that residential tax bills will rise faster than the overall cost of government as the tax burden shifts further from the CIP side to the residential side. It is not crazy to want to be like Acton and Stow, it just comes at a price. This is a decision we should make with our eyes open rather than just letting it happen.
Poor Al, forever demographically challenged. Does he know Westborough residents pay one of the highest residential tax rates in the state.
But a tax rate is less important than the actual tax bill.
Southborough’s average and median tax bills for homeowners is much higher than Westborough’s because our home values have higher assessments. Still, that’s apples to oranges since their housing stock is different than ours. I don’t know what the assessed value comparison is for similar homes. (I’m guessing it is higher in Southborough, but I haven’t seen any analysis.)
OMG, another one… If Southborough had the tax rate of Westborough’s, the tax bill for the average assessment in Southborough would go from $12,427 to $14,659. That would be an 18% increase and would apply across the board for all residential tax payers in the town. Yes tax rates matter, they matter a lot.
Al is promoting a theory he cannot prove.
I think you missed her point.
Carl
Looking at the tax rate is not particularly instructive. Let’s look at the numbers that matter. The size of the check that the average residential tax payer has to write 4 times a year. Here is the 2024 date (the most current available)
Acton – $13,992/yr
Southborough – $12,427/yr
Stow – $12,499/yr
Westborough – $11,680/yr
Stow is a bit of an outlier but the trend is pretty clear. Westborough residential tax payers with a 70/30 split pay significantly less that Acton and Stow residential taxpayers. with a 89/11 and 94/6 ratio.
Relying on tax rates rather than actual taxes paid can be misleading. First it assumes that the assessment standards and timing are comparable. Secondly, the housing mixes may differ.
Relying on average tax rates and payments is not perfect as a few large properties can skew the averages just like a few very rich people can skew income averages but this is the data we have which is better than no data at all.
Here is the source I used:
https://www.mass.gov/lists/property-tax-data-and-statistics
The reason the average tax bill for residents of Westborough is lower than Southborough’s is because the average Westborough residential assessment is 80% that of Southborough’s. Even with a tax rate 18% higher than Southborough’s this still creates an average tax bill lower than Southborough’s.
Carl
You have released my inner nerd. I went to the state database for 2024 and selected 21 towns along 495 from Chelmsford to Foxborough and did a regression on the percentage of the tax burden carried by residential property vs the average tax bill. The results were statistically significant (R squared of .95 and a coefficient T of 20). The results suggest that for every 1% increase in the percentage of the tax burden carried by residential property the average tax increases by $129.
There is a bit of heteroskedastity in the data but the results are pretty solid.
PS – Thanks for the challenge I like doing this sort of stuff.
Al
Your regression is an interesting one. Keep in mind the average tax bill is the product of multiplying the tax rate by the average assessed value (divided by 1,000). So the question is, is it the reduction in the tax rate or the reduction in the average assessed value causing the average tax bill to decrease as the parentage of CIP property increases. I have checked this out before and there is no direct correlation between increasing CIP as percentage of the tax base and reduced tax rates. So what you are looking at is lower average residential assessments with increasing CIP development. Your poster child, Westborough, is a fine example of this with an average assessed value 20% less than Southborough’s, a tax rate 18% higher, but still manages to have an average tax bill below Southborough’s. It is this set of circumstances that has driven the 30% of the communities in Massachusetts with 80% of the CIP property to all have split tax rates in an attempt to counter the effect you are advocating. If your analysis were accurate, why would they split the tax rate if your regression was being driven by lower tax rates?
Saw Diana last night, asked her if I was driving you crazy. We were working on her project to provide winter coats for local refugees. I also know you put a lot of effort in growing food for local food pantries, so don’t for a moment think I don’t appreciate what you guys do. With all the trouble in the world, discussion of taxes is more of a sport or side show. I thought it was important I said that.
Carl
Carl
Thank you, I enjoy a good discussion rooted in facts and data. I also appreciate that you care. We might not agree but this is an important thing to discuss. Now back to the matter at hand.
I only chose Westborough as a point of comparison because they have taken advantage of Rt 9 in a very different way than we have and they are our neighbors. There are clear economic, and housing stock differences.
The state maintains a town revenue database. I took a look at it and it was instructive.
The big differences in Service Charges and Licenses and Permits is heavily driven by the fact that they have a much larger commercial base which requires things like fire and health inspections, building permits, and victual and liquor licenses. This is a residual benefit of having a healthy diverse commercial base.
Finally, I need to deal with the “Tax Rate”. The tax rate is not a policy number it is a residual number that pops out at the very tail end of the budget process. It is not even set until months after the budget is approved.
The School Committees, Select Board, Advisory and others don’t start the budget with a target rate in mind. They ask “How much money do you think we need to do what we did last year?” After a little arm wrestling the question becomes ” How much money do you think we can get Town Meeting to say yes to. Once Town meeting says yes the budget is approved but there is only a vague idea of what the tax rate will be. The Assessors will only be able to tell us about 6 or 7 months after the budget is approve what the tax rate will be.
That is why I think looking at average tax bills or better yet the median tax bill is more instructive.
Let me try this again. If you own a home in Westborough worth $500,000 you will pay 18% more in real estate taxes than a home in Southborough worth $500,000. It may be your opinion you can purchase a more desirable home for $500,000 in Westborough, but you will pay more in real estate taxes for that home. Yes the average tax bill in Westborough is lower than Southborough’s but that is because the average home value is significantly lower. The point I was trying to make is here we have a member of Southborough’s Select Board writing a long letter about the real estate tax benefits to residents of Commercial and Industrial development pointing to Westborough as an example of the tax benefits of CIP development when indeed the opposite is true. There is a reason the 30% of the communities in Massachusetts with 80% of the CIP property have a split tax rate charging the CIP property owners nearly twice the residential tax rate, it is because this theory of lower residential tax rates with greater CIP development is not a reality. This is the king has no clothes story.
Hi Carl, I think the comparison you want to make is; how much in absolute taxes do two equivalent homes pay between Westborough and Southborough? Ie 3 bed 3 bath, same age, etc. It may indeed be the case that Westborough is more expensive, but I have not checked.
-Alex
I believe that is what assessors do. It is the “etc” that has a significant impact on the value of a property.
We can still approximate this. I went to zillow and looked, and oddly Westborough homes look more expensive. Granted this is from an “internet” search, I find this interesting. I actually am new to Southborough and looked extensively in both Southborough and Westborough. One to two years ago Southborough was significantly more expensive. Odd!
I think @ Al Hamilton’s letter is a good read and I think his goal is to invoke a positive discussion. I personally would like a more convenient grocery store and pharmacy, but it is not a big deal. None-the-less this is a good discussion to have.
Al,
I caught up on the SB meeting from the other night – very interesting topics including the tax discussion. While I agree with you that the town needs to increase the % tax contribution from sources other than residential, I’m sure residents aren’t complaining about their higher property taxes when they sell their homes on the open market. Seems a bit of a red herring to me to complain about higher taxes when our homes are appreciating 100% (or more) in value.
I appreciate the back/forth between you and Carl on the merits of property tax rates (a helpful education for a layman like myself), but it would be also helpful to hear more details from the Select Board (SB) regarding things like the Rt 9 sewer, the town’s marketing strategy to attract new/larger business on the scale you suggest are needed, and potential candidate sites along Rt 9 for such businesses. You cite Home Depot as a potential example of the type of business needing to be attracted. Based on some quick desk research, a Hope Depot requires approx.150,000 sq ft of footprint – nearly 4 aces. Any idea of what parts of Rt. 9 can absorb 10-15 commercial developments of this scale to hit the $165 million of incremental commercial development you cite that will be needed to offset the residential tax burden?
I look forward to seeing the detailed and comprehensive plan from the SB on how to increase the CIP contribution to our tax base. It will be great to see the SB leading the charge, of course in seamless collaboration with the other relevant Southborough boards. Perhaps something to include in a future SB meeting agenda in the coming months so we can understand what’s in potentially in store.
Perhaps ahead of the formal SB meeting, you could provide some insights on these (or other relevant considerations) in this blog or other community forums. I’m sure you’ll have a captive audience waiting to hear what you and others have in mind.
Erik Glaser
9 Skylar Drive
Erik
Thanks for the thoughtful note. I don’t claim to have all the answer but here are a few thoughts:
All of this is with an eye towards shaping what the tax policy and split will be 5 to 10 years hence.
I’m interested in getting feedback from Carl’s post. What is the residential tax bill on a $500,000 house in Westborough and what is the tax bill for a $500,000 house in Southborough? If it is significantly higher, why is that?
We need to be clearer to the town how increased commercial development in Southborough will impact the residential tax bills.
The tax bill is higher in Westborough for the same price home because their rate is higher, as Carl pointed out in his comment.
My comment related to the question that others have since echoed. If you compare similar homes, what are the assessed values, and therefore tax bills, in each town?
One thing that I forgot to include in last night’s post that I need to add from the Select Board’s discussion last week — the fact that Southborough is in the top 10% of highest average residential property tax bills in the state.
OK. So the commercial development in Westborough isn’t enough to drive the residential tax rate lower than Southborough with less commercial development?
Again, what you are asking for is what is done by every town’s assessor.