Published in the November 22, 2017 edition


NORTH READING — In fiscal year 2018, the town’s new property tax rate has increased slightly, to $16.34 per thousand of valuation. The Board of Selectmen voted unanimously Monday night to both establish this new tax rate and to keep the single tax rate in place for all classes of property – residential, commercial and industrial.

The only two years during which the Selectmen set a split tax rate between property classes were 1985 and 1988. Splitting the tax rate does not generate new revenue, it only reallocates the levy burden, explained Debbie Carbone, the town’s chief assessor.

The new tax rate is an increase of 21 cents per thousand of property valuation, or about one percent. It is considered an estimated tax rate until the state Department of Revenue certifies it.

This means for the owner of an average house in North Reading, assessed at the FY18 value of $493,241, the tax bill will total about $8,060 annually.

This increase in the tax rate follows two years of slight declines in the rate. The FY17 rate of $16.13 was a 28-cent per thousand decrease over the FY16 rate. However, the average value of a residential property in town for FY17 was $502,121 which created an average tax bill of about $8,100.

State-mandated process

The process of establishing a new tax rate each year is mandated by the state, as is the required property tax classification public hearing the board held on Monday night. During this process, in addition to maintaining the long-standing tradition of a single tax rate for all classes of property, the Selectmen voted against establishing a residential tax exemption of up to a maximum of 20 percent that would shift the tax burden within this classification from those with the lowest assessed values for their principal residence to the highest assessed properties that do not serve as the principal residence of those taxpayers. This is much more commonly done in communities where there are many vacation homes or rental properties, for example.

Similarly, the Selectmen chose not to adopt the small commercial exemption of up to 10 percent to shift the commercial class tax burden from “eligible parcels” to “ineligible parcels” as the town does not really have the eligible parcels required under the statute.

Per information compiled for the public hearing by Carbone, “eligible parcels” must have a valuation of less than $1M and must be owned by a business that employs fewer than 10 employees as certified by the state Dept. of Workforce Development–Division of Unemployment Assistance to the town’s Board of Assessors.

• The Selectmen also officially recommended that the town’s Board of Assessors set the FY18 tax rate at $16.34 per every thousand valuation.

• The Selectmen set the town’s property tax levy for FY18 at $49,006,144.19, slightly less than the maximum levy allowed under Proposition 2 1/2.

• The board did not vote to allow a discount of up to 25 percent of the open space share of taxes because Carbone informed the Selectmen that the Board of Assessors has determined that the town does not have any classified open space land.

Under this provision open space is very narrowly defined as “land that is maintained in an open or natural condition which contributes significantly to the benefit and enjoyment of the public and which is not: subject to a permanent conservation restriction; held for production of income; or taxable under the provisions of Chap. 61 (forest land), Chap. 61A (farm land) or Chap. 61B (recreation land).”

By the numbers

Additional statistical information provided by Carbone about the town’s property values and classification include the following:

• North Reading has a total of 5,336 residential parcels.

• These residential property classes break down as follows: single family homes (4,266); residential condominiums (755); multi-family homes – up to 5+ units (72); mixed use properties (22); vacant residential land (221).

• Percentage of residential land: 87.76

• Percentage of commercial, industrial and personal property known as CIP: 12.24

The total tax levy in town from FY15 to FY18 was as follows:

• FY15: $44,382,162

• FY16: $45,817,464

• FY17: $47,342,229

• FY18: $49,006,114

Carbone characterized the town’s tax levy statistics as “very healthy and growing.”