HAVERHILL — It was a familiar story when the City Council set the new tax rate last night — homeowners will get a break, businesses won't.
The council adopted a 1.50 classification factor for this fiscal year, meaning businesses will be taxed 50 percent higher than they would if the rate was the same for all property owners.
Business and residential owners will see their tax bills go up, however.
The average residential bill will increase by $47, the average commercial property bill by $1,135 and the average industrial bill by $2,295. The bill for the average single-family home will increase by $109.
The council voted 7-2 for the 1.50 split. Councilors Ken Quimby and James Donahue were in opposition. Quimby said he would not vote for anything that increased taxes; Donahue was the only councilor who did not comment at the tax hearing.
After the vote, City Council President Michael Hart stressed the council did not raise taxes last night. In fact, that was done last summer, when the council approved Mayor James Fiorentini's spending plan that relies on taxing property owners at the levy limit. State law allows communities to tax up to the same amount as the previous year including new growth, plus a 21รขÑ2 percent increase.
Last night's public hearing and vote was to decide how the city's tax burden — $78.1 million — is to be shared between residential and business ratepayers.
James Jajuga, president of the Greater Haverhill Chamber of Commerce, made a spirited, but resigned, plea for the council to consider lowering the tax factor in favor of businesses. Doing so would have meant requiring residential property owners to pay more, however. There was no support for that.
"I'd like to ask you to go under 150, but I don't think that's realistic given the economy," Jajuga said.
Jajuga asked councilors to keep businesses in mind when the economy improves. He highlighted the business community's many contributions to local charities, such as the renovation of the Haverhill Boys Club and its sponsorship of community events, such as next month's downtown holiday stroll.
"These businesses employ Haverhill residents, pay taxes and spend money in the community," he said.
Jajuga argued the unfairness of a system that pits businesses against residents each November, and he advocated for a new law to change the process.
"But I understand the politics of this vote, having been (a politician)," the former state senator said. "Just keep us in mind when things get better. As local aid returns and tax receipts come back, I ask you to think about the business community and not give it away to everyone who comes to you for money. Keep some for the business community that supports this city."
Last year, the council tried to lower the factor to 1.45. It initially voted 5-2 for the 1.45 factor at the urging of Jajuga. But Fiorentini vetoed the 1.45 split, and the council eventually passed a 1.50 factor.
Last night, City Councilor David Hall made the motion for the 1.50 factor — the same as it's been for at least a decade, except for two years when it was 1.60. This year, Haverhill could not go higher than 1.50 without special approval from the state Legislature.
"Senior citizens are trying to stay in their homes longer today," Hall said. "I'm here for the widows and the widowers living on $1,200 a month when all their bills are going up."
City Councilor Michael McGonagle said last year he favored lowering the tax factor to give small business owners like himself a break, but not this year.
"I understand the importance of jobs and small businesses," he said. "But this recession makes me feel it's more important to keep (the split) at 1.50."
City Councilor Mary Ellen Daly O'Brien said businesses are better equipped to pass along increased expenses than homeowners and families. She suggested residents frequent Haverhill businesses to help make up for the tax shift.
"My family buys and shops local and avoids going out of town for things we need whenever possible," she said.
City Assessor Stephen Gullo gave the council a presentation prior to the vote. He said single-family home values in the city fell for the second consecutive year. The average home in the city is now valued at $272,262, down from $293,847 in 2009 and $313,116 in 2008, he said.
Commercial property values fell by about $17,000, and industrial land decreased in value by $7,000 on average, Gullo said.
The current fiscal year 2010 runs from last July 1 to June 30. This year's "actual" tax bills, based on the new factor and rates, will be mailed in early January, Gullo said. Previous bills sent this year have been estimates.
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