Sunday, March 1, 2015

No Abatement For You!

Colonial Village South East St (foreground) Belchertown Road to the rear

Last week in Executive Session the Board of Assessors unanimously sided with town Principal Assessor David Burgess and upheld his significant increase in valuation from FY14 to FY15 for four Apartment complexes in town: Presidential Apartments, Brandywine (both in North Amherst) and the two Colonial Village complexes in East Amherst off South East Street and Belchertown Road.

 Presidential Apartments

Click to enlarge/read

The total increase came to almost $7 million in valuation, or with a tax rate of $20.97/$1,000, almost $150,000 in property tax revenue to the town.  Enough to add a couple of firefighters or police officers to our desperately anemic public safety departments.

 Branywine Apartments

Although had they won the appeal it's no skin off the town's nose, because the tax base would remain the same (allowed by law to increase 2.5% per year) and other property owners would simply pick up the tab by having their valuations, or the tax rate, go up ever so slightly.

The apartment complexes can appeal the decision to the Appellate Tax Board in Boston or the Hampshire Council of Governments in Northampton, although since it's a complicated case it would probably have to be the former.

Either way, costly from a legal perspective.


Anonymous said...

No abatement because none is called for. Were the valuations incorrect?

Larry Kelley said...

They seemed to think so.

A lot goes into an abatement hearing.

They have to show rent figures, vacancy rate, overhead costs, etc. Which is why it's done in Executive Session.

Mr. Burgess would not share with me what they thought their valuation should be.

Dr. Ed said...

This is why I argue that Amherst is a place where the poor subsidize the rich -- the property taxes charged to the apartment complexes are passed on to those who reside therein and paid in the form of rent.

To simplify things, let's pretend that (a) assessment was based on nothing more than square footage of living space, and (b) it was taxed at $1 per square foot. Hence the tenant in a 500 square foot apartment pays $500/year while the person living in the 5000 square foot house pays $5000/year.

Yes, the homeowner pays more -- because the homeowner has more, in theory everyone pays the same. Except that the homeowner gets the exemption while the tenant doesn't and thus the tenant winds up paying a higher rate for what the tenant has.

And it's a zero-sum game -- collectively, the total tax revenue can only increase by 2.5% per year, so the tenant paying more means the homeowner pays less.

Hence the tenant is, essentially, subsidizing the homeowner. And as many of the tenants are UM students, they are essentially subsidizing the homeowners.

Hence the UMass students are subsidizing Amherst homeowners, and as students use few municipal services, they are subsidizing everyone else even more.

Even if the fire/police budget was 100% student-related, and it is nowhere near that, it is only about a quarter of the total budget and both police and fire have significant revenue streams coming in.

(The student suing the APD "reimbursed" them $200 -- did that money actually go to them or is it like the AFD's ambulance fees?)

The K-12 schools, by contrast, take over half the budget and have no revenue coming in from those who use them. And most UM students don't have children.

Anonymous said...

Ed's argument has so many intentional mathematical errors and leaps of logic. Please, don't feed him.