HADLEY — Hadley officials are sticking with a single-tax rate for all properties this year, with the average homeowner expected to pay around $170 more, even as members of the Select Board say they would like to explore putting a greater share of the tax burden on commercial entities.
At Wednesday’s tax classification hearing, the three board members present voted 3-0 to endorse a single-tax rate, to be set at $11.45 per $1,000 valuation, down from this year’s $11.63 per $1,000 valuation.
The average residential taxpayer, living in a home assessed at $475,929, would see the tax bill go up by $170, from $5,279 to $5,449.
With voters this fall rejecting a $2.25 million Proposition 2½ override tax-cap override, the increase in residential property tax bills is smaller than the $272 increase last year, when the average home was assessed at $453,936.
Still, understanding that many residents are asking about a split tax rate as a way to reduce the burden of an override, Select Board member David J. Fill II said he believes people would be more amenable to supporting increasing to their taxes if shopping centers and big box stores paid at a higher rate.
“I think by setting a single rate we’re making it harder for ourselves in the spring, or sometime in the future, to have an override succeed,” Fill said.
“I want to go on record in saying a split rate should strongly be looked at for next year,” Fill said.
Board member Amy Parsons, too, said she would like to seriously consider the idea, but understands that some farmers would face higher bills on their land that isn’t in the state’s Chapter 61 program.
“I think we have to bite the bullet this year,” Parsons said, adding that she would like to contemplate the split rate for next year.
Chairman Randy Izer was less inclined to support the ideas. “If we have a split rate, we’re just setting ourselves up for legal problems,” Izer said.
It could also bring in less money if businesses leave town, even though some residents think that a split rate would yield more revenue for the town.
Members Molly Keegan and Jane Nevinsmith were absent.
Principal Assessor Cheryl Hollway explained that the $170 increase for residential taxpayers is only a bit higher than in a typical year.
“The normal increase is around $163,” Hollway said.
Hollway said quite a bit of new residential has gone up and the completion of the new buildings for the Balise Subaru dealership on Route 9 have yielded $202,000 in new growth revenue, down a bit from nearly $300,000 last year.
Last year’s larger increase in property taxes was attributed was $1.07 million for the locker room project at Hopkins Academy and removing the 300 Venture Way site from the tax rolls after Pioneer Valley Chinese Immersion School purchased the building.
Hollway said the town is seeing a gradual increase in the amount of commercial property in relation to residential property, with commercial now paying about 31% of property taxes.
A chart showing the average tax bills in the region indicates Hadley residents pay less than neighboring communities, with Amherst at $9,693 and Northampton at $7,459, but slightly more than Easthampton at $5,353 and Sunderland at $5,320.
The Board of Assessors had no recommendation on a single or split tax.
Chairman Jeffrey Mish said the Select Board should make the decision, which is why his board is making no advisory on it.
“We’re not going to make the recommendation going forward,” Mish said. Mish said he anticipates that in future years there will be more complicated discussions.
If the town went to a maximum shift, the residential rate would fall to $8.85 per $1,000 valuation, but the commercial rate would go up to $17.17 per $1,000 valuation.
Most farmers would be unaffected by the shift, but those without at least 5 acres in the state’s Chapter 61 program would pay more.
Tax Collector Susan Glowatski said people “not in Chapter” would see a significant increase. This could lead to abatement demands and the need for town counsel assistance.
Fill, though, noted the town already did a small shift in the midst of the pandemic .
“We tried it one year during COVID, and from what I remember, we didn’t have a lot of abatement requests,” Fill said.
Mish said commercial values had gone done during COVID, likely reducing the complaints.
Due to the possible impact on farmers, Finance Committee member Peter Matuszko said he would like to push state officials to exempt agricultural land from the commercial tax rate. He is concerned that the decision the Select Board took reveals they are being “strong-armed” by farmers at the expense of homeowners.
Paul Benjamin of Newton Lane said there are a lot of entrepreneurs in Hadley and the town isn’t all Walmarts and large companies, and that putting more burden on commercial could backfire. He also wondered if the town could that identify companies that are turning homes into rental income.
“If we’re doing that, do we tax rental homes that are exclusively rental?” Benjamin said.
In other votes at the hearing, the Select Board supported recommendations from the Board of Assessors to offer:
- no open space discount, which can be for up to 25%, because no land in Hadley is classified that way;
- no residential exemption, which can be for up to 35% of the average assessed value for owner-occupied homes, and would shift the tax burden to higher-end homes. That exemption is usually reserved for communities on Cape Cod and resort areas with rental homes;
- no small commercial exemption, which can be up to 10% of the property value, but can only apply for properties that are under $1 million and with 10 or fewer employees.
