Average Home Tax Bill Likely to Increase $130-$150 Next Year

The average Melrose homeowner's tax bill next year will likely increase between $130 and $150, according to assessments and tax levy information presented to the Melrose  at a public hearing last night.

After the initial presentation by Melrose City Assessor Don Dragt, who was accompanied Board of Assessors members Cathy Gulino and Lee Phalen, the aldermen sent the matter of effectively setting the tax rate to the Appropriations Committee, where it will be discussed and voted on before coming back to the full board for a final vote.

The aldermen, under state law, have the option of using a split tax rate and taxing commercial, industrial and personal property at a higher rate than residential property, an option that city has usually taken.

Slightly more than 94 percent of Melrose's taxable property in 2011 is residential, according to the state Department of Revenue's Division of Local Services. The state uses a formula that takes into account factors such as the percentage of commercial and residential property in the city. That formula then limits how much more than city can tax commercial properties than residential properties.

This year, as generally the case in previous years, the aldermen can choose to tax commercial properties up to 50 percent more than residential properties.

The aldermen do this by selecting a "residential factor." Last year, the aldermen selected a residential factor that resulted in a "shift" of 1.48, meaning that commercial properties were taxed 48 percent more than residential properties.

, Dragt noted, because it provided the most equitable average increase in terms of percentages for both residential properties and commercial properties—4 percent and 4.2 percent, respectively.

This year, the 1.48 shift again provides the most equitable increase, Dragt told the aldermen—an average 2.78 percent increase for residential, and an average 2.91 percent increase for commercial.

If the aldermen chose to tax residential and commercial properties at the same rate, Dragt said, the tax rate would be $13.16.

Under the 1.48 shift, the residential tax rate would be $12.76 per $1,000 of value, an average increase of $137.99 and average residential tax bill of $5,093,38. The commercial rate would be $19.48 per $1,000 of value, an average increase of $262.58.

Smaller Increase Than in Recent Past; Exemptions Available

"I’m happy to say on the one hand that this figure, the $137.99 increase year-over-year, is the smallest we’ve had in many years," Dragt said (see historical average tax increases below). "It doesn’t always work out that way—you’ve heard me here before when residential changes have been in the high threes and low fours (percentage-wise)."

However, Dragt acknowledged that any increase is still an increase in what continue to be tough times for citizens.

"Even though this increase is not as large as it has been in the past, any increase for people on fixed incomes is very difficult," he said. "We all realize that. Nobody likes to see any increase. I think the mayor has done a good job, and also Patrick Dello Russo, the CFO, in keeping costs down as much as possible and to a certain extent you see that reflected here."

In acknowledging that Melrosians on fixed incomes could still be struggling with tax bills, Dragt urged them to contact the Assessor's Office regarding the various exemptions available for the elderly, veterans and widowers, among others, and the program that allows residents over 65 with limited income to defer part or all of their taxes until it reaches 50 percent of their assessment.

"That’s quite high—people can take this (deferment) for many, many years," he said, adding that it does result in a lein on the home, but that lein is paid off when the house is sold to a new owner.

Melrose Average Single Family Tax Bills, 1992-2011

This information is taken from the state Department of Revenue's Division of Local Services. The High-Low Rank in the last column is based on 339 cities and towns for 1992-1993; 340 cities and towns for 1994-2005; 338 in 2006; 339 in 2007; 336 in 2008; 337 2009 and 2010; and 338 in 2011.