Tax bills in city should be slightly lower this year
NASHUA – Although the property tax rate will increase by nearly 17 percent this year, the tax bill most homeowners will pay should be slightly less this year, according to preliminary figures the mayor released Monday.
That’s because residential home values are expected to drop by an average of 15 percent, and commercial values by about 5 percent, Mayor Donnalee Lozeau told the aldermen’s Budget Review Committee.
The mayor cited the example of a house that in 2009 was valued at $250,000, for which the homeowner last year paid $4,387 in property taxes.
After revaluation, the assessed value of the house has dropped to $212,500, and the homeowner will pay $4,355 in taxes even though the tax rate has risen from $17.55 to $20.50 over the same period.
“My goal has been to have people pay the same, or less,” Lozeau said.
However, she cautioned that the numbers were preliminary, describing them as a snapshot of “where we think things are right now.”
The estimate also depends on what has become the 600-pound gorilla in calculating budgets and taxes – dealing with the $3 million that the school department overspent in fiscal 2009, which ended June 30.
Tonight, the full Board of Aldermen will consider a resolution already endorsed by the Board of Education to transfer $3.3 million from the school capital reserve account to cover the shortfall in the fiscal 2009 budget.
In presenting her tax estimate, Lozeau said she was operating under the assumption that the aldermen would approve the resolution.
The school board also has discussed making a series of cuts to offset a projected $3 million deficit in fiscal 2010, which started July 1.
“This is all predicated on the school department being able to meet their 2010 budget as well,” Lozeau said of her tax bill estimate.
“There’s a lot of assumptions,” she said.
Her numbers were based on figures provided by city Assessor Angelo Marino, Lozeau said, adding that Marino hasn’t yet finished his work on the revaluation.
Ward 5 Alderman Mike Tabacsko said the reduction of home values represents two years of work “catching up on a down real-estate market.”
“Wow, what an impact on the equity area,” Alderman-at-Large David Deane said.
“This is quite an eye-opener for people who have gone and pulled second mortgages on their house on equity that no longer exists,” Deane said.
He noted that the tax rate and home values balance each other. If home values hadn’t dropped, the tax rate wouldn’t have risen by 17 percent, Deane said.
Lozeau cautioned that not all homeowners will see a drop in their home assessment. She cited the example of the owner of a $300,000 home that had been under-assessed by $50,000.
In that hypothetical case, the home value would probably stay the same with the revaluation, she said.