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Taxes and fairnessActing on a recommendation from the town assessors, Chilmark selectmen Tuesday agreed to apply the same tax rate to each of the five categories of taxable real estate and personal property in their town. Some towns, such as Tisbury, choose to have one rate, a lower one, for residential property, and another, higher, for commercial property. In Tisbury, they also discount the assessed value of residential property owned by year-rounders. Chilmark has never done so.
In Chilmark, there are only 22 commercial and two industrial properties. The rest are residential. In addition, 80 percent of Chilmark's tax dollars come from non-voting, non-commercial owners of residential property. The five categories of taxable property are residential, commercial, industrial, open land, and personal property. In addition to adopting the single tax rate, the Chilmark selectmen asked the assessors to recommend a threshold value for taxable personal property, so that the town will not be billing personal property accounts valued at $1,000 or $2,000, at the tax rate of $1.85 per thousand. The billing effort may not be worth the return, the selectmen agreed. (The $1.85 rate is the current rate, yet to be updated by the assessors when the state Department of Revenue has completed its review of Chilmark property data.)
Chilmark is remarkable for its high real estate value, low cost of municipal government, and consequent, astonishingly low tax rate. But, it is not unusual among Island towns. Like Chilmark and every other Vineyard community, Tisbury's total real estate value is based predominantly on residential property, and the burden of Tisbury's tax levy falls disproportionately upon non-voting, seasonal property owners who require relatively little in the way of expensive municipal services, such as education, in exchange for their real estate tax dollars. The value of residential real estate in town is 89 percent of the town's entire value. Commercial and industrial property, taken together, adds up to less than 10 percent of total town value.
To make bad worse, Tisbury has a special (this is what we think of you) rate for commercial property that is nearly double the rate for residences. In these ways, Tisbury has for several years shifted the real estate tax burden unfairly from residences to businesses and from residential property owned by year-round town residents to property owned by seasonal residents.
Thus, unlike Chilmark, and alone among Island towns, since 1988, Tisbury has chosen to treat both seasonal property owners and commercial property owners unfairly. Tisbury's selectmen will face the question of tax rate differentiation again next month. If the selectmen continue what is currently the case, 949 residential properties owned by year-rounders, about a third of all residential properties in town, will enjoy a 20 percent write-down of their properties' assessed value. That's a write-down of about $158,000 from an average assessment of $790,000 for a Tisbury residential parcel. That property owner will get $821 dollars off his tax bill. The $821 dollars will be added to the tax bill of a non-voting summer property owner or a commercial property owner.
For the owner of a commercial property in Tisbury worth $600,000, compared to a residential property of the same value, when the residential exemption is taken into account and the higher commercial property rate is applied to the same assessed value, the year-round residential property owner will save $90, and the commercial property owner will pay $2,412 more, a 175 percent shift.
This is a shameful exercise in cost shifting on the part of Tisbury officials. It was unfair in fiscal 1988, when it began with a 10 percent exemption for year-round residential property owners and a commercial rate slightly lower than the residential rate. It is astoundingly unfair and destructive today, when the residential exemption is 20 percent and the difference between the residential and commercial rates is nearly double. The practice should be retired.