West Newbury Metropolis Council predicts a 3.5% tax enhance on native information

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 West Newbury City Council predicts a 3.5% tax increase on local news

WEST NEWBURY – City administrator Angus Jennings forecasts a 3.5% increase in the tax rate for the next fiscal year.

“Based on all known and estimated amounts, I recommend setting a tax rate of $ 14.93 for fiscal ’21,” Jennings told select employees this week. The current tax rate is $ 14.42. It’s not the “worst case scenario,” Jennings said, but he admitted, “it’s going to be a noticeable increase for homeowners.”

City officials were hoping to keep the rate hike at 2%, but Jennings said the estimated rate is based on four factors.

The budget for fiscal 2021 increased by 3.9% – or $ 619,524. Although spending on education has increased – offset in part by the city’s school stabilization fund – Jennings reported that nearly 60% of the net increase was due to costs of non-education.

The reduction in the one-time tax compensation payments from this year to the next also played a role.

Even with Town Meeting voters agreeing to send $ 220,000 in overlay surpluses in October to lower the new tax rate, the amount was well below the $ 400,000 free cash used to offset the tax rate for the fiscal year 2020, and made around 18 cents of the budget from the 2021 tax rate, Jennings noted.

A third factor Jennings mentioned was the impact of the pandemic on sales estimates for the coming year.

During budget preparation, non-real estate tax revenues were projected to be $ 1,387,600, but revised projections resulted in a figure closer to $ 1,272,550.

The 8.3% reduction is “entirely due to the effects of COVID-19” on excise tax, permit fees, investment income and rental income, which is about 12 cents of the 2021 fiscal year tax rate, Jennings said.

Finally, Jennings cited “overly optimistic projections of the values ​​assessed” as a contribution. The new growth projections for fiscal 2021 turned out to be conservative – $ 167,000 projected versus $ 241,000 actual – but projections of an overall increase in estimated value were higher than actual – $ 40.7 million projected versus $ 24 million actual.

“The appreciation was still healthy at 2.5%, but using a five-year average that included the above-average appreciation in fiscal 2016 pushed that number up, reducing the estimated impact of the tax rate at the beginning of the process,” explained Jennings.

He stressed that all estimates are subject to change, with the final rate being set by the Treasury Department once all requirements are met.

The city met its final requirement on Monday when select individuals met with the Audit Committee for the annual hearing on tax classification. Selectmen agreed to the recommendations of the auditors to introduce a uniform tax rate and not to apply the free space discount, the residential exemption or the small business exemption.

When asked by a select few, Jennings noted that despite this year’s economic downturn, paying late or unpaid property tax bills was not an issue. Some taxpayers pay later than the due dates, while others have payment arrangements in regular monthly installments, with penalties lifted.

“It’s not something that is alarming,” he said.