Wednesday, January 8, 2014

Did you receive your FY2014/ 3Q Property Tax Bill?

All residential (+ business) property owners should have received their FY2014/ 3Q real estate tax bill in the mail earlier this week. Payment is due February 3.

After exhibiting 5-6% increases for the past two years due to the construction and bonding for the new Longmeadow HS, average FY2014 tax bills are only 2.7% higher than FY2013.

FY2014 mean property assessments in Longmeadow showed a significant drop as shown in Figure 1. Over the two past years Longmeadow assessments have decreased about 9.2% (from $359K --> $326K).  It is interesting to note that the state average showed a significant increase.
Figure 1- Historical Single Family Property Values
(click to enlarge chart)
Remember a decrease in the average Longmeadow property assessment will not necessarily reduce your property taxes unless your decrease is greater than the overall decrease.  The mil rate ($/$1000 of value) will increase to compensate for property assessment decline and the total property taxes in a given year will likely increase at least 2.5% unless the Select Board elects not to tax at the "levy limit".

In Figure 2, both actual and predicted mean property taxes (--> year 2020, assuming 2.5% growth + no Proposition 2½ overrides) are shown for Longmeadow.

Figure 2- Actual vs. Projected Property Taxes for Longmeadow
Using official published data by the Massachusetts Dept of Revenue, the following chart (see Figure 3) was created showing that Longmeadow taxes have been significantly higher ($2000- 2900 in FY2014) than the surrounding towns of Hampden, East Longmeadow and Wilbraham and the state average as well.  This difference has existed for almost 25 years and it appears that the difference has been growing larger since 2002.

Figure 3- Comparison of Western Mass Property Taxes
Longmeadow vs. Wilbraham, East Longmeadow and Hampden
Here are a couple of interesting numbers....
  • In a town like Longmeadow where single family property values range from $120K to $1.7 million, median values (half the values are higher and half are lower) are a more useful measure than mean or average values when comparing property taxes.
  • For FY2014 the mean value of property taxes for Longmeadow is $7558 while the median value is $6540.
  • The State of Massachusetts as well as the Town of Longmeadow always refer to the mean value of residential property.  In FY2014 the "mean" or average value for single family homes in Longmeadow is $326,500.
  • While the Mass DOR does not publish mean property values, individuals can obtain the information from their local assessors office which I did.  It turns out the "median" property value assessment in Longmeadow for FY2014 is only $282,600 (data as of December 2013). (median: 50% are higher, 50% are lower).
If you think that you may be entitled to an abatement because your current property assessment is too high, read the next Buzz blog article coming soon which will explain the process and provide you with some helpful information.  In the meantime you must pay your property taxes on time in order to be in the position of filing for an abatement.  The deadline for filing an abatement for FY2014 is February 1.

FY2014 budget discussions are already ongoing with the Select Board and School Committee.  Initial indications are that there is a significant shortfall in revenue to fund even existing programs.

Stay tuned to the LongmeadowBuzz blog.