RICHMOND — There is no way to sugarcoat it: Residents who don’t closely follow town board meetings might have been startled when they opened their tax bills this month.
Responding to concerns raised by some townspeople, the tax man returned to the Select Board last week to explain why the owners of average-priced houses, currently pegged at $448,000, are seeing a typical increase of $544, just over 10 percent, on their real estate bills for the current fiscal year.
The average townwide, single-family property tax for fiscal 2022 is $5,710, up from $5,166 last year.
With about 50 residents attending in person at Town Hall or tuning in via Zoom, Regional Assessor Harald Scheid, of Leominster-based Regional Resource Group, put it simply: State law requires assessors to estimate the full and fair market value, or close to it, of all properties each year.
He has been principal assessor in Richmond for nearly five years, and he performs the same task for seven other Berkshire communities — Becket, Dalton, Egremont, Hinsdale, Lanesborough, Otis and West Stockbridge, where similar dynamics have played out because of rising home sale prices.
Combined with unanticipated, additional town spending beyond the $7,660,000 budget approved by Richmond town meeting voters in May, the surge in housing prices sparked the hefty tax increase for most property owners. The town’s tax levy — that is, the total amount to be raised and spent — came to nearly $6 million, up by $533,000 from the previous year.
Scheid acknowledged “a bit of public concern and even upset” about the property valuations, citing the “sharp increase” in assessed property values. He displayed a chart listing several dozen home sales in Richmond during the 2020 calendar year, the base for the assessors’ quarterly 2021-22 tax bills — the first two are preliminary estimates.
“What we’re dealing with is a really unprecedented market,” he said. “With COVID, there has been quite a surge of people, predominantly from the big city further south, looking to buy real estate in our little corner of Massachusetts. With that stepped-up demand and very short supply, people were just very aggressively looking to buy property in Richmond and some of the other communities.”
“It shouldn’t be a surprise to anyone that we have seen a marked uptick in the market, with really extraordinary sales prices being paid for properties valued significantly lower for many years running,” Scheid said. He pointed to a home that sold for $477,000 in 2020, far above its previous assessed value of $366,000. Now, the assessors have revised the value of that home significantly higher, though not all the way to its recent selling price.
The goal is “to lift values across town to get them to sync up with these new market dynamics,” he said. The state Department of Revenue compels assessors to respond to market sales by adjusting values, not just for the sold properties, but across the board, Scheid noted.
The result is that assessed values townwide have been increased from 82 percent up to 95 to 99 percent of actual market prices, Scheid told the residents and selectmen.
The assessors have to “look for patterns of over- and under-assessment,” he added. “We can’t just uniformly increase values; we’re required to look at building style, age of homes, the quality of construction, location, all of those factors when we slice and dice the prior values … to bring about greater uniformity in assessments.” Amenities like garages, swimming pools, tennis courts and finished basements also are considered.
Of the town’s 746 single-family homes, the value of 438 properties increased by up to 5 percent, Scheid pointed out, while 206 homes gained 5 to 10 percent in value, and the rest saw “some very sizable increases.” As he put it, “we bit the bullet” to try to upgrade the value of properties that had been “significantly undervalued, in our estimate.”
Residents can seek an adjustment of their property taxes by filing an abatement application with the assessors by Feb. 1, the due date for third-quarter payments. The Board of Assessors has 90 days to respond.
Scheid cautioned that “we have another calendar year to contend with,” since 2021 sales will figure into the next annual set of property valuations used to formulate 2022-23 tax bills. “We’ll probably see some strong increases in values.”
“We should be forewarning residents of that fact,” Select Board member Roger Manzolini suggested.
“Some significant drivers increased the amount of money we needed to raise and appropriate this year,” he noted. “All of these monies were approved at the annual town meeting.”
He highlighted some of the major increases, such as the $330,000 hike in the Richmond Consolidated School budget. More than half of that, $175,000, was caused by state-mandated special education expenses for resident students that the school and the town can’t control.
The municipal building project for a new Town Hall and library was another significant expense, since a $340,000 bond is due, Manzolini added, which partially was offset by a $150,000 annual bond cancellation now that the school expansion and renovation project was paid off after 20 years. Thus, the net effect of the municipal building bond works out to $190,000.
Also, state aid fell $98,000 short of estimates originally provided by Boston, Manzolini pointed out. Other town government increases came to $40,000. Additional money to be raised and spent, approved by town meeting voters, came to $658,000 — 50 percent attributed to increased school costs, with 29 percent caused by the new building, 15 percent by the state-aid shortfall and 6 percent due to town government expenses, he told The Eagle on Monday.