City of Haverhill FY 2019 Classification Hearing Tuesday, November 13, 2018 Presented by the Haverhill Board of Assessors

Tax Classification FY 2019 The purpose of this public hearing is to determine how the Tax Levy (Pie) is divided Classification does not change the size of the Pie but it can change the percentage share of the Pie In other words, the amount of money the City can raise through taxes remains a constant regardless of the percentage shift of the tax burden between the classes

State Mandated Interim Year Update of All Property Values Every Non Revaluation year the Commonwealth requires all municipalities to perform a complete update of all Real and Personal Property values based on the prior calendar year sales and overall market conditions. This year, FY 2019, Haverhill’s Residential class has increased in value at a greater rate than the Commercial, Industrial & Personal Property (C.I.P) class. Due to the fact that the Residential class assessments increased at a greater % rate this year as compared to the C.I.P class, the Overall C.I.P. share in FY 2019 decreased and the Residential share increased. To lessen the burden on residential taxpayers, the city may shift the tax share from one class to another.

Percentage Share of Total Tax @ a Shift of 1 (single tax rate) FY 2019 FY 2018 CIP CIP Residential Residential FY18 Average Single Family $4,896 FY19 Average Single Family: $5,119 FY18 Average Commercial: $9,980 FY19 Average Commercial: $9,979

Chapter 200 Acts of 1988 Provides for a shift up to 175% of the single tax rate if the residential share is LARGER than the prior year’s share. FY18 – Residential Share Chosen – 78.3154 FY19 – Residential Share @150% – 79.1356 The FY 2019 Residential Share is LARGER than FY 2018 share, therefore, the city DOES qualify for the provisions of this legislation. Maximum allowable shift for FY19 is 175%

Percentage Share of Total Tax @ 159 Shift FY 2018 FY 2019 22.8411 22.1163 CIP CIP Residential Residential 77.1589 77.8837 FY18 Avg Single Fam. $4,391 FY19 Avg. Single Fam. $4,633 FY18 Avg. Commercial $15,811 FY19 Avg. Commercial $15,868

Percentage Share of Total Tax @ Shifts of 1,159,162,165 Taxes $9,979 Taxes $5,119 Taxes $15,868 159 Taxes $4,633 Taxes $16,169 162 Taxes $4,606 Taxes $16,470 165 Taxes $4,580

Property Value Change FY19 (In Percentage) State Mandated Interim Yr Value Adjustments Single Family Residential

FY 19 Interim Year Value Effects on Taxes With CIP Shift at 159% Industrial Single Family Residential Commercial

FY19 Interim Year Value Effects on Taxes (With CIP Shift at 162)

FY19 Interim Year Value Effects on Taxes (With CIP Shift at 165)

TAX IMPACT USING MEDIAN VALUES FY 2019 Single Family Median Value $310,200 Taxes - $4,376.92 @ 159% Increase of $240.09 over FY 18 Median Commercial Median Value $283,100 Taxes - $7,018.05 @159% Increase of $15.23 over FY 18 Median

FY19 Calculation of the Tax Rate Determine Tax Levy $$ FY19 Levy - $103,872,000 Determine Total Value FY19 Total Taxable Value - $6,661,940,690 Uniform or “Single” Tax Rate (Tax Levy / Total Value) $103,872,000 / $6,661,940,690 = $15.59

FY19 Calculation of the Tax Rate FY19 Residential Value - $5,735,288,608 FY19 C.I.P. Value - $926,652,082 FY19 Residential % - 86.0904 FY19 C.I.P. % - 13.9096 Shift Determined ( 1.59 ) * C.I.P. % 13.9096 X 1.59 = 22.1163% New share New % multiplied by Tax Levy = New C.I.P. Taxes 22.1163% X $103,872,000 = $22,972,643 New C.I.P. Taxes divided by Total C.I.P. Value = C.I.P. Tax Rate $22,972,643 / $926,652,082 = $24.79

Average Tax Bills @1% Increments at $103,872,000 Levy

Average Tax Bills @1% Increments at $103,372,000 Levy

Average Tax Bills @1% Increments at $102,872,000 Levy

Haverhill’s Current CIP Shift Compared to Similar Communities Salem, MA - 169 Quincy - 175 Lawrence - 175 Lowell - 175 Lynn - 175 Peabody – 171 Billerica - 175 Amesbury – 1 Newburyport – 1 North Andover – 136 Andover – 154.5 Haverhill – 159** Methuen – 173 Beverly – 168.5 A lower CIP Shift Corresponds with a higher Residential tax There are Approximately 110 communities that classify ** Haverhill FY19 proposed at 159 all others actual FY18**

NOTE This is a policy and economic decision of the Haverhill City Council and the Assessor’s Office assumes no official Position on this matter.