Haverhill residents will pay more in local property taxes when final tax bills go out. The exact amount of the surge will be decided by Haverhill city councilors Tuesday.
Haverhill Mayor James J. Fiorentini and the nine-member city council sealed property taxpayers’ fates earlier this year when they approved a record $168 million city budget. Now, the portion of the total budget paid by residents is increasing since home values are up more than commercial and industrial values.
“People are rediscovering Haverhill and, as a result, residential property values are up. Commercial and industrial values are also up, but have not kept pace with residential values,” Fiorentini said in a letter to councilors Friday. The mayor also suggested councilors shift more of the tax burden to businesses when the body sets so-called “classification” factors. City Assessor Stephen C. Gullo is expected to show councilors several scenarios from doing nothing to increasing various percentages for businesses.
The city budget uses almost all of the increase available to it under the state’s property tax-limiting law, Proposition 2 ½. That law also allows tax income from the value of new construction to exceed the cap. Two construction projects—Harbor Place and, if approved, Southwick Clothing—will not pay fully these extra amounts. These projects benefit from tax increment financing (TIF) deals either previously approved by the city council or on its agenda.
Where the Extra Money Went
The city has been building more parks and recreation areas—even in rural neighborhoods—and allocated extra money this year to pay for upkeep. Streets built by private developers have also been accepted by councilors, adding to maintenance, plowing and trash collection costs. Fiorentini has also refused to seek new bids for trash collection, opting instead to reduce costs by making residents use “toters” that can be collected with fewer workers.
This year’s total city budget is larger than when the city owned and operated a full-service hospital.
Council Mulls Options to Mitigate Increase
Besides making some businesses pay more, Fiorentini said, councilors may transfer $600,458 from reserve funds to reduce the total tax levy.
In addition, councilors are being asked to increase the amount of tax exemptions available to senior residents. This includes accepting state laws that tie the exemptions to inflation by using the Consumer Price Index.