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Williamstown Select Board Looks at Property Tax Relief Ideas
By Stephen Dravis, iBerkshires Staff
05:12AM / Tuesday, December 05, 2023
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WILLIAMSTOWN, Mass. — The Select Board last week looked at a number of alternatives that could help the town make its property tax system a little more equitable.
The issue of how property taxes disproportionately impact lower- and moderate-income homeowners came up in the summer, when newly-elected board member Stephanie Boyd suggested using the Residential Tax Exemption to make the town's main source of revenue a less regressive tax.
The RTE, she argued, would shift more of the property tax levy onto owners of higher-valued homes and reduce the tax bills of those whose homes were assessed with a lower value.
At the time, Andrew Hogeland argued that the RTE was a blunt instrument that would give property tax relief to owners of lower-valued homes regardless of their income or assets. Hogeland said there were better alternatives that could target the tax relief to those who need it.
Last Monday, he laid out four possible programs the town could pursue — two of which, unlike the Residential Tax Exemption, would require a home rule petition to the Massachusetts Legislature.
The first item on his menu would not.
State law allows municipalities that participate in the Community Preservation Act to exempt residents who would qualify by income for low-income housing or, for seniors, low- or moderate-income housing.
If adopted by both town meeting and a ballot vote at a regular election (Hogeland suggested the 2024 federal election in November), the exemption would mean, for example, that a family of four earning $81,200 (80 percent of the area median income, or AMI, for a family that size) would not have to pay the CPA surcharge on their property tax bill.
"That would get some, admittedly, limited relief to some people," Hogeland said.
A 2 percent surcharge on property taxes funds Community Preservation Act grants in town. The surcharge is calculated after the first $100,000 of a property's value is exempted. For a median-priced home in Williamstown in fiscal year 2024 ($395,100), the tax bill is $5,986. The CPA surcharge on that same home would be $91.48.
Hogeland's second proposal follows up on a property tax relief measure that town meeting adopted in 2023.
At May's meeting, the town raised the income and asset limit for the Senior Property Tax Exemption in town and pegged those numbers going forward to the federal consumer price index as allowed by Massachusetts General Law.
Hogeland pointed out that other municipalities that started tying the income and asset limits to the CPI years ago have significantly higher limits. For example, Stoneham, which began using the CPI adjustment in 2001, has an income limit for a single senior of $32,584, compared to the $20,000 Williamstown was able to adopt in May.
Hogeland now proposes that town meeting pass a home rule petition asking the Legislature for permission to update all the town's income and asset limits to retroactively use the CPI adjustments to the fullest extent available and lower the age of eligibility to claim the senior exemption.
"For the property tax exemption, I'd like to lower the age as far as we can, all the way down to zero," Hogeland said. "Sixty-five is not a magic age anymore. Most of these programs were set up when everyone retired at 65."
A different home rule petition would be required to implement Hogeland's third proposal: establishing a municipal property tax exemption based on the state Senior Circuit Breaker income tax program.
He noted that the commonwealth's income tax relief program was utilized by 92 Williamstown tax filers in 2021, the most recent year with data available. And those residents had an average claim of $937.
He cited eight different municipalities that already have successfully earned the legislature's approval to institute a parallel local Senior Circuit Breaker modeled on the state income tax program.
Unlike the home rule petition on the Senior Property Tax Exemption, the Senior Circuit Breaker has those precedents, which could help a home rule petition from Williamstown move relatively quickly through the sometimes Byzantine process in Boston.
"If you file something now, it won't get acted on until 2025," Hogeland said. "Some of these go through quickly. Some take a couple of years. If we want it to go through quickly, we should probably follow one of these models."
One common denominator in all of Hogeland's proposals is that beneficiaries of the tax relief programs, if adopted, would need to apply and demonstrate their income eligibility to the town — as seniors already do with the Senior Property Tax Exemption.
Hogeland outlined a fourth option that could arguably provide an indirect benefit to low- and moderate-income residents. But he expressed mixed feelings about the idea and whether the benefit would reach the intended target and made no proposal beyond further study.
In October, the state created a local option for municipalities to give a property tax exemption to landlords who rent at an "affordable housing" rate to tenants whose income was less than 200 percent of the area median income.
Hogeland said he was not sure that the potential of such an exemption would change landlords' behavior, and he questioned whether tenants would be hesitant to provide their income tax return to their landlord to verify eligibility.
Randal Fippinger asked whether the new state law requires any of the financial benefit to be passed on to the renters themselves, and Hogeland replied, "Bingo. I see nothing here that indicates the tenant benefits at all."
Boyd argued that it is worth considering the rental exemption if it does, in fact, incentivize landlords to lower rents and open opportunities for residents with lower incomes to come to town. She also pointed out that one of the arguments against her RTE proposal in the summer was that it would not have applied to rental properties; the newly created property tax exemption for property rented to low-income is the only one of Hogeland's proposals that would.
The board agreed to continue the discussion at its Dec. 11 meeting with an eye toward developing warrant articles for one or more of the Hogeland's proposals.
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