Council Delays Setting Property Tax Rates
– Allison Goldsberry
After a heated debate, the Medford City Council delayed setting the property tax rate after City Councilor Breanna Lungo-Koehn tabled the issue.
Every year the Council has the thankless task of voting on property tax rates for residential and commercial property owners. Setting the rate is a difficult decision as taxes generally increase each year to pay for city services. The rate is determined by the need to fund the city’s budget, which is approved in June, and is affected by property values. It’s conceivable for property values to decrease yet have taxes increase due to a higher rate needed to fund the city’s budget.
Despite approving the city’s $133,285,781 in June, the Council struggled with approving the minimum tax rate recommended by the city assessors, $12.03 for residential properties and $23.72 for commercial properties. City Councilor Lungo-Koehn tabled the issue because she wanted more information from the assessors. Lungo-Koehn wanted to see how the numbers would play out if the residential rate was $11.90, which Lungo-Koehn said was the estimated rate when the Council reviewed the budget in June.
According to City Auditor Anne Baker, the city’s budget would have to be cut by at least $700,000 if a residential rate of $11.90 is approved.
The motion to table the issue wasn’t debatable, and several councilors were concerned delaying setting the rate could result in cash flow problems for the city.
“I’m not interested in shutting the city down by laying this on the table for one week,” said City Councilor Mark Arena.
City Council President Robert Maiocco said the “bottom line” was to vote on a property tax rate based upon the budget that was approved in June.
“I didn’t hear anyone move to reduce the budget…this is what we’re voting on, to fund the budget,” said Councilor Maiocco.
Chief Assessor Ed O’Neil did say delaying setting the property tax rate could potentially lead to the city needing to borrow money to meet its obligations, but it was unclear how long a delay would cause that situation.
Several residents spoke before the Council to urge some relief in property tax rates. In a tough economy, it’s difficult to ask residents to pay more, especially when property values have decreased slightly. However, there is the reality that the budget needs to be funded, whether the burden is shifted more on commercial property owners or home owners.
According to data collected by O’Neil and Baker, Medford has one of the lowest property tax rates of about two dozen surrounding communities.
Every year O’Neil generally recommends the lowest residential tax rate possible and the Council usually adopts that rate.
Despite selecting the lowest residential tax rate possible, property taxes tend to go up each year- historically, the average home owner’s property tax increases about $150 per year.
Last year’s rate was set at $11.61 for residential property and $22.98 for commercial, industrial, and personal property.
Medford is one of several communities in the state, mostly larger, urban communities, that have a different property tax rate for residential and commercial properties.
The Council will discuss property tax rates at its December 20 meeting.