Why will our property tax rates remain well above average with average (or below average) school spending?  Many towns and cities have school spending at or above the average for the state, but have much lower tax rates.

Property tax rates are the result of two factors:

  • How much money you need to raise
  • The total assessed value of the property to be taxed

Addressing the denominator first:  the total assessed property values in Hamilton and Wenham are not high compared to our population.  Our rural nature, mixed housing stock, high open space and nonprofit land keep this value low. Compared to some other communities, Hamilton and Wenham have:

  • Insignificant commercial tax base
  • No oceanfront/super-luxury homes
  • High untaxed/low taxed non-profit property (e.g., Gordon College, Gordon-Conwell Seminary, Trustees of Reservations, Essex County Greenbelt) agricultural land and government-owned open space (Town parks and Bradley Palmer State Park)

Also, in recent years, the value of taxable property in Hamilton and Wenham has been shrinking.  For example, Hamilton’s FY 2010 equalized valuation (as reported by the MA Department of Revenue) is about $1.5B, while two years earlier it was $1.64B.  This reduction in property values will cause the tax rate to increase even without spending increases.

The amount we need to raise is relatively high in comparison the assessed values:

  • Typical population of full time residents, including school children
  • Our small town sizes precludes economies of scale in all services (regionalization of Hamilton and Wenham services helps where we do it–for example, could save $500K by merging police alone—but it is not enough)
  • We receive very low support from the state for HWRSD (See “Massachusetts Requires Hamilton and Wenham to Pay for 80% of the State Mandated Funding for HWRSD”)

Unlike towns on Cape Cod or the islands, we have mostly a year-round population with resident children to educate.  While we have had a regional school district since 1959, even combined the towns are small:  note that the aggregate assessed values of Hamilton and Wenham are still $200M less than Ipswich.

 

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