The Ways & Means Committee votes for a single tax rate for FY21.

About half of last night’s meeting of the Ways & Means Committee of the City Council was devoted to discussion of the the city’s tax classification for the coming year.

Every year, the City Council needs to vote on what the property tax rate for the city will be—as well as how it will be apportioned across all the various property owners in town—so the work of preparing tax bills to be sent out can begin. There are a lot of state regulations and requirements that bracket these conversations, including the caps on how high taxes can be raised. These conversations also take place against the background of an ongoing (and often contentious) conversation around the town about whether Greenfield’s tax rate and the amount of property taxes Greenfield residents are required to pay is too large, too small, or just right.1

Over the last few years, there has been no small amount of time and energy devoted to the idea of splitting our property tax rate. Currently, all property owners in Greenfield—both residential and commercial/industrial—pay the same property tax rate. In some other municipalities, there are separate tax rates for these groups, the idea being that if you increase the tax rate that businesses pay on their property, then you can reduce the tax rate (and therefore the tax bills) for individual residential property owners.

Sounds great, right? The trade-off, however, is that putting a bigger tax burden on business property owners brings a risk of alienating/scaring off some of them, a risk that needs to be balanced against the benefit of a lower property tax rate for homeowners.2

The members of the Ways & Means Committee expressed concern that, given the relatively small size of Greenfield’s business community—only about 24% of Greenfield properties are commercial/industrial, with the vast majority being residential—and the generally fragile state of our current economy, the town is not in a great bargaining position when it comes to raising taxes on business owners. If any of them choose to leave, it’s a big hit. Greenfield Assistant Assessor Kimberly Mew, answering most of the Councilors’ questions at this meeting, also noted that a sizable number of the commercial properties in town are currently vacant and not generating income.

Another concern voiced both by members of the Committee (and by Mew) was that if Greenfield were to move to a split tax rate in the future, that process should start in a specially formed committee. It would then need to undergo a months-long review process. As Committee Chair Otis Wheeler (Precinct 7) put it, such a process “should have started back in the summer.”

The Committee ended up voting unanimously in favor of a single tax rate, with no residential or small business exemptions. The proposal now goes to the full City Council for a vote at their regular monthly meeting tonight.

Prior to the Committee’s vote on the tax classification, there was a lengthy discussion between the Councilors and Assistant Assessor Mew regarding a topic which has come up in other forums: whether Greenfield is properly assessing properties in town, and to what extent the town could mitigate some of the tax burden on homeowners by a more aggressive approach to property assessments. Councilors Elmer (At Large) and DeSorgher (P3) in particular pressed Mew on this topic, asking how much money Greenfield is leaving on the table, and what budgetary resources the City Council could provide that might assist in recovering that money. Mew’s answer was that the state requires Greenfield to assess one quarter of properties every year, and they are meeting that requirement, although she did allow that an additional full-time person in the Assessor’s Office wouldn’t hurt. She added that while there may have been some historical issues, the Assessor’s Office has made and continues to make good progress, and has “a pretty good grasp” on commercial/industrial properties.

Chair Wheeler and Liz Gilman (the city’s Finance Director) also weighed in here. Gilman noted that increasing the assessed value of properties can help reduce the tax rate, but it would not lower tax bills; she also advised the Committee that they “shouldn’t get lost in the idea that we’re leaving a lot of money on the table.” Wheeler agreed with Gilman, saying that taxation issues in Greenfield are less about assessment and more about incomes and actual property conditions.

There was another interesting sidebar during the assessments conversation regarding the third-party vendors that the city uses for assessments. Based on Mew’s description:

  • Patriot Properties provides the software platform that the Assessor’s Office uses to store and manage its data.
  • RRG provides the people to conduct the on-the-ground assessments of individual properties.

Councilor Forgey (At Large) had a number of questions for Mew about the services these companies provide, how much they cost, and whether those services should be fully owned by the city rather than being contracted out to vendors. Due to the cost and overhead of deploying and managing software, it sounds like moving away from Patriot Properties’ software platform is a non-starter. Mew also spoke highly of the work done by RRG in conducting assessments, and noted that were Greenfield to move those jobs to municipal staff, the city would then be on the hook for legal and other costs related to conducting assessments.

If you are interested in reading the full record of the Board of Assessors’ hearing on the FY21 tax classification, scroll down to page 8 of this document.

The other major item on the agenda for this meeting was a series of cuts proposed by the Mayor to various current-year operating budgets. This post is already long, though, so I hope to cover those items in a separate post.

  1. The public discussion tends to lean toward “too high,” but I’m not prepared to wade into that battle at the moment…
  2. At the risk of stating the obvious, there is a lot of ideological and partisan wrangling around this question. While I have my own opinions, I am trying to keep them out of this post and just sketch out the general landscape.