Finance Committee - 3/21/2018 Page 15
Massachusetts there is a different law, and each community sets separate rates for residential and
commercial. So commercial is set, in most communities, maybe all, | don’t know. John lives in Tyngsboro.
John Griffin
Tyngsboro has a flat rate, has a one tax rate, but neighboring communities that have a commercial base it
could be up to 175% of a single rate.
Mayor Donchess
So you've got one rate say $30 for commercial $20 for residential. That’s common in Massachusetts but that’s
against the law in New Hampshire. | mean everybody gets taxed the same. It could be worse in this respect,
one big revaluation that took place was in the 1992 time frame and this five year rule had not yet been enacted
at that point but we still had to do the revaluation because it had been quite a period of time. Equalization
ratios were down around 40% and the problem was that right before that there had been a major real estate
crash which brought commercial values down more than residential. So in kind of a reverse way because
commercial had fallen more, everything fell but commercials fell more so it worked a reallocation toward
residential but at a time when people’s properties were falling in value. Not going up. So at least there is this
silver lining, definitely we’d rather not undertake a revaluation when see the potential consequences. But at
least there is the silver lining that people’s homes are worth more than they were before. A $250,000.00 house
is now worth $300,0000 and something. A $200,000.00 is worth $250,000.00 or probably more and that’s the
silver lining. But that does not help people in the short term necessarily.
Alderman Laws
Are there things that we could do like for instance the cut off is four units in a multi-family to make it
commercial, is that a state law or is there something we could do to make that three units? But is there is
something we can do?
Mayor Donchess
| think that’s just for the purpose of analysis. Each category of property is evaluated differently. That’s just for
analysis. The actual cuts they will take are much finer than that. For example, they are going to look
separately at ranch homes from gambrels, they are going to look separately at gambrels from raised ranches,
separately from colonials. Even within single family homes, there are different types of homes that are going up
differently. It’s not just “how much is residential’ — this is just for the purpose for analysis to kind of show you
what the trends are. When they do these assessments, they will be looking at very small categories of
properties. So they will be looking at 2 and 3 family residences, separately from single family residences,
separately from 10 units. And within commercial and industrial there are shopping centers, there are regional
malls, strip malls, and the areas of the City are also separate. There might be areas of the City where houses
went up more than others. That’s why we are trying to get someone who can take a comprehensive look, they
are going to thoroughly go through all these categories.
Alderman O’Brien
| would just briefly like to say | really don’t like this, but it’s the way it is, it’s the State law. Every five years they
re-evaluate the property. | just hope the good citizens realize that we are right now into a seller’s type of
market and we have been through a little of time. If you were to sell your particular property you are going to
get on the high end. If you are going to buy another property you are buying at the high end, you don’t really
win or lose in that type of real estate environment. Those of us that stay in our homes, enjoy looking at the
property value going up, but the down side is when they come up with the revaluation. We are going to get hit
with that little bit more. This is not anything we can solve here in the horseshoe. This came down through the
State and it comes down with the marketability, the free market, what real estate really is worth. You ride
these types of tides and stuff like that that goes on.
