Newton’s levy down, residential taxes still rise

Despite a decrease in the city’s tax levy, Newton residents may still see a slight uptick in their property taxes under a proposed budget presented to the Newton City Council on Monday evening.

Interim City Administrator Bryan Friedman noted that the proposed levy rate is 14.91, the first time since 1993-1994 that the city’s tax levy would fall below 15. While that would mean lower taxes for commercial properties, it still would cause residential taxes to rise. The state rollback rate has increased from 48.5299 in the current fiscal year to 50.7518. The rollback rate controls what percentage of a property’s value is subject to taxation, and a higher rate means a higher percentage of the property will be taxed.

In the current budget year, the owner of a $90,000 Newton home is paying about $668 on the city portion of their property taxes. The city portion makes up around 35 percent of a typical Newton property tax bill with county and school district taxes making up most of the remainder.

Under the proposed 2012-2013 city budget, the owner of a home valued at $90,000 would owe $681 — an increase of $13.

Commercial property owners would get a slight break. A $90,000 commercial property would owe about $1,377 in the current year, but under the 2012-2013 proposal it would fall to $1,342 for the city portion of property taxes.

Yet, those figures assume that the state legislature doesn’t start rolling back taxes owed by commercial properties in the upcoming year. Discussions at the state house on the governor’s plan to slash commercial property taxes by up to 40 percent are still ongoing, and there was concern by some council members that the outcome could impact the upcoming budget.

Friedman indicated that it appears unlikely.

“There is a time delay,” he said. “In all the proposals it appears they will try to phase in the property tax relief.”

If the decrease in the commercial property taxes is approved in its current form, it would take effect starting Jan. 1 2013, which would impact the city’s 2014-2015 budget, due to the timing of when those taxes would be paid. Friedman said that a 5 percent decrease in commercial property taxes would be about a $93,000 decrease in revenue for the city, but a modest 2 percent growth in the commercial property tax base of 2 percent would drop the lost revenue figure to about $56,000.