, Salem, MA

December 12, 2012

Peabody taxes will rise $95 for average homeowner in 2013

By Alan Burke
Staff writer

---- — PEABODY — The value of your house may have dropped. Your investments may have faltered. And your paycheck might be shriveled.

But all the same, if you live here, your property taxes are going up in 2013 by an average of $95.

Here’s the good news, however. Only two other Essex County communities, Salisbury and Methuen, are leveling a smaller increase than Peabody.

“We’re still in tough financial times,” Mayor Ted Bettencourt told the City Council last night. He cited, for example, the uncertainties created by Gov. Deval Patrick’s announcement of a possible midyear reduction in state aid required by flagging revenues.

Additionally, the mayor continued, a hope for savings reaped by the agreement to put city worker health care into a statewide system can’t be expected until next year.

Bettencourt stressed his efforts to relieve some of the burden on the local businesses that have helped keep Peabody’s tax rate one of the lowest in the region for decades.

“The business taxes in the city of Peabody,” Councilor Dave Gamache said, “afford us the opportunity to have the third-lowest taxes in the county. ... We’re so lucky to have an industrial park and the mall.”

Out of the $146.7 million required to run the city in the coming year (a 1.8 percent increase), 54 percent is slated to come from the city’s commercial properties, the bulk of that from the Northshore Mall. Homeowners will pay 46 percent.

Councilors expressed misgivings about the amounts required from businesses, and they several times proclaimed the city’s need to seem and to be business-friendly.

Fred Martini of the Board of Assessors downplayed the role that low taxes play in attracting business, however. Instead, Finance Director Patty Schaffer touted other factors. The presence of several major highways, for example, gives Peabody an extraordinary advantage in attracting profit-making organizations, she said.

Member Anne Manning-Martin wasn’t buying it.

“Of course (businesses) look at the tax rate,” she said. Otherwise, “everyone would be taxing businesses to the hilt.” She lamented that the city will “tax businesses because they can. That’s what I’m hearing.”

Further, Manning-Martin worried about residents asked to pay a lot more than a $95 increase, sometimes four times as much. “I don’t think anyone’s going to be happy — frankly — with what we’re doing tonight.” She wondered why more money wasn’t taken from the city’s cash reserves in order to ease the impact.

Bettencourt replied, “You can’t have it both ways.” He called for balance between what’s taken from businesses and residents. He also reminded the council that a healthy cash reserve will make it easier and cheaper to arrange loans for looming projects like the new Higgins Middle School.

Only one private citizen spoke, former mayoral candidate Russ Donovan, who was impatient with the council’s concern over business taxes. He noted that residents and the Northshore Mall will bear almost all of the increased spending.

“Small business will be getting a tax cut,” he said.

He decried the impact of the increases on those living on fixed incomes. “How do you tell a retired homeowner it’s only $100, you can afford it? ... As President Obama says, the rich can afford to pay more.”

Meanwhile, the value of the average Peabody home increased by $4,100 to $289,900 over the past year. Schaffer noted that values seemed to have “stabilized.” But that amount is still a far cry from the 2008 high point of $340,200 for the average home.

The council passed a motion to set the recommended residential rate of $11.98 on a 9-2 vote, with only Manning-Martin and member Rico Mello in opposition.