Board Rejects Tax Classification, Sets Tax Rate

On Monday night, the voted, unanimously, to act upon the recommendation of the finance department and town administrator, and maintain the single tax rate for FY2012. Set at $15.49, it will increase 58 cents from FY2011.

Since 1979, Northborough has rejected converting to a split tax rate, which would approve tax classification. Tax classification, which surrounding towns such as Marlborough have adopted, artificially shifts the tax burden, lowering residential rates and raising the rate on commercial and industrial properties.

"It allows the board to shift the tax burden from residential properties to other properties," said Town Administrator John Coderre. "It doesn't add any tax dollars [to the town]. All it does is shift the burden from one class to another."

The rate increase will impact the taxpayer $143 more than last year. The average residential tax bill for FY2012 will be $6,114, up from $5,971. Of the $143 increase, Coderre said, $58 of that is absorbed by the which has a debt exclusion.

"Never artificially intefere with the natural market and shift the burden from one class to another," said Coderre. "Our longterm stability and growth has its roots in the fact that businesses don't see artificial surcharges in doing business in Northborough. The rationale for why you have a split rate is a political decision. You see it more in the larger cities. We tell people right up front that we've never had classification here. When you set up shop here, we look at it as a long-term partnership. And once you institute classification, it's extremely difficult to get away from. It makes economic development more difficult."

To his point, Coderre added that town officials recently met with a prospective business, which was weighing options, also, with a neighboring town that operates with a split tax rate. "We ran the numbers," he said, "and showed them that they [the business] would pay $266,000 more annually just because of classification." He added that while the classification may reduce taxes for residences, the reduction is minimal, while shifting a more disproportionate burden on commercial businesses.

Total valuation from FY2011 is up $50.6 million in FY2012, at 2.4 billion. New growth in FY2012 is certified at 81.4 million.

"We are seeing growth in this town that bucks trends," said Coderre. "Despite interim year's adjustments, the town benefited from significant economic development. Overall, our valuation is up more than 50 million, and that's a huge positive for us."

Growth areas in residential escalated to $27.9 million, a $10 million of that chunk contributed to the last piece of the building of Avalon Bay Condominiums. Up 43.6 million in commercial growth, 42 million of that growth is attributed to Northborough Crossing.

"Commercial, industrial and personal property is going up, and residential is going down," said Coderre. "The town continues to experience strong economic development. By being conservative and the strong new growth has resulted in minimizing the tax impact to the average homeowner."