Council Rejects $1M Refund to Taxpayers, Shifts More Burden to Business

City councilors rejected Mayor James J. Fiorentini’s request to return $1 million to taxpayers, and increased the tax burden on business properties.

The residential tax rate for the coming year will be about $14.30 on $1,000 of value, and $25.20 per $1,000 for commercial and industrial properties.

The annual tax on the average Haverhill home will increase by roughly $95. Commercial property owners will pay about $330 more and industrial property tax bills will rise by about $56.

Fiorentini’s suggestion to use $1 million from a $10.8 million pot of free cash to shrink the total tax levy would have resulted in a residential tax rate of $14.17 and a commercial rate of $25.01.

But Council Vice President Melinda Barrett (pictured) said it is unfair to taxpayers to make promises and take money to pay for them, then fail to deliver.

“We haven’t done anything about the animal shelter,” Barrett said as an example. “The walls are insulated with dead rats; it’s an abomination.”

The city has the responsibility of saving for benefit costs for former city employees, particularly health insurance after they retire, she said, but has so far failed to do so.

Council President John A. Michitson also objected to reducing the tax burden by $1 million, saying there are better uses for the money.

“Our needs tremendously outweigh our means,” he said.

A continuing surge of gang violence and a growing list of capital needs argue against giving such a large break to taxpayers, said Councilor Michael S. McGonagle.

“We could take this million dollars and use it for education, public safety … there’s not enough in (the) Fire (Department budget), McGonagle said. “I want to take this money and do something with it.”

Several councilors mentioned the loss of state Rep. Brian S. Dempsey’s clout as chairman of the House Ways and Means Committee. The Haverhill state representative was able to include about $2.4 million in aid to the city over the last few years to pay the Hale Hospital debt.

Councilors argued that the uncertainty over whether new Rep. Andy X. Vargas will be able to deliver the same level of support is a reason to hold back on the $1 million break for taxpayers.

Vargas, a first-term city councilor, agreed that there’s a good chance he’ll be unable to score state funds for the Hale debt payment, at least for the next couple of years.

“Freshman representative, Washington, DC politics and state revenue being down $1 billion, it’s probably not realistic to expect $2.4 million for the Hale debt,” Vargas conceded.

For the second year in a row, Councilor William J. Macek argued on behalf of giving residential taxpayers every break possible, supporting the $1 million tax break and shifting the tax burden even further onto businesses.

“Last year, we clobbered homeowners,” Macek said.

The mayor reminded councilors that taxpayers will experience increases in water and wastewater rates in the coming year as well.

Councilors settled on returning $300,000 to taxpayers, which put the total tax levy at $99.5 million.

Once they decided on the amount needed to fund this year’s budget, councilors shifted the burden toward commercial and industrial properties by the smallest increment possible. Barrett and Michitson were the only “no” votes on the motion to increase the tax burden on business properties.

The mayor had recommended leaving the share unchanged from this year.

Tax rates for both residential and commercial properties will fall by nearly a dollar, but rising property values are responsible for increasing total bills.