The Chelsea City Council took every measure in protecting homeowners with rising tax bills in setting the tax rate on Monday night at its regular meeting – but did so with a warning that next year those tools won’t be in the toolbox if people are still struggling with the fallout from the pandemic.
The Council applied the maximum commercial shift of 175 percent to commercial property and away from residential property in an 11-0 vote, a move allowed by law and applied virtually every year.
That said, Council President Roy Avellaneda reminded everyone that this usual shift does create a hardship for small business owners – particularly this year when stores and commercial offices are sitting vacant at higher rates.
“I want us to all be cognizant this shift does unfairly burden the small commercial owners,” he said. “I think of Madelyn Garcia who bought a commercial building in Cary Square and has $20,000 worth of taxes. To overcome that tax burden means you’ll need to make 10 times that amount in revenue. She has to get $200,000 in revenue to get that. It’s easy to shift to the commercial side, but we have to think about being fair to the small guy as well as the homeowner.”
As well, the Council voted 11-0 to set the owner-occupant residential tax exemption at 35 percent – a rise of five percent and higher than the City had planned for. The City had been carefully rolling out that tax savings over five years and was expected to go to 32 percent this year, and 35 percent next year.
However, City Manager Tom Ambrosino said he recommended the 35 percent owner-occupant fee so that residents could have maximum savings during this difficult time in Chelsea.
“The maximum amount we can give is 35 percent and over the time I’ve been on the Council we’ve upped it consistently,” said Councilor Damali Vidot. “However, after we apply this one there is no more room left to give any higher tax breaks. I want to urge this administration to do what it can. We’re carrying burdens right now that, quite frankly, no municipality should have to carry. At this point, we’ve exhausted all the tools in the toolbox.”
That program erases 35 percent of the value of a residential property that is owner occupied, up to a three-family home. That results in substantial savings on the tax bill for those homeowners occupying their homes in Chelsea.
That 35 percent, as Vidot said, is the maximum amount allowed by state law, a law that was changed in Chelsea’s favor some years ago by Avellaneda. He said that effort was a second go-around for the savings, and he had tried previously with former Councilor Stan Troisi and they were rejected at the State House.
He said it was a “special moment” to be able to have that savings to give, and thanked Troisi for getting the ball rolling so many years ago
With all savings applied and shifted, the residential tax rate was set at $13.62 per $1,000 of value. The commercial rate came in at $26.65.
The largest tax increase is expected to hit two-family and three-family homeowners this year.
The Council has been submitted a request from Ambrosino to transfer $750,000 into the new Homeowner Stabilization Fund to help those with increasing residential taxes to get assistance. That program would likely roll out in January, and the Council is set to vote on the transfer at the Dec. 14 meeting. They are expected to approve it.
•GETTING THE VALUES RIGHT
One of the main issues on Monday night, and back to last year, was the questions raised by Avellaneda, Vidot and Councilor Giovanni Recupero about the valuations of multi-unit buildings of eight units or more.
Avellaneda has consistently said those larger buildings are undervalued in his estimation, and Vidot and Recupero have agreed with that.
“Those values are not up to the proper value in my opinion compared to how well they do on smaller properties,” he said. “We have to no disagreement with how they value singles, two-families, condos and three-families. But we feel there is a lot of catching up to do with the others. That under-valuation puts an unfair burden on the smaller residential properties.”
Vidot also stressed that she would like the Assessor’s Department to look to an outside consultant or find a way to address these values.
“We have to make sure these bigger commercial buildings are being held accountable and paying their fair share so the burden is not on our residential or small business owners,” she said. “We don’t have any more to give.”
Avellaneda said he would like to see a consultant brought on this year, particularly after Ambrosino announces the hiring of a new permanent City Assessor in the coming months.
“The clock starts ticking today for the Assessor’s to do a better job with these identified properties in that sector so we don’t have this problem next year,” he said.
Ambrosino said they would be paying closer attention next year to those values.
“I think that will be the focus of attention in the next year,” he said. “We’re in the process of naming a new Chair of the Board of Assessors. That will be the top priority for that new person. When we present a tax rate next November I hope we can say with confidence those values are accurate.”