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POLL: Do You Support a Split Tax Rate?

Do you prefer a split or single tax rate?

Tax bills are due Feb. 1.

The tax rate this year was The rate was $14 per $1,000 last year and $13.47 in the previous year.

North Reading has a , making residential and commercial tax rates the same.

Selectman Mike Prisco does not agree with the single tax rate and would prefer that the town change to a split tax rate, which would require businesses to pay more than residents.

According to Selectman Steve O'Leary, however, the most a split tax rate would save an average household is $477, but it would increase businesses taxes by approximately $6,600. 

Raising business owners' taxes would prevent them from donating to town programs, and may even steer new businesses from opening in North Reading, according to single tax rate supporters.

What do you think? Take our poll and let us know!

Michael Prisco January 06, 2012 at 05:01 AM
Mr. O'Leary quote is 1000% false. You can't just throw numbers out without explaining how they were determined. It doesn't makes any sense. You have determine what the % of shift in the tax rate is first to determine the dollar impact on the "average household" and "average CIP property owner". Please get the facts that support Mr. O'leary's quote so the public can make an honest opinion.
Joe Veno January 06, 2012 at 11:24 AM
Mike all I can say is when it comes to numbers Steve is usually correct. I think he was just giving one example. And NO I do not support a split tax rate.
Maureen Vacca January 06, 2012 at 01:21 PM
A list of all the pros & cons would really help people come to an informed opinion. I have followed this question for the last 24 years, 5 years on the FinCom & 15 on the SC. My position is it's time to switch to a split tax rate. 1. We want to encourage development along 93. The other towns along 93 (Wilm., Andover) have a split rate & its hasn't discouraged businesses. 2. I don't agree that increasing taxes to businesses will cause them to stop supporting non-profit causes in town. A smart business will find a way to pass the increase along to customers. Businesses will always keep a supportive public profile in a small nice town like NR. There are more...please keep the list of pros & cons going. Maureen Vacca
Tom Magner January 06, 2012 at 08:45 PM
Since there's no particular percentage mentioned, I'm assuming that Mr. O'Leary's quote is taken out of context, but if you have some specific numbers of your own that you'd like to share, that would be appreciated.
Joe Veno January 06, 2012 at 10:38 PM
Maureen, In you own words "A smart business will find a way to pass the increase along to customers." So where is the advantage to the homeowner? At least now we get to write it off in the taxes. We can not write off a higher cost for a product.
Steve O'Leary January 07, 2012 at 05:16 AM
Just a few points and facts to be made. The numbers attributed to me in the article were produced and presented to the Board of Selectmen by the Board of Assessors for their consideration at the Nov 21st meeting when the Board voted to establish the tax rate. They are not my numbers, they are the Assessors numbers. Those numbers are representative of the maximum allowable shift (150%) available to the Board should a majority of the members choose to adopt a split tax rate. The numbers were clearly and concisely presented and explained. Mr. Prisco, along with all of the other Board members received this information prior to the meeting. He apparently didn't read it or didn't understand the information presented, which could explain why "it doesn't make any sense" to him. The information and presentation by the Assessor made sense to the majority of the Board that evening when the Board voted to keep a single tax rate. Mr. Prisco is asking to get the facts that support the quote - I need only refer him to page 2 of the report presented by the Board of Assessors to the Board of Selectmen that evening - it's all there. Steve O'Leary
Joe Veno January 07, 2012 at 11:11 AM
i knew Steve could back these numbers up.
Michael Prisco January 07, 2012 at 02:04 PM
It would be un reasonable to do 150% split; everyone knows that so to throw those numbers aruond is a scare tactic. All I would like to see is that our CIP rate be set equal to other surrounding towns. From the list provide by Patch is a perfect example. We are 4th from the bottom. We need a shift in our CIP that puts us in the middle of the pack just like our residential rate. That is being fair to the 87.5% of the residents who are in need of some relief. But I guess I'm the only one who cares about them. So far, the survey results support my arguement.
Eileen M. January 07, 2012 at 02:45 PM
Here we go, agreeing again Joe! A split tax rate will hurt the businesses we already have and is not attractive to any businesses comming in. I realize times are difficult, but the answer is to cut unnecessary spending, not tax more.
Doug Mercurio January 07, 2012 at 03:14 PM
North Reading should not be compared to its 'neighbors' just based on proximity, but rather it should be compared to its 'peer communities', which the Town uses when analyzing most issues. Burlington is close, but the towns could not be more different. The right decision for North Reading should not be based on what Burlington has found to be right for them. As to Maureen's position, to borrow Mike's quote, "It doesn't make any sense". You are saying that since towns that have commercial bases along 93 charge a split rate that we should increase taxes on businesses as a way of attracting them to come into Town??? Businesses that are along 93 are drawn to that spot because of the access to 93. They are less sensitive to the tax obligation since the location is more important. The main reason that North Reading has not further developed Concord Street is the lack of a public sewer system, something that the neighboring towns can offer to businesses. Increasing taxes on them would only make it less desirable. I am sure that you remember when the Teradyne project was built on a lot in both Wilmington and North Reading (using Wilmington sewer). Due to Wilmington's split rate, they got the parking lot, North Reading got the actual building, and the Town's largest single taxpayer (http://www.northreadingma.gov/Pages/NreadingMA_Assessor/Top10Taxpayers).
Doug Mercurio January 07, 2012 at 03:22 PM
As to Maureen's second point, most businesses have not increased prices for several years, many have had to reduce prices (while their costs have increased) due to the difficult economic times. Raising prices is not an option, even for a 'smart business', but even if it were, the customers (the residential taxpayers, for the most part) would end up paying it anyway. As to reducing charitable contributions, there is only so much money to go around. If the expenses continue to increase and prices (and revenue) aren't able to keep pace, the businesses would have little option. Local businesses, like mine, give thousands of dollars (in cash and goods) to the schools and local charities, they donate their time, hire local residents and truly try to be part of the fabric of the community. While they pay the same tax rate as the residents (though business assessments tend to be higher per square foot), they don't receive the same benefits. Businesses have to pay private contractors to remove their trash and are not able to enroll their children in the Town's schools, which are the main way most residents benefit from their tax money. Right there the businesses, while paying the same rate, do not get the benefit of about 2/3 of the total Town budget. Bottom line is North Reading grows stronger by attracting more businesses, and expanding the tax base. Ask yourself, the next time a Teradyne comes into Town do you want to be able to tax a $56M building, or just a parking lot?
Chris January 07, 2012 at 03:48 PM
I have been a proud North Reading resident for over Sixteen Years. I am in support of the split tax rate. Currently the residents are paying for approx 87% of the revenue. This is an extremely hard costs for the residents to bear. I never would have imagined paying the amount of Real Estate taxes that I do, plus having to pay for additional services such as Trash. I have been in Real Estate for over 20 years and I can tell you firsthand, that even though the increase in taxes that would be increased on the commercial sector, it will still never eliminate the fact of demand for business. Meaning, that if there is a demand for a widget store in town, that store is still going to open. The split tax rate will not prevent it from opening. The property owner is still going to rent the space on the best numbers he/she can get based on market conditions. I too am looking to open a business in North Reading and splitting the tax rate does not scare me away from this. Because I see a certain demand in town, I am still going to pursue it. Now the town is looking for a 96M School and it will be completely unfair to pass the majority of this burden on the residents!
Chris January 07, 2012 at 04:14 PM
A Split tax rate will NOT hurt business. Do you think Stop and Shop, Wal-Mart or a small auto repair guy are going to stop doing business just becasue the tax rate was split and now they are being properly assessed? NO and the reason why is demand. If the auto repair guy has demand for his work, we will stay in business. If he does lousy work, then he is out of business. It's not because of the Tax rate
Doug Mercurio January 07, 2012 at 04:39 PM
@ Chris. You said "A split tax rate will NOT hurt business" and if somebody has a good product/service presumably that people will patronize the business no matter what the price is? While I would love to live in the overly simplistic world that this comment would make sense in, that is not reality. In addition to the quality of peoples work, there are market forces in play here. If the mechanic in Reading is approximately as good as the one 1/2 mile into North Reading, more people would go to Reading if his prices were lower. Even without the 'other mechanic', if repairs get too expensive, people say the car isn't worth fixing and get a new/used car. You can't ignore the realities of a free market economy when you say that is somebody is good they will stay in business. I know I could list off a dozen people who were 'good' but have gone out of business over the past few years. As for being 'properly assessed', I assure you, businesses are assessed properly. My commercial condo property is assessed at $178.50 in value PER SQUARE FOOT. That makes me think the Assessor is doing their job and not cutting breaks to business owners.
Joe Veno January 07, 2012 at 07:48 PM
Chris, Chris, The Teradyne project was built on a lot in both Wilmington and North Reading due to Wilmington's split rate, they got the parking lot, North Reading got the actual building, A small business may not look at it closely but a large business will in my opinion.
Michael Prisco January 08, 2012 at 02:37 AM
Just an FYI. It makes no sense when 2011 was another bad economy but the average home assessed value in NR went from $409,000 to over $450,000. How much did the CIP increase? None! Doug. For every example you provide on the financial challenges businesses are facing each day, I can give you 10x more examples on how residents in this town are facing adversity each day. We are in this together but when you have only 87.5%(NR Residents) of the town see their assessed value increase 10% in a down economy is unfair. As you know, I own 3 businesses so I deal with those same challenges you describe everyday but I also know the pain isn't balanced. Last, the Town of Reading was faced with the same debate last year. They elected not to do a split tax rate. Instead, they increased the commercial property values by 18% because of the same unbalance we face here in NR. Just saying......
Michael Prisco January 08, 2012 at 02:40 AM
Just an FYI. It makes no sense when 2011 was another bad economy but the average home assessed value in NR went from $409,000 to over $450,000. How much did the CIP increase? None! Doug. For every example you provide on the financial challenges businesses are facing each day, I can give you 10x more examples on how residents in this town are facing adversity each day. We are in this together but when you have only 87.5%(NR Residents) of the town see their assessed value increase 10% in a down economy is unfair. As you know, I own 3 businesses so I deal with those same challenges you describe everyday but I also know the pain isn't balanced. Last, the Town of Reading was faced with the same debate last year. They elected not to do a split tax rate. Instead, they increased the commercial property values by 18% because of the same unbalance we face here in NR. Just saying......
Doug Mercurio January 08, 2012 at 03:17 AM
Mike, 'financial challenges' is not the issue. I made my point only to counter Chris who thinks that businesses can increase pricing at will without any impact on their business. I am sure you agree that is a false premise. That being said, shifting a burden from one group to another is not a reasonable response when both are struggling. As to your point about the increased assessments, I agree that the increased average assessment going up 10% in this market doesn't make sense to me, however, it may have been that they were under assessed prior to this year. You asked a number of challenging questions of the Assessor and she replied to each and every one. If you have continuing questions about how she determined there was such a large increase I have no doubt that she would gladly respond to your inquiry, but that is a separate issue than splitting a rate. Also, Reading elected to maintain a single rate as they felt it made sense and was the 'fair' thing to do. They did not decide to increase commercial property values by 18%, they tightened up assessments and the market dictated that the assessments went up. I would imagine that Reading followed the same state mandated guidelines that N.R. did, the Selectmen can not just dictate an across the board assessment increase on CIP property. In addition to real estate, Comm. taxpayers are taxed on the contents of the property (computers, desks, copiers, etc.) as well, this is not the case for residential owners.
Michael Prisco January 08, 2012 at 03:43 AM
I spoke directly with Pete the Town Manager and he was very detailed on what Reading did. They were faced with the same debate we are having now, except they found away to make it fair for the entire community.
Doug Mercurio January 08, 2012 at 03:50 AM
I don't know how it would be possible for Pete to do that, unless they were under assessed to begin with. I dont think that is the case in North Reading anyway and I wouldnt think that you would propose intentionally over assessing CIP property...?
Joe Veno January 08, 2012 at 10:53 AM
Doug good point I would like to know how Reading did it also because I am sure they were not under assessed. Mike could you speak to Peter in Reading again and get the answer to that question?
Carole McGillicuddy January 10, 2012 at 02:49 AM
i would support a dual tax rate if we offeredd town sewer services to the businesses...we can't currently offer support to businesses that are large enough to absorb the increased tax rate unless we can also offer the infrastructure opportunities
Chris January 10, 2012 at 01:59 PM
That is the ol' chicken and the egg syndrome. In order to get sewer in the town, funds are necessary to start the infrastructure work, then tie in fees will be used to pay for the balance and service the system. Splitting the tax rate is a the first major step in moving towards being able to have town sewer, a new school, a ladder fire truck that goes taller than any building we have in NR..oh wait we already have that expensive piece of equipment...woops that got a way from me
Billie January 10, 2012 at 06:05 PM
Is the problem with the egg? I dont know the CIP rate or the amount terridyne pays for its parking lot, but I do know with the current situation my property taxes will double before I can say I have lived here for 14 years. Is there ever going to be a patch report that local taxes will decrease since the police department construction or the Batch construction loans have been paid off? As far as sewer it will eventually be done and when they realize taxes cant handle the burden it will just be added to the water bill! watch what you wish for.

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