SalemNews.com, Salem, MA

November 21, 2012

Taxes on Danvers homes to rise 2.9%

BY ETHAN FORMAN
STAFF WRITER

---- — DANVERS — Despite Selectman Keith Lucy’s contention that it would be better to shift more of the tax burden onto commercial and industrial properties this year because their new growth outpaced that of residences, three selectmen decided during a classification hearing last night to leave well enough alone.

By a vote of 3-2, with Lucy and Selectman Dan Bennett dissenting, the board set the town’s tax factor at 1.26, the same number as last year, resulting in an estimated tax rate of $14.54 per $1,000 of assessed value for single-family homes, condominiums and residential properties, Chief Assessor Marlene Locke said.

Under classification, the tax factor serves to shift the tax burden onto commercial and industrial properties, so these taxpayers will see an estimated tax rate of $20.23 per $1,000 of assessed value.

Assessors met after selectmen did in Town Hall to set the tax rate, which then must be certified by the state Department of Revenue.

Owners of typical Danvers single-family homes valued at $344,800 will see their tax bills rise an estimated $141, and a tax bill of $5,017 this fiscal year. That works out to a nearly 2.9 percent increase. Typical single-family homes in town dropped in value by 1.5 percent from last year during a revaluation of all properties that assessors do every three years.

For the owners of the typical condominium, taxes will go up by less than 1 percent, or $19, with a tax bill of $3,084. The typical condo in town dropped in value by 3.6 percent from last year to $212,000.

Business owners with a typical commercial and industrial property of $1.267 million will see a tax hike of nearly 1.8 percent, with a total bill of $25,642. The typical commercial property fell in value by 2.5 percent.

During the classification hearing, selectmen decide how much of the tax burden should be borne by residential properties and how much should be shifted onto commercial, industrial and personal properties.

The board has a policy, which Lucy helped create, that attempts to keep the residential share of the tax levy at 66 percent and the business share at 34 percent. This year’s tax levy to be raised from property taxes is $62.5 million. If the burden were not shifted, the town would have a single tax rate of $16.06 and homes would represent 73 percent of the tax levy. Homeowners would also see much higher taxes.

In the past four years, commercial and industrial growth has outpaced residential growth, Lucy said. He favored a tax factor of 1.28, which would have meant a 2 percent tax increase for the typical home and a 3.4 percent increase for commercial and industrial properties.

Selectman Mike Powers said he understood Lucy’s logic, but said the town’s property values have remained consistent over the past several years. It’s also hard to compare home values to business values, because home values are based on sales, and commercial is based on income and expenses, he said. Bennett preferred a tax factor of 1.27 because it gave more equitable tax increases across the board. Trask suggested a 1.25 tax factor because it came the closest to the coveted one-third, two-thirds split of commercial to residential.

Resident and business owner Al Allain said the town should be wary about raising taxes too much on businesses because the electrical contractor is seeing less of them. While Danvers has done better than some other communities with its tax revenues, Allain said: “We have to start planning on less and less business and how are we going to pay for the price of government in this town.”

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.