AMHERST — With the average single-family home in Amherst assessed at more than $500,000 for the first time, the anticipated tax bill for typical homeowners will rise by over $400 next year.
The Town Council set a single tax rate for all 6,942 parcels at a tax classification hearing Monday, under which an average homeowner with a home valued at $508,713 would see property taxes rise by $432.
Based on current estimates, with the tax rate projected to be set at $18.51 per $1,000 valuation for all parcels, the average tax bill would go up from $8,984 to $9,416.
The council voted against a shift of the residential tax burden to commercial and industrial properties. While this could save up to $554.50 for an average homeowner, it would add $5,538 to the $11,034 bill for the average commercial property.
Principal Assessor Kimberly Mew told the council that of the 6,942 parcels in town, 6,304 are residential properties, with just 410 classified as commercial and 30 industrial, with the remaining 198 personal properties, generally owned by public utilities.
“When we’re looking at the split tax rate, we do need to think about our small commercial class, and our large residential of 89%,” Mew said.
Councilors also voted against adopting a residential exemption that could mean higher costs being passed on to renters. The residential exemption is a policy that shifts the tax burden away from lower valued owner-occupied properties onto other types of residential properties.
Mew presented statistics showing that Amherst has 4,481 owner-occupied properties, and 2,158 properties that are not owner-occupied.
That the average home has climbed to a valuation of over $500,000 appeared to surprise District 3 Councilor Dorothy Pam, who observed that such an average property value seems to be much higher than in the past.
In fact, the $508,713 average home valuation is more than a 25% increase from the $404,700 average valuation just two years ago.
Even with home sales slowing down as interest rates have gone up, homes that do get on the market are going for “very, very high” prices, Mew said.
“The way the market has been trending, and the amount of money that people are willing to purchase homes for, I would expect this value to continue rising, at the moment,” Mew said
The tax classification hearing came in advance of a public forum on next year’s municipal budget that will be held Nov. 20 at 6:30 p.m.
Mew, Comptroller Holly Drake and Treasurer/Collector Jennifer LaFounatin presented financial indicators, showing how the town is preparing a $96.53 million budget plan for fiscal year 2025, but at the moment only has $96.25 million in revenue anticipated from state aid, local taxes, new growth and other sources.
Town Manager Paul Bockelman said the $281,000 deficit in the budget at a “first stab” is good, even as it makes assumptions, such as a projected 3% increase of operating budgets for the town, schools and libraries, and putting four grant-funded firefighter positions into the budget.
Drake said there will be lots of refining done in the coming months. “Right now there is a shortfall, there is a deficit,” Drake said. “What we are hoping for is with increasing state aid, and increasing local receipts, we won’t have a problem filling that gap in, and getting it to a balanced budget.”
Bockelman said challenges for preparing the budget include inflation, a growing tax base and completing strategic partnerships with the town’s higher education institutions. He said the needs of departments outweigh the resources the town has.
To confront this, he will use “position control” and limit the head count of municipal employees, so that health insurance, which is in line for a 12% increase, pension liabilities and Other Post Emplyment Benefits are minimized. “Maintaining that kind of fiscal discipline is very important,” Bockelman said.
Finance Committee member Bernie Kubiak, who has worked as a town administrator, also said Amherst needs to be careful.
“As we move forward new initiatives and spending, people may have to trim back on their wish lists,” Kubiak said. “We are in good shape, but we’re certainly not out of the woods.”
Finding more revenue isn’t easy.
At Large Councilor Andy Steinberg said the commercial and industrial tax base in Amherst remains very low compared to other towns. “That has a tremendous effect on options that are available to us,” Steinberg said.
“We do have an industrial base: It’s called education, but we just can’t tax it,” said District 1 Councilor Cathy Schoen.
Schoen said she would like to see Amherst be able to reduce its dependence on property taxes through a return to the more equitable income tax, which is something the Legislature would have tackle.