SPRINGFIELD — Saying it’s the best of many unattractive options, the city’s tax classification committee voted to recommend a rate that will increase the average homeowner’s tax bill by $175 this year.
The proposal technically lowers the rate for both homes and businesses by 91 cents per every $1,000 of assessed value of the property. But because assessments have increased dramatically over the past few years, bills will increase, officials said.
Mayor Domenic J. Sarno on Monday released the same recommendation of $16.14 per $1,000 valuation for residential and $35.49 for $1,000 for commercial, industrial, and personal property.
The City Council will hold a public hearing at 5:30 p.m. Tuesday in City Hall to hear opinions about the rate. That will be followed by a regular meeting to vote on setting the rate, said City Councilor Timothy Allen, who is also a member of the tax classification committee.
“Due to the booming real estate market, the average single-family tax bill could have increased by approximately $519 using the same residential rate as last year, however with the combination of the significantly lower residential tax rate and over $8 million the Sarno administration has committed to help offset the FY24 tax levy, the average single-family tax bill will only increase by approximately $175, a $344 decrease from potential amount of $519,” Sarno said in a statement about his recommendation.
This year, the price of the average single-family home value has increased to $238,700 from last year’s $215,700, a nearly 11% increase. In the same time, the average value of two-family homes has increased by 14.7%, and condominiums have risen by 16%, said Patrick Greenhalgh, chairman of the Board of Assessors.
Sarno said he has done his best to reduce the tax levy, or the amount needed to be raised to finance the budget, this year. Already he has allocated $7 million from different sources to lower the rate and has proposed using an additional $1 million of the city’s $17 million in available free cash, which was certified a week ago, to reduce taxes even more.
The members of the tax classification committee voted 6-1 to recommend, but most said they were frustrated that they really had limited choices when setting the tax rate.
“What we are doing is not that significant,” said Wilfredo Lopez, a six-year member of the committee and owner of Homes Logic Real Estate. “This is an afterthought of the budget, and we don’t consider the budget.”
Saying the budget has increased some $14 million this year, Lopez said he believes it would benefit the city to bring in an outside management firm to look at efficiencies and other ways to trim costs.
While the increase is significant, member Mark Howard pointed out that it is not far off from the high inflation rate the country has seen over the past two years.
“I think the recommended split is fair. I’m here to advocate on behalf of businesses; we want to make sure the business community stays healthy and provides jobs, but we want to be sensitive for residents,” said Diana Szynal, president of the Springfield Regional Chamber of Commerce and a committee member.
Member RuthAnn Hamilton-Stutts said she has owned her own house for years but is still struggling to deal with the rising tax bills and other expenses.
While cutting the budget would be the best way to reduce the tax rate, she also said the city should look at the nonprofit agencies such as the three colleges and Baystate Medical Center to try to get in-lieu of tax agreements since they own a lot of property, receive city services and pay little or no taxes.