Friday, April 28, 2000
How the tax rate is calculated and what it might be
According to the Town Warrant, the finance committee estimates that, for the fiscal year 2001, "the balanced (no-override) budget will result in a projected four- to five-percent tax rate increase, from $17.80 to an estimated $18.50 per $1,000 of real estate valuation. If voters approve the Proposition 2-1/2 operating and debt override questions, the tax rate would rise approximately six to seven percent or an estimated $18.90 per $1,000 of valuation." However, these are only estimates and, due to a number of factors, it is difficult to provide exact figures, they argue.
Since the tax rate is calculated in the fall by the board of assessors using figures that are not available until at least October, the rate is always different, and usually lower, than what can be predicted in the spring. By the fall, assessors have more figures to use as a basis for predicting non-tax revenues, such as state aid and local receipts, that reduce how much has to be collected from property owners to pay the town's bills. Borrowing costs for the town's capital projects can also differ from what is predicted in the spring. The tax rate can also be lower than expected if "new growth," the added property value from new construction, additions and improvements, is more than FinCom has estimated. This number is not available until the fall.
Finally, tax rate predictions are even more likely to be wrong for next year because the assessors are currently in the process of re-valuing every property in Carlisle, as part of a three-year cycle mandated by the state Department of Revenue to ensure that property values mirror market activity.
Thus, when the actual tax rate is calculated in October, it will be based on different, and mostly higher, property values for all property in Carlisle. Next year, everyone can expect a substantially lower tax rate, but their tax bills may change dramatically based on how much the value of their home, land and other property increase relative to others in town.
Impact for next year
Nonetheless, for purposes of comparison, with the current level of spending, property taxes collected with no overrides would rise by $700,459, raising the tax rate by just under 4 percent to $18.50 per $1,000 of assessed value, or about $273 for a home assessed at $392,000. (According to administrative assessor Rena Swezey, the average value of a single-family home in Carlisle for FY2000 was $391,719.) If all overrides pass, spending would rise by $962,946, raising the tax rate by about 6.4 percent to $18.94 per $1,000, or about $444 for a home assessed at $392,000.
Such modest increases (as compared with the over 14 percent jump this year) come partly as a result of fortuitous news from the statethe first year of payments from the School Building Assistance Bureau (SBAB) for construction costs on the Link Building will come just as debt payments, estimated at $508,000 for other large capital items (Wang-Coombs, the library expansion) begin. The state has also notified town officials to expect an increase of over $250,000 next year in various categories of aid for operating expenses.
Tax increase could be less
There is some chance that the calculated tax rate increases could be even lower. For instance, each $1 million more than the predicted $13 million in new growth will reduce the tax rate by almost 3 cents, to 18.91 or a 6.2 percent rise if all overrides pass. Similarly, for every $100,000 increase over last year in state aid or local receipts, next year's tax rate could be reduced by about $.15 or about .8 percent. Combined, a $100,000 bonus from the state or local receipts plus $5 million more than expected in new growth could mean a tax rate increase less than 5 percent, including all overrides.
© 2000 The Carlisle Mosquito