GREAT BARRINGTON — Town officials are exploring whether to implement a property tax exemption that could help make the town more affordable for residents who own the least expensive homes.
At a joint meeting Monday, the Select Board and Finance Committee voted unanimously to explore hiring a consultant to evaluate whether to impose an exemption that shifts the tax burden away from homes with lower values and increases it for higher-valued property.
Town Manager Mark Pruhenski will return to the boards with an estimate for such a consultant. And ultimately, voters would decide at annual town meeting in May.
The exemption would reduce taxes based on a property's assessed value, but would also have to make up the difference by taxing the higher-valued properties more. The break-even point for the graduated increase or decrease would be the median assessed value of homes in town, which is currently $398,754, according to town assessor Shaun McHugh.
This could ease the property tax burden of residents who struggle to pay their tax bills on local incomes in a town in which the tax rate is high relative to the median household income of residents.
But the municipality's revenue still has to come from somewhere, so the exemption would force those with higher-valued properties to pay a higher tax. It would also shift more of the burden onto second-home owners, owners of vacant land and those who own but do not live in apartment buildings or multifamily properties.
This had several town residents armed with reasons not to implement the exemption.
"When people decide where to build a house, they're not going to want to do it here," said resident Ron Banks, noting that the town is surrounded by towns with lower tax rates. Banks also said that fallout could include a hit to business owners who are struggling to keep prices in check for locals. "There's a horrible thing called Amazon," he said, referring to the online retail goliath that has helped lead to the decline of local brick-and-mortar businesses. "I would just be really careful."
Across the state, 13 communities have instituted this local option exemption, the amount of which can't exceed 35 percent of the average assessed value. In Great Barrington, that upper limit would be a reduction of $139,564 on the median value, McHugh said.
And the exemption is found mostly in the Boston area, because of its large apartment building stock, as well as on Cape Cod, with its many second homes.
McHugh gave the board information from Provincetown, which implemented the exemption for full-time residents, including renters. Cape officials have felt some blowback from second-home owners who said it is unfair to pay a higher tax without having a say in spending.
"Why haven't more towns done it?" said resident Vivian Orlowski, who told the boards that an exemption works best in the Boston area or on Cape Cod because of that area's more "robust tax base." Without this in Great Barrington, the elderly, the middle class and businesses would take a tax hit that would trickle down and harm the economy in other ways, she said. She also noted that six towns including Concord and Lexington studied the exemption and nixed the idea.
The town's 2020 tax rate is $15.75 per $1,000 in assessed value, more than the statewide median of $15.27 per $1,000. In 2017, the median household income was pegged at $48,000, according to the U.S. Census Bureau's five-year estimate.
In 2015, former Finance Committee member Michael Wise, now the town moderator, took a deep dive into the data, and surfaced with the opinion that an exemption, possibly coupled with a split tax rate, could help those struggling to keep up with property tax bills.
In his report, which came on the heels of an outcry about high taxes amid plans to build a new high school, he said that most homeowners in Great Barrington would benefit, with the highest concentration of tax relief found in Housatonic and nearby Risingdale — these neighborhoods could see as much as a 20 percent cut. The median home value in this area that year was $213,000.
"For over 70 percent of all residential parcels in town, and over 80 percent of the "eligible" parcels, the tax bill would be lower or unchanged," Wise wrote. "For over 40 percent of the eligible parcels, adopting a 20 percent residential exemption would cut the tax bill by 16 percent or more."
As to the exemption's pitfalls, Wise, a former Federal Trade Commission lawyer, speaks in terms of amplification, rather than "black and white" certainty.
"'How big is the effect?' is the more subtle argument," he said. "People are already saying they'll buy in Alford," he added, of those who say people will choose to buy or build in surrounding low-tax towns. "The question is whether [an exemption] would have a meaningful effect on this dynamic. People are still buying in Great Barrington."
Wise said he thinks this progressive tax tool could help, but understands why it was shot down five years ago.
"Inertia," Wise said. "It's a change that can't be sold as, `Everyone will be better off.'"
Heather Bellow can be reached at email@example.com or on Twitter @BE_hbellow and 413-329-6871.