Bullshit is the art of deceit through obfuscation....and there'll be a ton of it to go round at Thursday's Barnstable Council hearing....

Some in town hall are deliberately trying to mislead, while others don't know what they're talking about,

 

and for many both circumstances apply.

On Thursday the town council will take on the allocation of the tax levy for F/Y09 tax factor, better known as the split tax rate/residential exemption.

Page 17 of the agenda states,

 

“If the maximum 1.5 shift is adopted by the council the average residential property owner would pay 6.4% less in taxes while all CIP property owners would pay 150 percent more in taxes.”

 

CLICK ON IMAGES TO ENLARGE

 

 

Obviously the statement is not true. 

 

 The increase to commercial property owners would be one-third; a 50% increase.

A 50% commercial class property tax increase under normal circumstances would be draconian, but not in Barnstable where commercial properties have been egregiously under-assessed for 18 years.

To prove it;

 

The commercial levy between 1990 and 2008 increased only 27% ($1.6 million) while the residential levy increased 128% ($45.3 million).

 

Massachusetts law requires that residential and commercial properties be taxed at their “fair market” or “cash value.

While sales prices drive residential property values, commercial properties are typically assessed by the revenue generated via the income/expense method, because commercial property sales prices typically include invisible assets not associated with land and buildings.

The problem for assessors and homeowners is that most businesses do not return I/E Statements because [1] CEO's don't want their numbers revealed, and [2] the penalty for failing to return the documents is only $50 added to the next year’s tax bill.

Last year the Assessor received a total of $45,000 in $50 penalties for failure to return income/expense statements which means some 900 commercial property owners failed to return their I/E assessing documents.

The legislature is currently debating a bill that would increase of the penalty for failing to return I/E assessing forms to a percentage of the tax bill.

Massachusetts taxation policies for the tax classes are far from perfect, but in 1979 the legislature adopted the tax classification law which permits the town council to tax commercial properties 50% more than residential properties through the imposition of a higher tax rate.

118 Massachusetts cities and towns have adopted the split-tax rate as a visceral policy to achieve tax equity between the tax classes.

 

The state income tax deduction for renters was last increased in 2001 when it was increased from a $2,500 maximum deduction to a $3,000 maximum deduction.

According to United States Census Bureau data from the 2000 Census, the number of owner occupied housing units in Massachusetts exceeds the number of renter occupied housing units (1,508,248 and 935,332, respectively).

Homeowners need equity as well.

 

The housing inflation boom caused Barnstable’s tax rate to be cut 55% resulting in a commercial property levy increase of only

 

$63,000 or eight-tenths-of-one-percent from 2000 - 2008,

 

while the homeowner levy increased $25 million of 45%.

To compound the disparity in equity of the residential and commercial class, there are 54 fewer single family residences in Barnstable over the last eight years, while significant upgrades were made to the commercial class, including a doubling of the retail space at the Cape Cod Mall (250,000 – 535,000 square feet), and the construction of a super Stop and Shop, three CVS pharmacies, a Brooks Pharmacy, and B.J.’s to name a few.

Is it fundamentally fair for homeowners to incur a 128.6% property tax increase while commercial property owner’s levy increased only 27.6%?

By adopting the maximum 1.5 – 1 tax shift the council would close the tax increase gap to 128.6% to 91%.

 

Joakim’s botched recall attempt based on her promise to support the split tax rate in 2005 probably put the kibosh on its passage well into the future.

The recall may have been a double edged sword that came back to bite homeowners, but the equity issues remain.

There is talk of an override in the spring to cover the $7 million shortfall to cover the level funding of the school districts.

Ironically the increase in the tax rate to raise the needed $7 million is virtually the same as the decrease in the tax rate resulting from the adoption of the maximum split tax rate.

By adopting the maximum split tax rate on Thursday, the Council will set the stage for a probable “Yes” vote on an override in the spring.

Conversely should the council adopt the factor of one on Thursday, the act will be the kiss of death to the override.

I think it's time for the council to give some serious consideration to adopting the split tax rate before 200 teachers are pink-slipped in the spring, classroom sizes increased to 40 - 50, gym, sports, music, and all extra curricula activities cut, school bus fares doubled, etc.

Your call, Janet.

 

Barnstable's commercial tax rate is the twenty-second lowest of Massachusetts 351 communities;