In the above article the Salem News looks at how the current financial crisis is playing out in municipal funding = Property Taxes. The majority of people they have talked to seem to be unaware of how local property taxes are assessed and how the final figures are decided upon.
The answer is quite simple, despite the spin that anti-tax messiah Barbara Anderson puts on it. But before I explain it... here is a peek at what we here in Peabody face... especially compared to our fellow North Shore communities. Note: We have both the lowest taxes and the lowest increase of anyone!
Taxes on the North Shore
[taken from the article]
Community...Average....Increase
Beverly....$4,852.43....$101.21
Boxford....$7,611.60....$188.32
Danvers....$4,390.96....$160.24
Hamilton...$7,856.24....$640.37
Ipswich....$5,178.17....$523.48
Manchester.$8,754.02....$849.14
Marblehead.$6,275.02....$170.14
Middleton..$5,633.18....$275.84
Peabody....$3,123.87....$ 73.76
Salem......$4,193.68....$139.22
Swampscott.$7,534.49....$241.94
Topsfield..$7,206.40....$198.40
Wenham.....$8,892.44....$632.25
Basically... the City looks at how much money it needs to operate and decides on a number = the total budget. Some of this money comes from fixed sources (the State, excise taxes, etc.) The remainder is what needs to be paid for out of local property taxes. Let's call this amount the Property Tax Budget (or PTB.)Then the City looks at the total value of ALL property in the City (based on the most current valuations.)
(I will look at the situation where there is a single tax rate for both business and residential because it is easier to explain, but the method is similar - you just have two variables to deal with instead of one.)
Then you take the PTB and divide it by the total valuations and come up with a percentage...
Say the City needs $8 million in property tax revenue, and all the property in the City is appraised at $500 million...
Property Tax Total............................ $8,000,000 = 0.016 %
Total Valuations (all property).........$500,000,000
This is the TAX RATE. This is the rate you will multiply your property's appraised value by to get your total tax bill.
So if your house (in this example) is worth $375,000 your bill would be...
$375,000 x 0.016 = $6,000
Now it is a bit more complicated when you have two different sets of properties (residential and business) and you will need to do a few IF-THEN calculations until you find a formula that meets your needs.
This was also in the Salem News today: Property values drop $1.3 billion on North Shore
Here is the listing of total property valuations (and the drop in value) for the last year.
Housing values
............Value..........Changes
Beverly.....$5.02B.....-$107M (-2.1%)
Boxford.....$1.764B....-$ 76M (-4.1%)
Danvers.....$3.205B....-$ 96M (-2.9%)
Hamilton....$1.364B....-$ 45M (-3.2%)
Ipswich.....$2.358B....-$ 62M (-2.5%)
Manchester..$2.06B.....+$ 29M (+1.4%)
Marblehead..$5.088B....-$262M (-4.9%)
Middleton...$1.372B....-$ 94M (-6.4%)
Peabody.....$5.352B....-$231M (-4.1%)
Salem.......$3.754B....-$255M (-6.4%)
Swampscott..$2.362B....-$ 45M (-1.9%)
Topsfield...$1.151B....-$ 46M (-3.8%)
Wenham......$0.819B....+$ 18M (+2.3%)
Area......$35.669B...-$1.271B (-3.4%)
4 comments:
OG says...
total we learned that retail sales were lower than expected last month--NO SURPRISE and now you share this comparative tax table with us and Peabody comes out smelling like a rose--NO SURPRISE....so the question is this >> why aren't we all happy with our local situation ???? especially when you see a stack ranking like this which paints a rosier picture for Peabody residents than anyone else around us!!!!!! why are so many of these Patriot readers and commentators so unhappy with the current regime?? does it make logical sense ???
Well I think you know OG that I am actually NOT happy with this situation. I would rather see us inch up the rankings and start to (dare I say it) tax and spend on the priorities that have been lacking in Peabody for a long time... specifically on the education of our children.
However, I am not immune to the political (and financial) realities of this crisis and am actually glad that we are in such a good position compared to our neighbors.
PI and OG,
I can agree with you both that, YES, we have the lowest taxes around. However, that is all we have going for us. That's it, nothing else, zero, zip, nada!
As I've stated before you could live in Middleton or Danvers and spend more in taxes but send your kids to great schools for no additonal fee. Or live in Peabody, enjoy the low taxes, but spend 10g a year sending your kids to the Prep or Fenwick.
Sure these low taxes benefit the elderly and families that have no children in the school system, but is that the road we are chosing to go? Are we becoming a retirement community?
OG says..
yes, that is the road we have chosen to go down for quite some time now PI--this is not a new discovery my friend!! It has been going on for about 30 years now anyways!!! take a look at the Higgins Middle School as a shining symbol on the hill at the end of that road. The kids can't even see out of the crappy windows why would they leave there enlightened ?
Post a Comment