November 13 2014

Selectmen to Hold Hearing on FY15 Tax Rate

By: Rich Hosford

The Board of Selectmen will hold the annual Tax Classification Hearing during the meeting on Monday, November 17.  

 

During the hearing the board will set the property tax rate for Fiscal Year 2015 (FY15). Burlington has a split tax rate, meaning that residents pay one amount and commercial, industrial and personal property owners, effectively meaning businesses in town, pay another rate. The big decision for the board is how to split the tax burden between residents and businesses. 

 

The first major factor is setting the tax rates is to hit necessary tax levy to keep services, pay town employees and make payments on debt, among other expenses. This amount normally goes up each year. In FY14 the tax levy was $92,154,384. The projected tax levy for FY15 is around $95.6 million in most projected scenarios the board will choose from on Monday (the levy limit is at $99.9 million but it does not appear the board will choose to hit that amount with taxes). 

 

The second thing that comes into play is the total assessed value of the residential and commercial properties in town. Property tax rates are set as the amount a homeowner or business must pay per $1,000 of assessed value. Overall, the value of both residential and commercial properties in town went up this year following the three-year revaluation undertaken in the beginning of 2014. In FY14 the total property value in town was $4,767,295,033. After the revaluation it is set at $5,289,708,724 for FY15. That means that even if the tax rates per $1,000 go down a little, residents and businesses may still pay more in total property taxes this year. 

 

Finally, the board must decide on the split between residents and C.I.P. In recent years the split has been about 40 percent for residential properties and 60 percent for commercial properties, meaning that though the total value of residential properties in town far exceeds commercial properties ($3.3 billion to $1.9 billion), businesses carry the majority of the tax burden. 

 

During a planning meeting the board had last Monday members indicated they would like to keep the split similar to where it has been, though the board does have the authority to set it however they see fit. Normally the discussion around setting the rate is a balance between not unduly burdening residents, especially those on lower or fixed incomes, without putting so much of the burden on businesses that it becomes a disincentive for businesses to come and stay in town. 

 
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