Property Taxes and the Budget

– Allison Goldsberry

While Medford awaits word on $800,000 from the state needed to balance FY 2008’s  $130 million budget- that’s roughly $86 million for municipal services and $44 million for the schools- here’s a look at the role our property taxes play in the city’s budget.

How much of the budget is borne of residential property taxes?  According to City Assessor Ed O’Neil, residential property taxes make up 80% of the taxes collected by the city but account for about 41% of the total municipal budget.  The rest of the money comes from commercial property taxes and a variety of recurring and non-recurring revenue sources, such as fees, fines, and grants, among others.

According to data pulled together by public policy think tank MassINC, Medford ranks 247 out of 351 communities in the state for the residential property tax share of the city’s budget.  That compares with 22% for Boston, 62% for Arlington, and 29% for Malden.

As of FY 2007 Medford had 18,000 taxable real estate parcels totalling $7,328,329,020 in valuations.  The average single family home is valued at $407,500 while the average commercial property is valued at just over $1 million.  Like most of its fellow cities in Massachusetts, Medford taxes its commercial property at a higher rate, though commercial taxes represent only about 20% of the total tax burden.

Though the property tax rate was lower for 2007 than 2006 ($8.89 vs. $9.11), property taxes increased because of higher valuations.

Check out the City Assessor’s website for more information.