Tisbury continues to shift tax burden to businesses
By Janet Hefler
Published: June 23, 2011
Weighing requests from business owners for reduced commercial property taxes against concerns about economic uncertainties, the Tisbury selectmen voted Tuesday night to continue a tax shift that results in an additional 6.54 percent of the town's tax levy being billed to commercial, industrial, and personal property classifications. In addition, the selectmen voted to continue offering a residential tax exemption at a rate of 20 percent.
The vote to keep the tax shift at 160 percent for fiscal year 2009 (FY09) means that under Tisbury's multi-tiered tax rate, tax bills for commercial properties are based on a rate 160 percent higher than the base residential rate. The selectmen agreed to stick to the 160 percent shift at the conclusion of a tax classification hearing held during the selectmen's regularly scheduled meeting. The tax rate classification hearing had been continued from Dec. 4, 2007, and Jan. 3, 2008, to allow time for the town to obtain final certification of fiscal year 2008 (FY08) real estate values from the state Department of Revenue.
At the December hearing, several Vineyard Haven business owners argued that the town's tiered tax rate, which shifts an additional share of property taxes from residential to commercial properties, has a detrimental effect on the community's business growth. A few town residents countered with arguments that they could not afford paying more taxes if the businesses paid less.
At this week's hearing session, only one person offered comment. Philip Combra, owner of Bert's Barber Shop at Tisbury Market Place, told the selectmen he thought Tisbury businesses were being punished with a higher tax burden because residential property values have been driven up by high-priced second homes owned by non-residents.
At a tax classification hearing in November 2006, the Tisbury selectmen voted to reduce the tax shift from 175 percent to 160, with a promise to consider possibly reducing it again the next year. However, Mr. Israel said Tuesday night he was reluctant to vote for another tax decrease for businesses this year. "There are too many economic factors this year for me to want to make a change," he said.
In order to understand what the tax shift means in dollars, selectman Denys Wortman referred to a chart showing sample tax bill amounts using different shift percentages. He pointed out that the difference at a 155 percent shift in the residential rate with a residential exemption versus a 160 percent shift amounts to $20 more on a property valued at $500,000 and $140 at the commercial rate. "I could live with a five percent shift down to 155," Mr. Wortman said.
When it comes to dealing with increased taxes, selectman chairman Tom Pachico said, "It's easier to make up that difference in a business - it might be 25 cents more a haircut - than it is for a person on a fixed income."
When Mr. Israel made a motion to keep the tax shift at 160 percent, Mr. Wortman abandoned his support of reducing the tax shift and seconded the motion, which all three selectmen approved.
Assistant assessor Ann Marie Cywinski informed the selectmen the FY08 residential tax rate adopted last May will be $5.47 per $1,000 of assessed valuation and the commercial rate $8.81 per $1,000 of assessed valuation. By comparison, the FY07 residential tax rate was $5.63 per $1,000 of assessed valuation and the commercial rate $9.06 per $1,000 of assessed valuation.
In addition, Ms. Cywinski told the selectmen that the excess levy capacity for FY08 was $277,137, which can be used in FY09, since it is money the town assessed but did not need to fund the town budget.
The selectmen also approved continuing the residential tax exemption at 20 percent, which is given to Tisbury residents who qualify by filing an application and copies of documents showing proof of their residency. In discussions about the exemption last month, the selectmen said they feel it helps year-round residents cope with the high cost of living on the Island.
Mr. Israel cautioned that the town's infrastructure needs, which voters did not see fit to spend money on last year, still need to be addressed. Despite that, the town is in sound financial shape, he said, for which he commended tax collector and treasurer Tim McLean.
In other business, the selectmen revisited the issue of filling vacancies on two committees that had seen a lack of applicants. Since their last meeting, three people volunteered to fill two vacancies on the Embarkation Fee Committee. The selectmen appointed Jynell Kristal and Ralph Friedman, but rejected the third applicant, Allison Colarusso, because she does not live on the Island full-time. Mr. Pachico said the committee will meet at 7 pm on Jan. 28 at the town hall annex to begin considering requests from town departments for possible funding with the embarkation fee money.
The selectmen also received applications from Pamela Street and Roland M. Miller to serve on the Water Department Charter Study Committee. Mr. Israel said he would present the names to the committee at the next meeting. Noting that Mr. Miller's letter of application indicated he moved to Tisbury last fall, Mr. Pachico said that given the water department's charter has been in effect for 100 years, he would like to have people on the committee who are familiar with its background.
Mr. Wortman reminded everyone about an All-Island Selectmen's Association meeting next Wednesday on Jan. 23 at 7 pm at Tisbury town hall.
