Springfield, MA – Mayor Domenic J. Sarno announced today his preliminary recommendation for Fiscal Year 2020 property tax rates. He will forward his proposed rates to the City Council for consideration at a meeting scheduled for Monday, November 25 at 6:00 p.m. The recommended rates are $19.52 for residential property and $39.26 for commercial, industrial, and personal property (CIP). This recommendation has been developed in consultation with Chief Administrative and Financial Officer Timothy J. Plante, Chairman of the Board of Assessors Richie Allen and the Board of Assessors.
Both proposed rates reflect decreases from last year’s rates of $19.68 for residential and $39.30 for CIP. It would be the lowest residential rate since FY2010. The average single-family tax bill produced by these rates would be $3,143 which is expected to keep Springfield in or near the bottom ten percent of all communities in the commonwealth. Last year, the average bill was $2,980. While the average includes all single-family parcels, when we exclude all single-families that had some physical change qualifying as new growth, the average bill change is $149 and the median bill change is $138. The strong residential market in the city is notable for the historic highs in selling prices which is reflected in the average single-family value rising to $161,000 from last year’s $151,400.
Mayor Sarno states, as I always do, my administration has to “look at the big picture” to continue moving all in our city forward.
This is always a difficult and delicate balancing act of recommending a fair tax rate to both our residents and our businesses to our City Council. Our housing market is up which equates to higher selling values and home equity aspects too. This is very evident in our very successful first-time home buyers’ initiatives, which has contributed to a healthy residential market.
We must also continue to build on the momentum of all the investment going on in our city by keeping a healthy business community. This allows us to expand our tax base by attracting more businesses to create more good paying jobs. This has led us to the highest bond ratings in our city’s history.
This tax rate allows us to continue to put more police and fire on our streets and in our neighborhoods, build new and renovated schools, parks, libraries, senior and community centers, and keep core services such as DPW going strong.
The chief fiscal effect of the healthy real estate market is the significant rise in the levy ceiling. As a consequence, the city is able to access the full new growth levy of $5.9M certified by DOR, in addition to the basic 2.5% increase in the levy limit. This has happened only twice since FY2010, and is a major achievement as the city continues to strengthen its fiscal position.
CAFO TJ Plante said, “The levy ceiling has inhibited the City’s ability to capture all available revenue for almost ten years. Seeing the City’s real estate values rise to the point that we are able to capture all certified new growth levy is a long-awaited milestone. This revenue is crucial for maintaining the City’s budget, which is an ongoing balancing act between meeting our financial obligations while also providing core services like public safety. Avoiding the use of one- time revenue sends the message to Wall Street that we are making the right decisions for the fiscal health of the City. In turn, maintaining our higher bond ratings gives us access to lower interest rates, allowing us to continue to do more with less.”
Chairman of the Board of Assessors Richie Allen said, “The sustained and strong improvement in house selling prices in the city is a sign of economic vitality. It is good news for many long-time homeowners who have regained equity lost due to the financial crisis of 2007-2009. The $128M of new growth value gained in the CIP categories is evidence of Springfield’s positive business climate. The recommended reduction in the CIP rate should serve to stimulate more investment and more CIP value in the future.”
The assessed values of real estate reflect physical condition as of June 30, 2019 and market value as of January 1, 2019. If a resident or business property owner wishes to dispute the assessed value of their property, they can file an abatement application through the Assessors office. Those applications are due on or before Monday, February 3. Applicants must provide reasons and evidence to support their opinion of value.
Mayor Sarno reminds the public that homeowners may be eligible for some tax relief based on their personal circumstances. Among the means for qualifying for statutory relief are citizens of seventy years of age who meet certain income and asset levels; widows and widowers of any age with assets below a certain level; veterans of at least ten percent disability or otherwise meeting other criteria; and blind persons. In Fiscal Year 2019, nearly 1,200 households received some type of statutory relief, for an aggregate savings of $644,000.
For further information, please contact Richie Allen at 787-6002.