PITTSFIELD — A strong housing market means that Pittsfield has more financial liquidity and a brighter future, according to Mayor Linda Tyer.
But, the rise in assessed property values powering that market also might mean a larger tax bill — an average increase of about 5 percent — for many city residents.
“We think we’re in a really strong position, not only for this year, but in the years going forward,” Tyer said. “I guess we could say that this is a COVID-19 silver lining that we have had, in our city, a lot of demand for single-family homes and not a lot of supply.”
The mayor Tuesday formally will submit to the City Council the proposed tax rate for the 2022 financial year, which started July 1. This year, Tyer’s administration is trying to raise about $94.7 million in property taxes — about $2.9 million more than last financial year.
If approved by the council, the residential tax rate would decline from $19.25 to $18.56 per $1,000 in assessed value, and the commercial tax rate would drop from $39.99 to $39.90.
So, why are tax rates going down, even though the city’s levy is going up? Because property values on residential properties have seen significant increases in their valuation over the past year.
From fiscal 2021 to 2022, the average single-family home increased in value from $203,901 to about $222,073 — a change of about 9 percent. Under the proposed tax rate, an owner of an average single-family home would see an annual tax bill that is about $197 higher than last year’s.
“This is good news, that people now have equity in their homes,” Paula King, Pittsfield’s chief assessor, said at a news conference Monday.
Single-family homes in Pittsfield account for about 59 percent of all taxable properties in the city, but this year they were responsible for about 81 percent of the overall $254.6 million change in assessed property values in the city.
Long story short: Higher assessed values on single-family homes mean City Hall is able to get more from the tax levy this year than in previous years.
“For many people in Pittsfield, their home is their greatest asset,” Tyer said. “Having homes with values is as important for individual financial stability just as much as it is for community stability.”
She said that the growth in residential property values means that, for the first time since 2015, the city no longer is constrained by its levy ceiling — the maximum amount a city can raise in property taxes in a given year.
Tyer is proposing that the city levy about $5.3 million less than its maximum potential levy — a move that she and city Finance Director Matt Kerwood said makes the city more attractive in the bond market and gives the city liquidity.
“By keeping that levy ceiling above what our levy limit would be, we’re continuing to build in a positive way,” Kerwood said.
This piece has been updated to reflect that the tax rate is based on $1,000 in assessed value.