Town Council - Ways & Means Committee

Braintree Town Council MEMBERS Joseph Reynolds, Chairman Committee of Ways & Means Julia Flaherty, Vice-Chairwoman One JFK Memorial Drive Elizabeth Maglio, Member Braintree, Massachusetts 02184 MINUTES Tuesday, November 28, 2023 A meeting of the Committee of Ways & Means was held in Johnson Chambers on Tuesday, November 28, 2023 at 6:00pm. Councilor Reynolds was in the Chair. Clerk of the Council, Susan Cimino conducted the roll call. Present: Joseph Reynolds, Chairman Julia Flaherty, Vice-Chairwoman Elizabeth Maglio, Member Also Present: Margaret Laforest, Chief of Staff Edward J. Spellman, Jr., Director of Municipal Finance Paul Sullivan, Deputy Assessor Robert Cusack, Chairman Board of Assessors Susan O’Brien, Board of Assessors Robert Connelly, Board of Assessors Approval of Minutes • None Old Business • None November 28, 2023 Ways & Means Committee 1 of 5 New Business • 23 077 Mayor: Tax Rate Classification or take up any action relative thereto Chairman Reynolds asked if anyone would like to speak on Order 23 077. Edward J. Spellman, Jr., Director of Municipal Finance stated we are here tonight to present the tax rate classification motions. These votes are needed so we can submit the tax sheet to the DOR. The Tax Classification "Shift" Each municipality has the option of "shifting" an excess portion of the tax burden onto the commercial properties in town to alleviate some of the residential burden pursuant to M.G.L. Chapter 40, Section 56. The majority of municipalities in Massachusetts have a single unified tax rate for both residential and commercial properties. Braintree first adopted a shift in 1986. The spread sheet provided shows the total value of property sorted by classification (residential, commercial industrial and personal) and the number of parcels in each class. A mean average value is derived by dividing the total value of each class by the number of parcels in each class. The chart also shows the impact of the 175% shift the Town has adopted on the tax bills of property owners. Adoption of the shift will result in an estimated tax rate of $9.50 per thousand dollars of residential value which is .26 less than the prior Fiscal Year of 2023. It is important to note that values are set annually based on market conditions as of January 1st using the prior calendar year's data (2022). As a result, these values are set based on sales and market data during the course of the pandemic and resulting economic conditions. For FY24, the mean average residential property value (derived by taking the total value of all residential property and dividing by the number of residential parcels) is $647,573.19 (up from $593,028.06 last year). By adopting a 175% shift, the average residential parcel valued at $647,573.19 would pay a bill of$6,151.95. Without the shift, the same property would pay a bill of$ 7,479.47 As a result, adopting the 175% shift reduces the average FY24 residential tax bill by over $110.63 per month, or $1,327.52 in total. Compared to last year's average residential tax bill ($5,787.95), the projected annual adjustment for FY24 is $363.99. The Board of Assessors has recommended that the Town maintain the current residential shift and I support their recommendation. Mindful of the economic times in our state, it remains prudent to continue to provide a measure of property tax relief through tax classification when possible. November 28, 2023 Ways & Means Committee 2 of 5 Residential and Commercial Values There has been an overall market increase of9.20% for residential values this year in comparison with FY23. As noted above, the mean average residential value has increased from $593,028.06 to $647,573.19. This includes all types of residential property with the average single-family home increasing in value from $613,913.32 to 668,178.05. We saw value increases in the commercial property class of 0.71%. However, the industrial property class increased by 5.45%, even more than the commercial class. Overall, the commercial and industrial classes increased by 1.49%. The projected commercial and industrial tax rate is expected to go down from $21.18 per thousand to $20.27 per thousand. The residential value increase (9.20%) being higher than the commercial and industrial increase (1.49%) results in an increase in the levy share to the residential class from 64.49% to 66.48%. Small Business Exemption The Board of Assessors requests that you renew the adoption of the small business exemption. This exemption reduces the property tax burden for commercial properties employing fewer than ten people and whose assessed value is less than $1 million. Small businesses play an important role in our community and our economy as a whole and the exemption remains an essential part of their continued operations. Open Space Discount Municipalities are allowed to discount the value of properties classified as open space by twenty five percent (25%) of their value. The Town of Braintree has no property that falls under the open space classification, so the question of whether or not to adopt a discount is moot. However, as a formality it is requested that the Town Council formally vote to decline to adopt an open space discount. Residential Exemption The Town may adopt a residential exemption for all residential properties that are the principal residence of the taxpayer. The exempted value may not exceed twenty percent (20%) of the average assessed value of all residential properties. Adopting the residential exemption increases the residential tax rate. The amount of the tax levy paid on residential properties remains the same, but because of the exempted valuation, it is distributed over less assessed value. This would result in a reduction in the taxes paid by residents in low and moderate value homes and increase bills for owners of high value homes, rental properties or vacation homes. The Assessors recommend not adopting this exemption. The residential exemption requires careful study prior to implementation. The impact of the increased residential rate, the appropriate percentage of value to be exempted and amount of relief it would actually provide to the average resident need to be clearly identified. The majority of communities that have adopted this exemption have high value vacation or rental properties that bear the additional tax burden. Such properties are not found in Braintree. November 28, 2023 Ways & Means Committee 3 of 5 Chairman Reynolds asked if anyone had any questions on Order 23 077. Chairman Cusack stated a resident asked him if our taxes are too low. We have it really good here. Chairman Cusack stated Commercial are mainly comprised of offices and they are about 75% vacant due to COVID. Industrial is doing very well. Amazon is also taking a big bite out of local shops. Paul Sullivan stated the offices are trying to retro fit areas in buildings to accommodate multiple tenants instead of just one. Chairman Reynolds asked if there is a Motion for Order 23 077. Motion read by Councilor Flaherty for favorable recommendation to the full Council. 1. To apply the tax rate classification shift. MOTION: Be it ordained that the Town of Braintree, through the Braintree Town Council, adopt the recommendation of the Mayor and the Board of Assessors to approve the Classification Tax Rate Shift of 175% to be applied to commercial, industrial and personal property. Motion: by Councilor Flaherty to approve Order 23 077(1) Second: by Councilor Maglio Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) 2. Re: The small business exemption. MOTION: To approve the "Small Business Exemption" as recommended by the Mayor and the Board of Assessors in a memorandum to the Town Council dated November 22, 2023, and as filed with the Office of the Town Clerk. Motion: by Councilor Flaherty to approve Order 23 077(2) Second: by Councilor Maglio Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) 3. Re: The open space discount. MOTION: To continue to adopt the recommendation of the Mayor and the Board of Assessors, as outlined in a memorandum to the Town Council dated November 22, 2023, and as filed with the Office of the Town Clerk to decline the "Open Space" discount. Motion: by Councilor Flaherty to approve Order 23 077(3) Second: by Councilor Maglio Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) November 28, 2023 Ways & Means Committee 4 of 5 4. Re: The residential exemption. MOTION: To continue to adopt the recommendation of the Mayor and the Board of Assessors, as outlined in a memorandum dated November 22, 2023, and as filed with the Office of the Town Clerk to decline the adoption of the "Residential Exemption." Motion: by Councilor Flaherty to approve Order 23 077(4) Second: by Councilor Maglio Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) It was unanimously voted to adjourn the meeting at 6:54p.m. Respectfully submitted, Susan M. Cimino Clerk of the Council Documents provided for Meeting • 23 077 Mayor: Tax Rate Classification or take up any action relative thereto November 28, 2023 Ways & Means Committee 5 of 5