The Aquinnah select board unanimously approved a single tax rate during the fiscal year 2023 tax classification public hearing on Tuesday morning.
Tax assessor Harald Scheid, who had to work through various Massachusetts Department of Revenue requirements with his Regional Resource Group colleague Daniel Golden, led the presentation for the public hearing.
“This hearing really ultimately is about the setting of a tax rate, or alternatively, shifting the tax burden onto the commercial property owner to provide a reduced residential rate,” Scheid said.
Scheid “highlighted some key aspects” of the tax rate-setting process. The tax levy, one of four major ways Aquinnah’s budget is funded, is set to raise $5.73 million in property tax revenue. This reflects a 6.6 percent increase from the fiscal year 2022 property tax revenue of $5.38 million.
“By far, the property taxes are the greatest source of revenue to the town,” Scheid said.
Aquinnah’s tax levy ceiling, or the maximum amount that can be collected, is 2.5 percent of the “full value of the town,” according to Scheid. Aquinnah’s aggregation value equates to $940.1 million and the levy ceiling is $23.5 million. The town’s levy limit, or the “maximum allowable levy,” was certified by the Department of Revenue at $5.74 million. Meanwhile, Aquinnah’s fiscal year 2023 new growth revenue, “property taxes derived from newly taxable properties or property improvements,” was certified by the department as $30,199.
Residential properties made up 98.1 percent of Aquinnah’s property valuation at $922.5 million, which would put too much of a burden on commercial properties if there were a split tax rate.
“It would really take a huge increase in the commercial tax rate to yield even a very modest decrease in residential taxes,” Scheid said. A 1 percent reduction in residential taxes would require approximately a 51 percent increase in commercial taxes, according to Scheid.
When board member Gary Haley pointed out a $200,000 discrepancy for the levy to be raised, Aquinnah town accountant Emily Day said there was “an override of $200,000.” This was approved during the annual town meeting in May.
Moving on, the proposed tax rate for fiscal year 2023 would be $6.10 per $1,000 valuation. Sales in fiscal year 2022 indicate that property values have appreciated more than 10 percent. According to the presentation, “this required that assessed valuations be increased accordingly,” and most property owners “will see higher assessed valuations” that will be “partially offset by a lower tax rate. In fiscal year 2022, the tax rate was $6.27 per $1,000.
“This was a major revaluation year for us. In that effort, we’re trying to reflect market conditions as they existed in calendar year [2021]. Hasn’t been that long ago, but we all know 21 to be an extraordinary year in the real estate market,” Scheid said. “Appreciations across the commonwealth, and no less in Aquinnah.”
Scheid showed that the “average single-family valuation” in fiscal year 2023 is $1,787,000 and the proposed rate leads to an average of $10,901 in average residential tax bills. In fiscal year 2022, the average single-family valuation was $1,589,400, and the average residential tax bill was $9,966. Despite the lower rate, Aquinnah residents will see a $935, or 9.4 percent, increase in their taxes on average, compared with fiscal year 2022. According to Schneid’s information, Aquinnah’s 400 single-family homes will have a lower tax rate than 33.3 percent of Island towns, and 96.4 percent of the rest of Massachusetts.
Aquinnah town administrator Jeffrey Madison told Scheid and Golden an email will be sent to them about “major capital improvements in the town” and to ask for a determination of “the effect of the values of those capital improvements on the tax rate as it’s being set today.” Aquinnah is planning renovations to the Aquinnah Circle comfort station and the town hall and offices.
The board will send the required documents to the Department of Revenue for approval.
