HADLEY — A homeowner living in an average single-family home, assessed at $510,723, will pay nearly $800 more in property taxes in the coming year, according to information provided to the Select Board at its Nov. 4 meeting.
At the annual tax classification hearing, the Select Board voted unanimously to set a single tax rate of $12.21 per $1,000 valuation, following a presentation by Principal Assessor Cheryl Hollway and Jeff Mish, who chairs the Board of Assessors.
If that rate is approved by the state’s Department of Revenue, the average single-family home, which has increased in value from $475,929 to $510,723, would have its average property tax bill rise by $781, from $5,454 to $6,235. That 14% increase in tax bills, well above the $170 increase last year and $272 two years ago, is partly attributed to the successful $1.5 million Proposition 2½ tax-cap override last spring.
The vote on setting a single tax rate came despite the Select Board earlier informing residents that it would wait until this week to decide whether to adopt a split tax rate. That would put more of the tax burden on commercial properties and was done for one year during the pandemic.
Select Board members reluctantly agreed to the vote after Hollway and Tax Collector Susan Glowatsky both said there was urgency in submitting information to the state and doing the work necessary to get tax bills out to residents.
Hollway explained the Board of Assessors is not supportive of having a shift in the tax rate because of how this would impact the town’s commercial and farming sector.
“Their feeling for this was while a split tax rate could provide some relief to the residential class with the recently passed override, a single tax rate would continue to protect all of the agricultural economy and maintain a business-friendly environment,” Hollway said.
“Ultimately, this approach provides a safer path forward for maintaining stability in the town of Hadley,” she added.
The tax classification hearing shows that residential values are up 7.6% townwide but commercial, industrial and personal property values are up 3.3%. Hollway said these statistics are based on market sales in the community.
Select Board member Molly Keegan said she wouldn’t support having commercial pick up more of the taxes, observing she doesn’t want to create another reason for developers, already facing inflationary pressures from tariffs and gas prices, to not come to town.
Select Board member Randy Izer said there are already worries about the future of brick-and-mortar stores and raising their taxes would make Hadley less appealing.
“That’s what [single tax rate] brought the majority of businesses here, and should they be punished for that? I don’t think so,” Izer said. “I think that they’ve certainly made a huge impact on this town, and if the businesses leave us, the residents are going to pay way more than we are now.”
Town Administrator Nate Malloy said commercial entities already pay a good share of the taxes in town.
“I think we already have a good balance of commercial to residential, and I don’t think we’d want to do anything to dissuade that,” Malloy said.
There are split tax rates in both West Springfield and Springfield, but that has been customary practice, he said.
Two former members of the Finance Committee spoke against a split tax rate.
Paul Benjamin, who owns the Hadley Crossing commercial office building on Route 9, said this would affect small landlords and businesses, not just big-box stores, and that many of the restaurants, even those with national brands, like Dave’s Hot Chicken and Joy Bowl, are franchises owned locally.
“We are under severe pressure from increased costs, utilities have gone through the roof, wage increases, we have tenants under the same squeeze, and we want to make sure they can afford to be here” Benjamin said.
Benjamin added that parts of West Springfield are blighted with empty office buildings, suggesting that the split tax rate is overburdening property owners there, and that high taxes are also affecting businesses in downtown Northampton, where he said there are more vacant storefronts than previously. Northampton, however, has a single tax rate like Hadley.
“We don’t want to end up like that,” Benjamin said, observing that he doesn’t want to see more vacant Hadley commercial properties. “Right now, we’re a vibrant community with a lot of small individual business owners.”
Shardool Parmar, owner of Pioneer Valley Hotel Group, said his company asks for abatements every year on the hotel property it owns in Springfield. He said the context of their split tax rate is different from Hadley. Springfield has a significantly larger population base and no concerns about the seasonal aspects of being a host community for the University of Massachusetts like Hadley does.
“When you increase costs here, it (has) impacts, especially the smaller businesses,” Parmar said.
Parmar said the public should understand the benefits they get from the commercial taxes, water and sewer payments and meals and occupancy taxes, which together bring in $7.5 million a year. That, he said, is well above the $4.5 million for the public safety departments, meaning residents are essentially getting free police and fire protection.
The Select Board also voted against the open space discount, which can be up to a 25% reduction, but no parcels in Hadley are classified in this way; rejected the residential exemption, which can grant up to a 35% reduction for owner-occupied, principal residences; and denied the small commercial exemption, for businesses assessed under $1 million valuation and with fewer than 10 employees.
