HOLYOKE — The city has set a new tax rate for the year, with bills expected to arrive in the coming weeks.
The City Council voted 7 to 5 to approve rates of 19.08 per $1,000 in valuation for residential property owners and $39.73 per $1,000 in valuation for commercial property owners. This year’s rates were $19.29 for residential and $39.86 for commercial. Holyoke has a “split tax rate” that separates the rates for commercial and residential properties.
This year the city was required to reassess all property in the city, and overall property values rose by $84 million, bringing the total values of the city’s property to $2.24 billion, according to the city assessor’s recent tax classification hearing. The average value for a single-family home has risen from $190,637 last year to $197,677, according to values provided by the assessor’s office.
With that increase in valuation, the actual amount that property owners will be paying will increase, despite the lower tax rates. The average single-family homeowner, for example, will pay about $94 more.
The new tax rates were set after debate over three supplemental budget proposals put forward by Mayor Alex Morse. Ultimately, the council reduced one of the mayor’s $1.23 million proposals to $750,000, despite Morse saying that the amount won’t be enough to carry the city to the end of the fiscal year.
“We’ll be back here in the spring, as some councilors have suggested, and this will be the first time in years that the City Council has left money on the table when we actually have needs in this city: personnel, public service needs, infrastructure, capital projects,” Morse said.
With its cut to the supplemental budget, the city stayed below the tax levy ceiling — the maximum a municipality can tax its property owners under the state statute known as Proposition 2 ½. The city could have collected up to $56.04 million, but with the cut to the mayor’s proposal the city is now around $705,000 under the levy ceiling.
Some of those in favor of the cut to Morse’s supplemental budget, which also passed 7 to 5, characterized it as tightening the budget.
“If we’re in a period of financial austerity, which we should be, then we should be conducting the business of the city in that spirit,” Ward 5 City Councilor Linda Vacon said. “We need to tighten the belt, we need to manage the budget.”
Others took issue with the fact that the supplemental budget was put forward so late in the year, and so close to when tax rates needed to be set.
“I don’t understand … why we’re doing this in December every year,” At-Large City Councilor Joe McGiverin said. “It’s getting more and more frustrating.”
In a phone interview Friday, McGiverin said that the new tax rate was a compromise and that he would have liked to see less of a tax burden on businesses. Ultimately, he said, property taxes are a taxing scheme “forced upon” cities by the state.
“The good news is that even though it’s going to be a tough final six months of the fiscal year, we didn’t hit the ceiling,” McGiverin said. “And that means we’re making up the values that we lost when the Mt. Tom coal plant … came offline” in 2014.
At the time, the coal plant represented the second-largest taxpayer behind the Holyoke Mall, and its closure significantly impacted the city’s tax revenue. But rising property values are good signs for the city’s finances, McGiverin said.
“There’s good signs,” he said. “We still have a long way to go, but they’re good signs.”
Councilors also approved a $6.54 million bond to pay for water main replacement in the city.
The improvements come after a fire on Fairfield Avenue that destroyed a historic home highlighted the city’s aging water infrastructure. Water pressure was an issue for firefighters battling the blaze.
In 2018, the city approved a $13.39 million bond for water works capital projects, including $5.96 million for high-priority water main replacement — what Water Works General Manager David Conti called “the worst of the worst” at an October meeting of the Public Safety Committee.
The bond passed at last Tuesday’s meeting will address 10 additional high-priority water main projects.
The meeting was the last of the year, and the last for two city councilors who did not run for re-election: Ward 4 Councilor Jossie Valentin and At-Large Councilor Daniel Bresnahan.
The newly elected City Council will be sworn in on Monday, Jan. 6 at 10 a.m. The next full meeting of the City Council will take place Tuesday, Jan. 7.
Dusty Christensen can be reached at dchristensen@gazettenet.com.