New tax rates affect households differently

UPDATE: When the town published the official notice of the June 6 Financial Election, they posted a higher tax rate than the rate initially recommended. Instead of going from the current rate of $7.48 per $1000 of value to $8.95 as had been proposed, the new rate published in the notice is $9.04. This additional nine cent hike adds about 1% to every property owner's tax bill. I have updated the numbers in this post to reflect that new rate.

Charlestown’s tax rate – the amount of tax you must pay for every $1000 of assessed property value - is going from $7.48 to $9.04 $8.95 on July 1. That increase of $1.54 $1.47 looks like a jump of almost 21% 20% but it’s actually driven almost entirely by the drop in the town’s overall property values of $400 million and the need to adjust the mil rate to compensate. Only 21 cents out of the increase is due to increased town operating costs.

Our recent reassessment led to a drop of around 15% in the total value of property in town - $400 million gone pooooof due to the Recession, though our town is still worth more than $2.3 billion.

But let's focus on the disparity in the impact of these numbers on different families with different types of houses. The average middle-income home dropped about 13% in value while the average millionaire home dropped by about 20%. That translates into big differences in who pays the town’s taxes – and a major shift of the tax burden from non-resident millionaires to middle-income permanent residents.

For comparison, let's look at how the new Charlestown tax arithmetic will affect three different groups of Charlestown tax payers: the members of the Charlestown Democratic Town Committee, the leaders of the Charlestown Citizens Alliance and the five members of the Charlestown Town Council.

I used the unique Progressive Charlestown Magic Tax Calculator to do the math, pulling public information from the town assessor database and the town tax payment database. These three databases are all available to any of you to use, and they are pretty easy to use.

The average assessment value for Charlestown Democratic Town Committee members's homes is now $379,000. Their new tax bills will climb by an average of 11.25% 10.25%. Only one CDTC member will see a reduction (-2% -3%) while one member will see a 40% 39% tax hike. 

The average Charlestown Citizens Alliance leaders's home is now assessed at $722,000. CCA leaders, by contrast will experience only a 3.4% 2.4% average tax increase. Almost half of CCA's leadership will pay less in taxes, including Kallie Jurgens whose tax bill will drop by 9% 10%. Kallie claims Stuart, Florida as her legal residence.

Town Council members tax bills will go up an average of 7.2% 6.4%. Tom Gentz will pay 9% 8% more. Dan Slattery will pay $62 or less than 2% 1% more. Marge Frank’s bill grows the most of any council member, up 15% 14%. Greg Avedisian will pay 11% 10% more. Lisa DiBello is the only Council member whose tax bill will go down by $4. (-1%). The average assessment for the homes of Town Council members is $581,000.

	Average home value (new assessment)	Average change in taxes for 2011-12
CCA Leadership	$722,000	+3.4%
Town Council	$581,000	+7.2%
Charlestown Dems	$379,000	+11.25%

So generally, the arithmetic works like this: the higher priced properties will do a whole lot better in the upcoming tax year. Homes with lower assessments, not so much. The CCA leaders, with their homes averaging three-quarters of a million under the newly assessed numbers, will only see their taxes climb by 3.4%. By contrast, the CDTC leaders, whose homes are worth roughly half as much, will see their property taxes climb by almost four times as much.

Everyone's situation is different of course, so you should check your own numbers using our magic calculator. But over the coming months, the question of whether Charlestown's property tax is fair, or loaded in favor of our out-of-state millionaires isn't going away.

Author: Will Collette