By DAN TOMASELLO
LYNNFIELD — The Select Board approved a shift in the town’s tax classification in a 2-0 vote on Dec. 7.
The 1.50 shift approved by the Select Board means the tax rate is estimated to be $11.31 per thousand dollar valuation for residential property for fiscal year 2023, which represents a decrease of 68 cents from FY22’s tax rate of $11.99 per thousand evaluation. The commercial, industrial and personal property (CIP) tax rate is estimated to be $18.17 per thousand dollar valuation, which is $1.15 less than FY22’s rate of $19.32.
The Department of Revenue is required to approve the tax rates.
“These could change a penny or two during the Department of Revenue’s approval process,” said Assessing Manager Victor Santaniello.
Santaniello recalled that Chapter 200 of Massachusetts General Laws allows communities to shift “more of the tax burden onto the CIP classes of properties.”
“Previously, Lynnfield has used this tax shift function to better equalize any tax increase between classes,” said Santaniello. “However, Lynnfield is currently at its maximum shift capacity.”
While the estimated tax rates will be decreasing in FY23, residential and commercial property values have increased. Santaniello noted that the average single-family home value for FY23 is $899,600, which is higher than FY22’s average of $818,833.
“The estimated tax bill will be $10,174,” said Santaniello.
Santaniello said using the 1.50 shift would enable residential property owners to save an estimated $720. If the Select Board decided against using the 1.50 shift, he said the average property tax bill would have been $10,894.
“By adopting the maximum allowable shift, the Select Board will save the average residential taxpayer approximately $720,” said Santaniello. “The average single-family tax bill from FY22 to FY23 went up approximately $356 or 3.6 percent.”
Santaniello said the average CIP tax bill for FY23 is estimated to be $22,276. He said the average commercial property value in town for FY23 is $1,226,000, and the median commercial value is $513,200.
“The median commercial value is reflective of smaller mom-and-pop stores,” said Santaniello.
Santaniello said the total FY23 debt exclusion amount included on property tax bills totals $3,106,911.
“It adds 68 cents to the residential tax rate and $1.09 to the CIP tax rate,” said Santaniello. “It adds $612 to the average single-family tax bill, adds $1,336 to the average commercial tax bill and $559 to the median commercial tax bill.”
In response to a question from Select Board member Dick Dalton, Santaniello said the $63.5 million public safety buildings and Town Hall project that voters approved during the Dec. 6 Special Town Election will not be factored into the FY23 tax rate.
“It will be factored into the rates in subsequent years,” said Santaniello. “It has no bearing on this tax classification for FY23.”
Santaniello recalled that state law allows municipalities to give Open Space Discounts to “land which is not otherwise classified and which is not taxable under provisions of Chapters 61A or 61B, or taxable under a permanent conservation restriction.”
“A maximum exemption of 25 percent may be adopted,” said Santaniello. “However, the town has never voted for a discount for open space since no properties have been identified which fulfill this section.”
Santaniello also noted that the town has never provided Residential Exemptions.
“A Residential Exemption of up to 35 percent of the average residential value could be granted,” said Santaniello. “The Residential Exemption has only been adopted by a handful of communities, including Boston, Cambridge, Chelsea, Brookline and Somerville. The residential tax rate would rise substantially before any discount. Approximately 30 percent of the homes in Lynnfield would shoulder the burden, and most homes in Lynnfield are owner-occupied and are not investor-owned.”
Santaniello noted that the Small Commercial Exemption is an exemption that provides “up to 10 percent of the property valuation for commercial properties.”
“Eligible businesses cannot have more than 10 employees as certified by the Department of Employment and Training,” said Santaniello. “The building value cannot exceed $1 million. One business in a building could not qualify unless every other business qualified. The exemption goes to the property owner, and the Assessing Department is unaware of any commercial property that would benefit substantially from this form of tax relief.”
Dalton noted that the town cannot exceed the maximum 1.50 shift factor.
Santaniello said Dalton’s assessment was correct.
“It’s based on what was historically the lowest residential factor,” said Santaniello. “You cannot go below that threshold, so it limits your capacity to shift currently at 1.50.”
There were no residents who spoke during the tax classification public hearing, and the Select Board closed it.
Dalton and Select Board member Joe Connell voted to approve the 1.50 shift for FY23. Select Board Chairman Phil Crawford did not attend the meeting because he was out of state for his daughter’s wedding.
The Select Board also voted not to adopt the Residential, Small Commercial and Open Space Exemptions.
“I want to thank Victor for giving an excellent presentation,” said Dalton. “You made it very clear to us and the public.”