NORTH ADAMS — Though the average homeowner’s tax bill will increase next year by about $335, commercial property owners will pay more than double the tax rate of residential owners.
That has been the crux of a debate over taxes in the city. The City Council voted narrowly — five votes to four — on Tuesday night to set the tax shift for the fiscal year, making the residential property tax rate $17.67 per $1,000 of assessed value and the commercial rate $37.59. Currently, the residential rate is $18.53 per $1,000 of assessed value while the commercial rate is $39.26.
The decision came after debates stretching multiple meetings about how to split the tax burden between those who own residential and commercial property. North Adams has two tax rates, one for residential and open space property and one for commercial, industrial and personal property.
Residential property values increased by more than $85 million in the city in the last year, according the city assessor’s office, pushing homeowner tax bills up. The average commercial property value stayed relatively level over the past year.
Earlier this month, Mayor Jennifer Macksey proposed a tax shift that would have made, compared to what the council chose Tuesday, the tax rate slightly higher for business and lower for homeowners, in effort to minimize the impact on residential bills amid rising home values. But there was concern that commercial rates that are more than double residential rates could hurt economic development, and the council voted to discuss the proposal further at a Finance Committee meeting last week before it came back to the City Council for a vote.
Under all the options the council discussed, the average residential tax bill would rise while the average commercial one would fall, Councilor Marie Harpin pointed out amid debate. With Macksey’s proposal, the average residential bill would see a smaller hike.
The issue, Councilor Keith Bona said, is there’s still a large gap between commercial and residential rates. “It’s still absurdly far apart,” he said.
After Holyoke and Pittsfield, North Adams has the highest commercial tax rate in the state, according to state data. Some business owners told the council that disparity is the problem.
“We’re the third in the state, and I think that’s embarrassing,” Rye Howard, a city resident and owner of the Bear and Bee Bookshop, said at the council’s Finance Committee meeting last week. “I think it sends a really negative message about our willingness to support small businesses and to encourage new small business.”
The city needs to look more deeply at its tax rates, business owner Jess Sweeney told the Council on Tuesday. “The split tax rate in my opinion is not going to help us move forward in terms of our economic development,” she said.
One resident spoke at Tuesday’s meeting to defend residents and small businesses. “I don’t mind giving a break to mom and pop stores but we’re also giving it to the bigger commercial stores like Walmart,” said Paul Moriarty, speaking in favor of Macksey’s original proposal. “We’re doing it all on the back of the residents.”