Property tax hikes cause some to resist preservation surcharge

The hefty property tax increases for many Boston homeowners reflected in tax bills for 2016 dominated conversation on the one percent Boston-specific surcharge question for community enhancement on the November ballot at the Columbia-Savin Hill Civic Association’s monthly meeting on Monday.

If approved, Question 5 on the Community Preservation Act (CPA) will result in funding from that surcharge, which has been calculated to average $24 in cost per city taxpayer based on property values, being used for the preservation of historic buildings, the creation and maintenance of open space, and housing construction.

Eileen Boyle, the association’s president, brought up the $1,100 property tax hike that she and others on her street paid this year.

“I don’t know where that original increase went,” Boyle said. “This is another tax to homeowners,” she added, a reference to the surcharge.

As CPA advocates have made the rounds leading up to the Nov. 8 election, community members have pointed to the city’s already-high dependence on property taxes and questioned the need to increase their burden even incrementally.

Some homeowners certainly saw an increase in their property taxes in 2016 beyond the rates of the previous two years, said Ronald Rakow, the city’s commissioner of assessing, in a telephone interview.

In 2016, the residential value increased by 11.2 percent, which caused the residential tax rate to decrease by 9.2 percent. The percentage decrease reflected the tax levy limit, which caps annual increases at 2 percent over the previous year.

For all that, Rakow acknowledged, many residents did see a tax increase despite the overall drop. The property average for a single-family home is about $3,500, about 40 percent below the state average.

“It’s all driven by the real estate market,” Rakow added. “People in Dorchester have seen that, while after the recession in 2007 and 2008 their real estate [values] went down quite a bit, more recently we’ve seen a very strong real estate market, and people have seen their values and the valuation of the homes increase. The assessments have to reflect that by state law.”

In an interview with the Reporter, Sam Tyler of the Boston Municipal Research Bureau noted that property tax increases would have been much greater without the 30 percent residential exemption, which reduced the average by $1,962, and the effects of the city’s classification system, which allows the burden on city taxpayers to shift largely to commercial properties, accounting for an average property tax decrease of $2,156 for a single-family home.

“By these two tools,” Tyler said, “the city has made a significant effort to mitigate the residential tax bill increase. The homeowners may not like the tax bill increase, but it is mainly because of the appreciation of value of their homes.”

With respect to the ballot question on community preservation, those favoring a “yes” vote expect the revenue generated by the surcharge and by state matching funds to bring in about $20 million a year for the three designated CPA categories. A board, whose members are mostly appointed by the city, would review and approve proposals that are are tracked on an open database.

More than 160 communities have adopted the CPA – with surcharges ranging from one to three percent – since it was signed into state law in 2000. None have repealed the measure.

Several exemptions are built into the surcharge initiative, including those for seniors and low-income households. The first $100,000 of assessed property value is exempt from the tax. And tax levels can vary dramatically across neighborhoods, so homeowners can look up an approximation of their surcharge at cpainfo.boston.gov.

The property tax burden on commercial spaces would extend to the CPA surcharge, which is supported, or not entirely opposed, by the business community this year. Business resistance accounted in large part for the defeat of a two-percent CPA proposal in 2001.

As to where the money goes, the distinction between the CPA and the general use of tax revenue involves the specificity of the programming. Property taxes, which account for 68 percent of the city’s total operating revenue, are allocated according to the municipal budget.

CPA funds can only add to established expenditures, Tyler said, and only in those three categories of housing, preservation, and open space. The surcharge revenue “cannot supplant existing dollars,” he said. “If we’re spending city money for parks maintenance, [the CPA] has to augment or increase the amount that’s being spent.”

Mayor Martin Walsh, who supports CPA adoption, will join the Yes for a Better Boston campaign at Town Field in Fields Corner at 9:30 a.m. today (Oct. 6).


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