HAVERHILL — Property taxes for the owner of the average single-family home in Haverhill will rise by $93 in the coming year under the new tax plan approved by the City Council. 

Even though the new rate of $13.44 per $1,000 in valuation is lower than last year’s rate of $13.60, homeowners will pay more because the value of residential properties has increased.

This week the council held its annual tax hearing, which considered public comment, followed by a vote to decide on how the city’s tax burden — $111 million to be raised in total — will be shared between homes and businesses.

Haverhill uses the state’s tax classification law when setting the rates. That law allows communities to gives homeowners a break by setting a residential rate that is lower than the rate charged to businesses. A tax rate is the amount of money a property owner pays per $1,000 worth of property.

The council voted 7-2 Tuesday night to adopt Mayor James Fiorentini’s recommended tax classification rate of 1.65, meaning businesses will be taxed at a rate 65 percent higher than they would be if the rate was the same for homes and businesses. The previous year’s classification rate was 1.63.

Council President Melinda Barrett and councilors Thomas Sullivan, Joseph Bevilacqua, Mary Ellen Daly O’Brien, Michael McGonagle, Colin LePage and William Macek voted in favor of the tax plan, while councilors Tim Jordan and John Michitson were opposed.

According to the city assessor’s office, the average single-family home in Haverhill for the current Fiscal Year 2021 is valued at $356,446. The average single-family home was valued at $345,418 last year.

Under the new tax plan, taxes for owner of the average single-family home will increase $93 for the year — from $4,698 to $4,791.

Homeowners can expect to see the increase in their next quarterly property tax bills, which they should receive the first week of January. Those bills will reflect the new tax rate and the new property valuations, according to the city assessors office. 

The new property valuations will also be published on the city assessor’s website sometime in January.

Because the city shifted more of the tax burden to the business community, the average commercial property assessed at $662,845 will see a tax increase of $175 — with its annual bill going from $16,171 to $16,346. The new commercial rate of $24.66 per $1,000 of valuation is an increase from last year’s rate of $24.58 per $1,000.

The tax bill for the average industrial property will drop $358 to $26,782, reflecting a reduction in valuation for those kinds of properties.

The council rejected a proposal by the mayor to transfer $500,000 from the city’s free cash to lessen the tax burden.

The mayor said a tax classification rate of 1.65 is fair and reasonable, while the city keeps an adequate amount of money in reserve.

“We have to balance out needs as a city with the needs of its citizens,” he said. “We can’t starve the city, but we have to take the pain that our citizens are going through into account.”

Following Tuesday night’s tax hearing, the mayor said the tax increase is less than what it has been in prior years and half of what it was last year, but is still higher than he wanted. He said he was disappointed the council did not agree to use a relatively small portion of the city’s reserve money — $500,000 — to reduce the tax burden.

“I proposed taking $500,000 from reserves, which is only 4% of our reserves, and use that to keep the tax increase as low as possible,” he said.

Voting in favor of using money in reserves to reduce the tax burden were councilors Daly O’Brien, Bevilacqua, Thomas Sullivan and William Macek. Voting against were Barrett, Michitson, LePage, Jordan and McGonagle.

Fiorentini said the money being held in free cash and stabilization is sometimes called a rainy day fund.

“For many or our residents, it is raining right now. In fact, for many of our residents, it is pouring,” he said. “While I do agree with the council majority that we need to save our money and invest long term in our infrastructure and our schools, in the middle of a pandemic our residents and our businesses need help right now.”

In addition to setting the new tax rates, the council approved a request by LePage to offer military veterans an additional property tax reduction of up to $1,500 in exchange for volunteer work — a program effective July 1 of next year. LePage said this exemption is allowed by state law.

The council also approved several recommendations by the mayor to help people who are struggling financially.

Those recommendations included increasing the personal property exemption for small businesses to $7,000 from the current $5,000, which the mayor said will help 90 of the city’s smallest businesses in addition to 1,000 that receive help already. It will cut between $123 and $172 off the annual bill for eligible businesses, he said.

Other recommendations made by the mayor and approved by the council include: helping restaurants by waiving outdoor dining fees for the coming year; waiving application fees for liquor license renewals and reducing liquor license fees; increasing a tax exemption by 20 percent for certain groups of taxpayers, including those 70 and older with limited incomes, widows and widowers with financial limitations, disabled veterans, former prisoners of war and the blind; and providing a full tax break for parents of military veterans who died in the line of duty.

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