Haverhill Budget Would Bring $444 Average Single-Family Tax Hike to Offset ‘Artificial’ Past Low Taxes

City chart depicts higher percentage tax increase compared with past hikes and future projections.

The average Haverhill single-family homeowner can expect a property tax increase about twice as large as those in recent years to make up for, what officials blamed, a previous strategy to “artificially keep taxes low.”

The formal release Friday of Mayor Melinda E. Barrett’s budget for the year that begins July 1 shows an average single-family tax increase of $444 if the proposed plan is approved. Its bottom line, taking into account costs increases and reduced income from some sources, is consistent with a City Council presentation WHAV reported first two weeks ago. The $262 million spending plan is $15.1 million higher than the current year with property taxpayers picking up about 2/3 of the increase.

Statements within the budget explain the city previously used its surplus, known as “free cash,” to subsidize tax bills and cause building maintenance to be deferred with bills now coming due.

For example, one note reports the current year budget used “a record” $6.2 million in free cash “instead of using a larger portion of the available tax levy of $6,472,558 to fund operations. This strategy was used to artificially keep taxes low and was viable while free cash certifications remained in excess of $9 million annually.”

“To help the city avoid a structural deficit,” another paragraph states, the mayor has recommended reducing the use of free cash to fund 2025 operations and work towards full compliance with the city’s financial policy which states, ‘The city will not balance the budget by using one-time revenues to fund ongoing expenditures and no more than 20% of a non-recurring revenue item maybe used for ongoing expenditures.’”

The new spending plan is described as a “level services budget.” Tax bills are expected to account for $1.7 million voters approved to pay for the new Dr. Albert B. Consentino School; borrowing costs of $673,000 for capital projects such as a ladder truck, road improvements and  tennis and pickleball building; $3.7 million to settle city and school labor agreements; $1.6 million in increases for employee benefits; $800,000 is to resolve a free cash deficit; $500,000 for the snow and ice, described as “historically underfunded;” $500,000 for unforeseen emergencies; and $800,000 for the school department to cover the loss of federal COVID-19 aid.

While the mayor’s budget includes $780,000 for, what it calls, “high-priority projects” such as the boiler and other needs at the Citizens Center, it defers public works yard rehabilitation, animal shelter, police station HVAC and incident command vehicle, school parking lot repairs and stadium restroom repairs. The budget also omits a request for an assistant fire chief recommended by an independent study last year.

The administration reports net state aid drops $297,708 since a 1% increase is more than offset by increased state chargebacks of 4.7%, including $21,785 for regional transit. Other income drops include interest on federal American Rescue Plan Act money that was invested until spent.

Some expenses don’t show on tax bills, but rather appear over time on water and sewer bills. Wastewater ratepayers face $37.3 million in payments toward a debt of $41.8 million and payments of $41.8 million toward a debt of $48.5 million.

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