TAX BILL REVIEW 1/10/2022
PREPARED BY THOM BERUBE
The following is an effort to offer insight into the processes used to calculate PROPERTY TAX BILLS all of which are governed by State Law.
Based upon some of the calls we have received and some comments on social media there may be some misconceptions that we can hopefully clarify and, at a minimum, take some of the mystery out of how these calculations take place.
Fundamentally, TAX BILL calculation is a simple math equation where the amount of tax revenue to be raised (the levy) is divided by the total value of real estate the result being the TAX RATE which is expressed in $$/1000 of value and then applied to individual properties to determine the “TAX BILL” which represents that properties’ share and contribution to the operations of the town. This is known as “Ad Valorem” taxation which simply means that a property owners “share” is determined by their property value. In Georgetown, over 90% of the property is RESIDENTIAL and thus bears the lion share of property taxes.
EXAMPLE: Using rounded numbers for clarity, if the amount to be raised (LEVY) is $23,000,000 and the TOTAL PROPERTY VALUE is $1,600,000,000…
23,000,000 / (1,600,000,000/1000) = $14.37 per thousand of value
A $500,000 property (500 x 14.37) would have an annual Property Tax of $7,185.
IT IS VERY IMPORTANT TO NOTE THAT THE TWO INDIVIDUAL COMPONENTS OF THIS EQUATION (1. TAX LEVY AND 2. PROPERTY VALUE) ARE CALCULATED INDEPENDENTLY, ONE HAVING NO INFLUENCE ON THE OTHER. THEIR INDIVIDUAL AMOUNTS ONLY AFFECT THE TAX RATE.
Any individual analysis of these separate components should recognize that:
1. Since 1982; a.) the tax levy cannot exceed 2-1/2% of total value and b.) the tax levy cannot increase by more than 2-1/2% in each succeeding year. This amount is increased by additional revenue resulting from new property (construction etc.). It can only be further increased by VOTER approval via ballot.
2. No tax levy funds can be spent without the APPROVAL OF TOWN MEETING!
3. Per state law, residential property values MUST be adjusted annually to reflect 100% fair market value as determined by the ACTUAL SALES of properties. Because all types and styles of property do not necessarily sell within a given time frame, and the appreciation/depreciation varies with time, values of differing styles can and do change at differing rates and frequently in different years.
4. Both the levy and property values are independently and individually reviewed and certified by the Massachusetts Department of Revenue prior to their certifying our annual tax rate. Their certification is required before any property tax revenue can be raised to ensure that the town is not exceeding the Levy Limit and that property values are reflective of Fair Market Value.
TAX LEVY- the tax levy represents approximately 2/3 of the town’s $33M budget. The balance is a combination of Motor Vehicle Excise, various fees and State Aid for a variety of purposes. From a budgeting and spending perspective, there is a common perception that the town’s various departments request funds necessary to perform their responsibilities and those are approved and subsequently determine HOW MUCH the town spends regardless of how much they total. In fact, because of the limited levy increase, we rarely, if ever, have enough funds available to do all the things we should be doing so the budgeting process is a months-long exercise by the volunteer Finance and Advisory Board to shave our annual spending down to fit under the limited available revenue before submitting it to Town Meeting for approval. Quite literally, the town’s finances are somewhat akin to the proverbial family living paycheck to paycheck. Virtually all available funds get spent and the 2-1/2% levy increase generally does not come close to covering the increases to overhead, insurance, payroll etc.
PROPERTY VALUES –Residential property values are determined by collecting and analyzing qualified sales of individual properties during a given period of time and adjusting the values of those and similar properties to reflect 100% Fair Market Value. In an ideal scenario, every house would sell during the time period yielding a true market value for all properties. As this is not possible, the aforementioned methodology is used. In order to maximize accuracy, a comprehensive database of all properties is maintained to facilitate precise comparisons. Recent dramatic increases in the SALES PRICES of properties in Georgetown has resulted in dramatic increases to property values and in many cases a shift in values from some styles to others. It has also resulted in a 12% reduction of the TAX RATE.
OPERATIONAL GUIDELINES NOTICE
September 28, 2021
In view of the re-opening of Town Hall to the public in June of 2021, the Board of Assessors is striving to re-establish as close to a normal level of service as possible during our normal office hours of M-Th 8am-4pm.
To that end, the board reiterates that most public business can be conducted with the department online as has been the case for some time. Please visit our webpage at georgetownma.gov/assessors-office to review the available services. Office staff will also attempt to provide information and answer questions by email or phone at the above number, if necessary.
Information, instructions and forms can be accessed from our webpage at georgetownma.gov/assessors-office.
Submissions and questions can be made to the office contacts posted on the page, to the drop box at the rear of Town Hall or by regular mail, if necessary.
Please note that Motor Vehicle Excise Abatement applications require supporting documentation that must be submitted in order for the application to be processed so make certain that copies of appropriate documents are included as detailed in the instructions.
As circumstances evolve, we will update information and capabilities to provide the utmost level of service.
We appreciate your understanding and cooperation. Please stay safe and healthy.
Director of Assessing
For the Board of Assessors,
David Bogdan, Chmn
Arthur “Red” MacDonald
PLEASE REVIEW "MESSAGE FROM ASSESSORS" IN LEFT MENU
The Assessors are required by Massachusetts Law to list and value all real and personal property. These valuations are subject to ad valorem (value-based) taxation. Assessed values in Massachusetts are based on “full and fair cash value’, or 100% percent of fair market value.
They are required to market-adjust and submit these values to the State Department of Revenue annually for certification that they are within acceptable parameters of the market. The Assessors review sales and the market every year and thereby reassess values each year. This is done so that the taxpayer pays his or her fair share of the cost of local government, in proportion to the value of the property, on a yearly basis. For the fiscal year 2020 the Assessors will again be subject to a complete review of data collection, inventory maintenance, sales analysis and valuation accuracy by the Department of Revenue, a process that will be repeated every 5 years henceforth.
The Assessor’s Office commits Motor Vehicle excise tax, administers farming, recreational and foresting programs in the form of Chapter land, processes exemptions and abatements, maintains a parcel based mapping system for assessment purposes and maintains the computer based property records and inventory, for all land, buildings and business within the Town of Georgetown.
Assessors do not raise or lower taxes. The Assessors do not make the laws, which effect property owners. The Massachusetts Constitution requires that direct taxes on persons be proportionately and reasonably imposed. In addition, the Declaration or rights, Part I, Article 10, requires each individual to bear his fair share of the public expenses.
The Assessors are required to annually assess taxes in the amount sufficient to cover the State and Local appropriations chargeable to the Town. These taxes assessed will include State and County assessments which have been duly certified to the Board and local appropriations approved by voters at Town Meeting(s) that fall within the limits of Proposition 2-1/2.
The Assessor’s primary responsibility is to find the “full and fair cash value” of your property so that you pay only your fair share of taxes. The tax rate is determined by dividing the amount approved to provide for services, such as schools, roads, fire, and law enforcement, etc by the total value of all real and personal property.
Fiscal Year 2022 (July 1, 2021 - June 30, 2022) Approved Tax Rate = $14.08 per $1,000.00 and is applied to property values as of Jan, 1, 2021. 3rd and 4th quarter actual tax bills will be issued by the Tax Collector prior to Jan. 1st, 2022