Haverhill Mayor Predicts City Budget Will Grow $21 Million By 2020

Haverhill City Council President John A. Michitson.

City Council President John A. Michitson

Councilors eye short-term spending in advance of  tax classification hearing

Haverhill Mayor James  J. Fiorentini expects city spending to increase by nearly nearly 12 percent, $22 million, by 2020, led by school and public safety expenditures.

Almost half of the total increase, $10 million, will come from teacher salaries and other school spending, the mayor said. Fiorentini forecasts increases in the school budget of roughly 4 to 5 percent each year from now until 2020. Police and firefighter salaries will increase by 2 percent annually each year from 2018 to 2020.

In the coming fiscal year, which begins July 1, 2017, city spending is projected to rise $6 million, or nearly 3.4 percent, to $77.8 million, not counting the costs of the Water and Wastewater departments, which are expected to be self-funding based on the fees they take in.

All this information comes in advance of a tax classification hearing scheduled for November 15, when the City Council will set the property tax rate and tax burden factor between Haverhill homeowners and businesses.

In 2015, City Council declined to shift additional burden to Haverhill's commercial and industrial taxpayers, which resulted in an increase of $88 on the average homeowner's tax bill.

As WHAV reported at the time, the council voted, 6-3, to retain a factor of 156, meaning city commercial properties would carry 156 percent of the overall tax burden, and residential properties the remaining 44 percent.

This so-called tax classification is allowed under state law to make up for the disparity in value between commercial and residential property. In Haverhill, the City Council meets every November to determine how to split the tax burden for the coming year.

Council President John A. Michitson said the council will use the mayor’s forecast in combination with data provided by City Assessor Stephen C. Gullo to figure out whether to tax up to the level allowed by the state, which is referred to as the levy limit.

“In order to determine how far under the levy we want to be, we need to understand what our needs are over the next five to ten years,”Michitson told WHAV. “It will give us a good indication as to whether or not we have any flexibility at all to be under the levy.”

According to Michitson, being under the levy does not necessarily result in a tax break for Haverhill property and business owners.

“It's not really a tax break because in the next year we can go to the levy, plus the amount of the prior year,” Michitson said. “If we have all of these needs, we're going to have to spend the money. I’d rather have the money tucked away for a rainy day than to have to go back to the taxpayers and say ‘sorry, we need that money that you thought we saved you last year.’ ”

The forecast document was placed on file during Tuesday’s council meeting.

 

4 thoughts on “Haverhill Mayor Predicts City Budget Will Grow $21 Million By 2020

  1. Where do the water/ sewer rate increases come to play here ? We must understand that this is a reality for those homes using these services, the increase in this area will be large and you have to ADD these increases to potential tax increases coming in the future to pay for the projected budget increases. Typical political trick or treat. The water dept. is the money tree for the city.

  2. “According to Michitson, being under the levy does not necessarily result in a tax break for Haverhill property and business owners.” –

    Of course it won’t, there are two compound growth functions, growing at different rates, and they’re are moving away from each other over past five (5) years:

    Overall
    ———
    Expenses @ 9.7%
    Revenues @ 8.5%
    ———
    Pensions +11.0%
    Property Taxes +11.9%
    Public Safety +17.3%
    Education +10.9%
    DEBT SERVICE +28.4%

    The mayors guess may or may not in the ballpark, there’s simply too many unknowns going forward. One of which is the crash in homeownership (again), down 6% in Massachusetts in the past three (3) years. Home prices continue to rise, but wages/incomes cannot match, which has led to ridiculous rental prices. Won’t be getting young adults out of mon & dad’s basement either, they’re too indebted already to buy homes. While the Mayor looks for immediate gratification, it’s the long trends that matter to HOUSEHOLDS. Plan on fewer services/benefits along with higher taxes and further state/local bond issuance, which of course exacerbates the issue(s) for regular middle/lower income working folks.

    http://www.haverhillma.gov/departments/finance_department/auditor_s_office/docs/H___Haverhill_2011_GASB_FS_FED_Version.pdf
    http://www.haverhillma.gov/departments/finance_department/auditor_s_office/docs/H%20-%20Haverhill%202015%20GASB%20FS%20-%20Fed%20Version.pdf
    https://fred.stlouisfed.org/graph/?g=890c

  3. As we continue to build housing downtown and other clustered areas our student population will continue to drastically increase and will lead to budgetary increases far larger than is presently anticipated. The needs to consider : more teachers , increase in the number of teacher aids, athletic areas, over crowded classrooms, drastic increases in bus transportation costs,on and on and on. It will be the cities obligation to educate the new students and provide services to their parents. Since we have welcomed them to our city,and I am personally happy that they are here, we must live up to our responsibilities to the new residents. Personally I see cost increase far greater than that which is anticipated.
    It seems that school committee’s responsibility is to anticipate the increases that are looming and prepare. Lets all be good scouts and “be prepared”