Editorial: A shift in Tisbury, in response to the times

Tisbury selectmen have abandoned their longstanding property tax policy, which shifted a significant share of the tax burden from residential property owners to business property owners. Residential property yields nearly 90 percent of real estate tax revenue, commercial property the rest. Over the years the town has misguidedly tried to extract a disproportionate share of revenue from the small business segment. This year, acknowledging that economic conditions here have stung business interests and that the town’s tax rate policy, unique among the Island towns, has placed a hobbling burden on business property — in one case to the tune of more than a quarter million dollars for property taxes, other taxes, licensing and betterment fees — the selectmen changed course.

It was a wise decision, reflecting the economic circumstances in which the Island finds itself and the town’s need for reasonableness in all its policies.

Unlike other Island towns, Tisbury’s approach to sharing the burden of municipal expenditures has for years included shifting an extra bit of the municipal spending burden from year-round, property-owning residents to the already disproportionately burdened, undemanding, non-voting, non-resident seasonal property owning class. The underlying arguments in favor of this shift have been a) that summer residents can afford it; and b) that they don’t vote and the year-round beneficiaries of the policy do. Neither of these justifications gets much public air time from their supporters. Both are callous and basely political, but absent a vigorous public debate by voters – and why would the voters, year-rounders, mostly property owners, and the benficiaries of the policy yearn for such a debate?

Why would they? The non-resident owner of a $700,000 house will pay $5,607 in taxes, $203 more than he would have paid had the commercial tax shift been retained. The year-round resident owner of the same value house will pay $4,351 in taxes, $158 more than he would have paid if the commercial shift had not been scrapped.

Even in its less extreme dimensions, it’s a shortsighted political business, driven at least in part by a fundamental misunderstanding of how municipal taxing and spending works, as well as a political willingness to take advantage of the voiceless and play to the voters. Obviously, seasonal property owners cannot vote, not in town elections and not at town meeting. These part-time Tisbury residents, although they demand less of the town than many year-round residents do, can have very little influence over the decision makers, who do not regard them as constituents at all, or at least not in the narrow sense of the word. A very unfortunate ancillary effect of this practice is that the year-round residents, also the town voters, are encouraged to think that they have less reason to restrain spending at town meeting. Their tax bills, they figure, will rise only slowly, and the bigger burden will be on others. It’s an incentive to increase spending, rather than be cautious about it.

Real estate values have not risen in Tisbury over the last few years, nor have they elsewhere on the Island, but they are still high compared with many real estate markets in the nation. Islanders have been comforted in this real estate collapse by the attraction of the Vineyard to buyers in search of summer places. Plus, large lot zoning, stiff development regulation, and the expansion of acreage protected from development have all limited the decline in real estate values.

But high real estate values do not by themselves hike real estate tax bills or make it impossible for long-time Islanders to hold onto their houses. Town voters and their leaders, by their management efficiency (or lack of it) and spending decisions at town meeting, propel real estate tax bills. Seasonal property owners, who don’t vote, don’t spend. But, they do pay the largest share of the bill for the spending done by year-round residents. It’s notoriously perverse.

The commercial sector in Tisbury — small when compared on the basis either of geography or dollar value with the town’s residential property deserves relief and encouragement. The town’s limited business-zoned areas, hedged as they are by demanding development rules, challenge business. But, a vigorous and growing commercial sector is indispensable to a community such as Tisbury. Investments in business district infrastructure, which Tisbury has wisely made in recent years, spur spending by business owners on their properties. Where this spending has been focused, in and around Main Street for instance, the public-private extent of the refurbishment is obvious and enjoyed by all — resident, business owner, and seasonal visitor alike. On Beach Road, where public investment has been neglected (except for sewering), and limits on business uses are hobbling in the extreme, the economics in support of private owner investment don’t add up, so economic growth flags.

Where business owners are encouraged to prosper, the benefits, in the form of the goods and services they offer, the pay and benefits they extend to their employees, and even the size of the workforce, accrue to the community as a whole. Year-round residents, employees of these businesses, are better able to afford their tax bills, even if they are not discounted as is currently the case, and the town’s success is enhanced.