City Council President John Michitson will lead the tax classification hearing Tuesday night.
The average Haverhill single-family residential property owner would see a $154 property increase if the City Council does nothing to change the way residential and commercial property owners share the city’s overall tax burden.
But even if the council shifts more burden to the commercial and industrial base, homeowners will likely see an increase, although a smaller one, thanks to the increase in residential property values in the past year.
The council Tuesday is scheduled to determine the city’s residential and commercial property tax rates during the annual ritual known as the tax classification hearing. That’s when the council decides how heavily it will tax commercial properties in comparison to residential.
Based on sales and market conditions at the end of 2015, single-family home values increased 5.9 percent compared with the previous tax year and commercial property values increased at a lower, 2.3 percent, according to City Assessor Stephen C. Gullo. The city needs to raise $96.2 million to cover the budget for the year. At the current tax classification factor, that would mean the tax bill for the average single-family homeowner in the fiscal year started July 1 would rise to $4,079, up from $3,925, based on a $271,600 median valuation. The average commercial property tax would fall by $67, to $6,486, on a median value of $247,000.
The council would have the option to approve a higher classification factor to soften the residential tax burden and shift a greater share to business owners. For example, shift from the current factor of 157 to 160 would increase average commercial property taxes by up to $207 and a smaller tax increase, by $121, for an average single-family homeowner.
In other property categories, tax bills for multifamily homes at the current split would rise as much as $208 in reflecting an 8.2 percent valuation increase. Meanwhile, industrial properties had the smallest valuation increase at 1.6 percent. Those tax bills could drop by as much as $310 if the council makes no change.
The residential property tax rate is $15.36 per $1,000 valuation and the commercial tax rate is $27.01 per thousand. Under the new levy, with increased valuations, tax rates at 157 factor would be $15.02 and $26.26 respectively. At 160 factor, for example, rates would be set at $14.93 residential and $26.77 commercial. In Haverhill, residential properties make up 84.8 percent of all assessed properties this year.
The Haverhill City Council meets at 7 p.m., Tuesday, in Theodore A. Pelosi Jr. Council Chambers at Haverhill City Hall.