Lower tax rate is not always a good thing

Taxpayers in Hollis and Brookline can expect good news and bad news when they open their 2008 tax bills.

The good news is that the tax rate in both towns has dropped from last year.

The bad news is that a lower tax rate doesn’t mean lower taxes for property owners.

“When you have an update or revaluation, a third of property owners’ taxes go down, a third go up and (a) third stay the same,” said Connie Cain, assistant to the assessor in Hollis.

In Hollis, the 2008 tax rate, which represents how much property owners will have to pay for every thousand dollars of assessed value on their property, is $20.95 per $1,000. This is $2.43, or 10 percent, less than last year’s rate.In Brookline, the tax rate dropped to $24.24 per $1,000, which is $2.20, or 8 percent, less than the 2007 rate.

Taxes are based on how much money a town agrees to spend to pay for schools, public safety, public works, services and more.

They include payments to the county as well as the state education tax.

An increase in the amount a town decides to spend means more tax money is needed to pay the bills.

“You pay more because appropriations are up,” observed Paul Calabria, Hollis finance director.

Most Hollis taxpayers are seeing an average increase of about 20 percent in their property values.

But Calabria said the revaluation corrects over-valued or under-valued properties, based on the Fair Market Value.

“Taxes go down only if (a property) was overvalued the last time,” Calabria said.

In Brookline, selectman James McElroy said it was “impossible” to calculate how the new tax rate would affect taxes levied on the average home.

“There are too many variables,” McElroy wrote in an e-mail.

“The town voted to spend more money, and the value of each home was reassessed. That said, you could pick a house of certain value, (say 300K), assume it went up by the average assessment increase, and then calculate the tax increase.”

Among five communities west of Nashua, including Amherst, Bedford and Milford, where the state Department of Revenue Administration has set the tax rate, Bedford, Hollis and Brookline have seen the tax rate drop.

Cain, the Hollis assistant to the assessor, said she’s received plenty of calls from residents with questions about their taxes.

Frequently, taxpayers confuse the tax rate with assessed property valuation.

“They’re two separate things,” Cain said.

“If the assessed value goes up, the tax rate drops to (avoid) over-collecting,” she said. “If the assessed value goes down, the tax rate goes up.”

Cain said the difference between tax rates, town to town, is founded on the tax base, the total value of property in the town.

That’s why any attempt to compare Hollis and Brookline is like comparing apples and oranges, she added.

“There are different rates per town because of different tax bases,” Cain said.

McElroy, the Brookline selectman, said he’s been providing local taxpayers with literature that provides examples and comparisons.

The charts show that despite identical market values of comparable homes in three towns, assessed values differ, resulting in different tax rates for each town, set by the DRA.

Marcia Farwell, a member of the Brookline Board of Assessors, said she received her tax bill early last week.

While the tax rate went down by just under 10 percent, she said, assessments went up between 19 percent and 23 percent on average.

The result was an increase in her taxes.

Farwell said the town is “headed for a full revaluation” sometime during the next several years.

Meanwhile, she and her colleagues on the Board of Assessors continue to be barraged with calls from anxious homeowners, prompted by increased property values and concerns about the fragile, state, national and global economies.

“It’s supposed to be Fair Market Value, but it’s not,” Farwell said of revalued properties. “Many, many people are in the same boat.”