EagleTribune.com, North Andover, MA

November 26, 2012

Decision on tax classification gets postponed

By Paul Tennant
ptennant@eagletribune.com

---- — NORTH ANDOVER – It will be another two or three weeks before town residents know exactly how much they’ll be paying in property tax.

Selectmen were scheduled to make their annual decision on tax classification last night, but the vote had to be postponed because the state requires that at least five days must pass after the town’s taxable properties are revalued before a new tax rate can be set.

North Andover’s revaluation was completed just recently, Chief Assessor Garrett Boles explained. Selectmen Chairman William Gordon said the board will act on the question in the next two to three weeks.

The town now has two tax rates: $13.92 per $1,000 of valuation for residential properties and $19.16 per $1,000 for businesses. Last year, the selectmen approved a shift between the residential and business rates of 1.31, meaning that a business pays 131 percent of the tax it would be charged if the town had a single rate.

Selectman Rosemary Connelly Smedile said the board would prefer that any change in rates be the same for businesses and homeowners.

The total value of residential properties increased by about 5 percent during the last year, while businesses had a slight decrease in value, Boles said. He estimated the value of all homes at $3,713,216,144, while business properties are worth $555,383,123.

Ever since North Andover adopted tax classification, the shifts have varied, going as low as 1.18. Should the selectmen keep the shift at 1.31, the average homeowner’s tax bill will rise by $3, while the average business’ bill will drop $72, according to Boles’ numbers.

The rates would be $13.73 per $1,000 for homes and $18.86 for businesses.

While the selectmen couldn’t render a decision on the tax rates last night, they went ahead with the hearing. Only one person spoke, Wilfred Carpenter, vice president of sales and service for the Merrimack Valley Chamber of Commerce.

There are about 300 businesses in North Andover, he pointed out, and most if not all of the owners pay taxes on their homes in addition to what they pay for their companies. Carpenter, who said this was the 14th or 15th time he had spoken to the selectmen about classification, asked the board to be “reasonable” in its decision.

He did not ask the selectmen to consider a specific shift. North Andover is permitted by law to adopt a shift as high as 1.50.

The town also has the option of doing what many communities with relatively small numbers of businesses do: Forgo classification.

If North Andover simply charged one real estate tax rate, the current rate would be $14.40 per $1,000.

With the current shift, homeowners pay 83 percent of the taxes, while businesses contribute 17 percent. If the selectmen got rid of classification, the homeowners’ share would climb to 87 percent and businesses’ portion would drop to 13 percent, according to Boles.

Massachusetts voters approved an amendment to the state constitution in 1978 that allows communities to adopt as many as four classifications for real estate taxes: commercial, industrial, residential and open space.