WVN #380: Tax rate rises 8.83 percent
- Dear Wayland Voter,
The new property tax rate is up 8.83 percent, virtually guaranteeing that Wayland's rate will remain among the highest in Massachusetts. The rate is only one factor determining your tax bill. On average, tax bills will increase by about 5 percent at a time when general inflation is about 1 percent.
This newsletter will explore the tax outlook for coming years as the effects of borrowing for the new high school are felt.
Also in this newsletter:
-- When voters approved the new high school, they authorized nearly tripling Wayland's indebtedness. The Finance Committee will hold a forum on Dec. 6 to discuss possible borrowing for other capital projects.
-- Town Meeting advisory forum tonight.
-- Volunteers are needed for special committees.
-- Flu shots are still available.
TAX RATE INCREASES
Wayland's new property tax rate for the current fiscal year, 2011, is $19.35 per thousand dollars of assessed value -- 8.83 percent above the last year's rate of $17.78.
The value of all property in town dropped by about 4 percent between Fiscal 2010 and 2011, so, on average, tax bills will increase by nearly 5 percent. The state must approve the projected tax rate, which is expected to be among the highest in Massachusetts. Aggregate property value has dropped 8.2 percent in the past two fiscal years.
The Board of Selectmen voted at its tax classification hearing on Nov. 22 to continue the policy of a single tax rate for both residential and commercial property. Selectmen have been reluctant to raise the rate on commercial property because of the slack economy and the fact that businesses pay a small percentage of the town's taxes.
Proposition 2-1/2 limits a town's tax levy to 2.5 percent but excludes the factors of debt exemption, override, and new growth. It does not limit the change in an individual property's taxes.
Importance of Accurate Assessment Information
Ellen Brideau, Wayland's director of assessing, urged residents to talk with the assessors department if they question the accuracy of the property description used by the department. "I want to get it right," she said.
The key factors in determining a tax rate are the town's expenditures and the value of the real estate in town. The debt burden for the new high school is beginning to be felt by taxpayers, and will increase in future years. A Finance Committee projection presented in October 2009 estimated the tax impact for FY 2011 at $298 for a home valued at the then median value of $650,000.
The Board of Assessors is seeking proposals from firms to help with the full list and measurement of all properties in town, as approved in Town Meeting a couple of years ago and recommended by the town's consultant.
The basis of accurate and fair assessments is accurate information about each property, including the buildings as well as the land.
Selectmen complimented the assessing department for the quality of the information and analyses presented at the hearing. The presentation was posted in advance of the hearing on the town website and in the online version of the Wayland Town Crier. http://www.wayland.ma.us/Pages/WaylandMA_TownNews/0164ABF0-000F8513.0/FY%202011%20Classification%20Hearing%20presentation%2011-22-10.pdf
The Selectmen's Nov. 22 tax classification hearing can be viewed on WayCAM's Video on Demand: http://waycamtv.pegcentral.com/index.php
Wayland's Single Rate
Wayland has long had a single tax rate. Alternative possibilities presented to the selectmen included incremental reductions in the residential rate and corresponding increases in the commercial/industrial/personal property rate.
For example, using an average assessed value for FY 2011 of $592,820, a residential tax rate of 19.09 would have saved the owner of that average property 1.3 percent or $154 but added 25 percent or $3,785 to the average commercial property valued at $782,000 and $16,793 to the average industrial property valued at $3.47 million.
At the extreme, the residential rate could have been 18.83 and saved 2.7 percent or $308 for the average residential property but would have raised the commercial tax 50 percent by $7,570. Industrial property also would have seen a 50 percent increase of an additional $33,587.
With the 19.35 rate, the tax bill for the residential average assessed value of $592,820 will be $11,471. The tax bills for the average assessed value of commercial property will be $15,132 and for industrial, $67,139.
For FY 2010, Wayland had the second highest tax rate in eastern Massachusetts. Wayland's status compared with others, if the Department of Revenue approves the 19.35 rate for FY 2011, won't be known until all communities' tax rates are approved by the state. Sudbury has had a split rate.
HOW THE TOWN BUDGETS AND SETS TAX RATES
Under Massachusetts' Proposition 2-1/2 total town taxes -- in Wayland now about $60 million -- can exceed the limit in three principal ways:
1) If voters approve an operational override
2) If voters approve a debt exclusion
3) If new or expanded properties bring in new taxes
An operational override allows the total town budget, equal to the total town taxes for a year, to increase more than 2.5 percent the next year. This permanently raises the tax total limit or levy. This increase typically pays for increases in salaries, benefits, goods and services. If the increase in the total of all these costs is projected to be above 2.5 percent, the town may ask voters to approve overriding the limit, as Wayland has done several times in the past decade.
A debt exclusion override pays for borrowing. Typically, this borrowing is for a new building or for building repairs or for expensive equipment, like a large truck. The amount added to the budget is debt service. The debt service on the new high school for FY 2011 is the amount of principal and interest paid in FY 2011 for loans the town took out to build the new high school.
The high school loans may take 25 years to pay off. Smaller loans are paid off more rapidly.
In many years, some loans are paid off and thus come off the books. Then new loans may be requested for another big truck or another new building with the explanation that this does not increase your taxes. "Tax Neutral" means that the debt service (yearly principal and interest) for the new loan is not larger than the debt service paid the previous year for the loans that are coming off the books.
An individual property owner's taxes may not increase by exactly the same percentage as the total town budget. This depends on how the individual property is assessed that year. But, on average, everyone's property taxes go up by about the same percentage as the total town budget.
The Finance Committee says it will try to avoid operational overrides. FinCom also usually tries to make any new debt exclusion tax neutral. To accomplish both goals, decisions must be made about how capital items (acquisition and improvement of land, facilities, equipment and infrastructure) are funded. For example, if a computer is to be bought, it could be funded by debt exclusion borrowing, or from cash (outright purchase) or non-debt-excluded borrowing. When more items can be funded by debt exclusion borrowing, more money can be allocated in the operational budget without causing an operational override. However, normally not all capital items can be funded by debt exclusion borrowing while still remaining tax neutral. Thus deciding how to fund capital items is a balancing act.
FinCom has to decide how to manage requests from different departments, given a financial goal such as level funding. For Fiscal 2012, FinCom could have issued guidelines a few months ago asking for less than level funding to make up for the high school debt service. In fact the FinCom is asking for level-funded FY12 budgets, plus "step and lane" contractual increases, which essentially enables increased spending. This means each department must find a way to save money and spend less than last year. The FinCom will schedule public meetings in January to review and discuss each department's budget.
About 70 percent of the town budget consists of school spending. For many years the school population has been declining, helping to limit spending increases. Next year the kindergarten population will rise by 15 students.
The Finance Committee will hold a public forum on debt and capital expenditures on Monday, Dec. 6 at 7 p.m. at the Town Building. Topics include a review of the Finance Committee's capital policies, measurements of debt level, comparison with peer towns, the Capital Improvement Program and future capital projects.
This is a key meeting for learning about the town's debt capacity and what residents may be asked to approve at the spring election ballot and Town Meeting, which influences taxes for Fiscal 2012.
Even if no new items are identified by the FinCom or approved at Town Meeting, Wayland's exempt debt and interest payments will jump from $3.3 million in FY 11 (the current year) to $5.58 million in FY 12 and $5.32 million in FY 13, according to the debt schedule posted online. These figures do not include payments for any water-related (and thus fee-based) infrastructure projects nor for non-exempt borrowing for some smaller items such as computers.
The new high school is the key driver in rising debt. The debt schedule shows debt and interest payments for the high school in FY 11 as $717,500, quadrupling to $2.9 million in FY 12. The debt schedule is available at http://www.wayland.ma.us/Pages/WaylandMA_Finance/TreasurersDebtSchedule.pdf
Even If Wayland does not approve any new capital items, the town's debt will not fall below the current level until 2019. There will be new capital items in the coming years. In general, the town's debt does not decrease. Some new capital items, such as building repairs and new vehicles historically have been deemed necessary by most citizens.
TOWN MEETING ADVISORY FORUM TONIGHT
If you have opinions about the recent Town Meeting or suggestions for the future, you can air them at a forum sponsored by the Town Meeting Advisory Committee at 7:30 p.m. on Monday Nov. 29 at the Town Building.
Three subcommittees -- on procedures, facilities and electronic voting -- will be on hand for the discussion.
For more information, call Assistant Moderator Dennis Berry at 508-655-1497; or e-mail dennisj.berry@... .
3 SPECIAL ADVISORY COMMITTEES
The selectmen are looking for volunteers to serve on temporary committees on the Public Safety Building, the future of town land sometimes referred to as Dudley Woods and the celebration of Wayland's 375th anniversary.
The three-member Public Safety Building Advisory Committee will review proposals for dealing with the repeatedly flood-damaged building. Preferred expertise: structural or civil engineering, project management, law, building design or construction, design and installation of cooling and heating systems.
The nine-member Doran Area Advisory Committee will oversee consultants' studies of potential uses for the area bounded by Doran, Curtis and Pond Roads and Cross Street. Eight of the slots will be filled by designees of these groups: Dudley Pond Association, Wayland Neighbors for Responsible Land Use, Surface Water Quality Committee, Conservation Commission, Recreation Commission, Planning Board, Housing Partnership and Housing Authority. The selectmen will appoint the ninth member, who will be the chairperson.
Applicants for chairperson should submit a letter and resume by Dec. 9 to Town Administrator Fred Turkington: fturkington@.... Contact Turkington to apply for the Public Safety Building committee.
In 2013 Wayland plans to mark the 375th anniversary of its founding with events throughout the year. At the suggestion of the Public Ceremonies Committee, the selectmen are forming a special committee to plan the celebration of Wayland's historical, agricultural, business, governmental, religious, artistic and cultural heritage.
If you'd like to help plan the celebration, please contact the selectmen by Dec. 8 at
FLU SHOTS STILL AVAILABLE
Flu vaccine is still available through the Wayland Board of Health office for college students and others who were unable to attend recent flu clinics.
Pneumonia vaccine is also available, particularly for people aged 65 and older who have not yet received this vaccination; those under 65 with a chronic medical condition such as asthma, diabetes, or a medical condition that lowers the body's resistance to infection; those aged 19-64 who smoke.
Tdap vaccine (Tetanus, Diphtheria, Pertussis/Whooping Cough) immunization is recommended for new parents, grandparents aged 64 or under, and child care providers. This vaccine protects the babies with whom they have contact and is a one-time adult booster.
Please contact the Board of Health office at 508-358-3617 to make an appointment for these vaccines, or if you have any questions.
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Wayland Voters Network
Michael Short, Editor