Additionally, in an effort to continue to provide as much relief possible for City residents and businesses, Mayor Sarno announced the commitment of the use of $1 million of FY23 certified free cash to help reduce taxes. This brings the total amount committed to offset the tax levy to $8 million.
This recommendation has been developed in consultation with acting Chief Administrative and Financial Officer (CAFO) Patrick Burns, Deputy CAFO Lindsay Hackett, Chairman of the Board of Assessors Attorney Patrick Greenhalgh and the Board of Assessors.
The residential rate reflects a decrease of $.91, from last year’s rate of $17.05, and the CIP rate reflects a decrease of $.91, from last year’s rate of $36.40. If approved by the City Council, this will be the lowest residential and CIP rate in over a decade.
Mayor Sarno will allocate over $8 million to offset the FY24 tax levy to help reduce the average property tax bill. $5 million from the money received from the Eversource payment, over $2 million from the innovative financial investment plan which was previously announced by Mayor Sarno, former CAFO TJ Plante, and City Councilors Attorney Michael Fenton, Maria Perez and Tim Allen, Chair of the Council Finance Committee, using United States Treasury Notes, and an additional commitment of $1 million from FY 23 certified free cash.
Due to the booming real estate market, the average single-family tax bill could have increased by approximately $519 using the same residential rate as last year, however with the combination of the significantly lower residential tax rate and over $8 million the Sarno Administration has committed to help offset the FY24 tax levy, the average single-family tax bill will only increase by approximately $175, a $344 decrease from potential amount of $519.
Through calendar year 2022, the real estate market has remained strong, which reflects in the comparable market sales and values as of January 1, 2023. The average single-family home value rose to $238,700 from last year’s $215,700, a nearly 11% increase or $23,000. As a result, many homeowners now have additional equity in their properties.
The average single-family tax bill produced by the proposed rate would be approximately $3,853, which is expected to keep Springfield in the bottom ten percent of all communities in the Commonwealth. Last year, the average single-family tax bill was $3,678.
The proposed rates will be forwarded to the City Council for consideration.
Mayor Sarno states, “Our residents are feeling the effects of inflation and the increases in prices such as the cost of buying groceries. All of this has a negative effect on our resident’s quality of life. I strongly believe that this significantly lower tax rate, especially for our residential rate, will continue to provide much-needed relief for our residents. Without this lower residential tax rate and the $8 million I have committed to offset the tax levy ($5 million from the Eversource payment, $2 million from investment interest, and an additional commitment of $1 million from FY 23 certified free cash), the average single-family tax bill could have increased by $519 using the same residential tax rate as last year. With this lower rate and offset to the tax levy, it will now increase approximately $175, a $344 decrease. These strategic and fiscally prudent measures are made possible thanks to our innovative investment strategies that aim to enhance the quality of life for our residents while being mindful of our overall budget and being able to sustain our core city services, programs and initiatives.”
“This is a delicate balancing act of maintaining core and vital city services while also being respectful to our residents and businesses,” Mayor Sarno continued. “We must remain mindful and plan accordingly for any economic uncertainty we may experience, including a possible recession, inflation, and shortages on goods and materials which can drive prices up. We don’t want to mortgage our future with short-term and short-sighted measures that will result in our taxpayers later experiencing a balloon property tax payment in the future when the funding to offset the tax levy isn’t there, while also hindering our municipal efforts to provide services, programs, infrastructure enhancements, and relief in the future.”
“My administration is committed to providing what relief and support we can while maintaining core and vital services to continue stimulating our local economy, business development, and creating more of that good four-letter word, jobs, while just as important, being respectful to our homeowners,” said Mayor Sarno.
Another contributing factor in the City’s healthy real estate market is the City’s very successful first-time homebuyers’ program.
Acting CAFO Burns stated, “Thanks to our careful fiscal stewardship under the direction of Mayor Sarno, the Office of Administration and Finance is able to continue to provide much-needed relief for our tax paying residents and businesses. It is always a delicate and challenging balancing act and this has never been more evident than during these challenging and uncertain economic times, with a possible recession, supply chain issues and increasing inflation. We strongly believe that this measure of relief by lowering the tax rate and investing a significant one-time payment to help offset the tax levy is the right thing to do and will allow us to maintain our fiscal flexibility to continue to invest in our reserves, pension liability, infrastructure improvements and maintain core city services and our options for providing continued relief in the future.”
Chairman of the Board of Assessors Patrick Greenhalgh stated, “I believe we continue to strike a good balance of maintaining a sound and respectable fiscal tax rate while trying to provide as much relief we realistically can for our taxpayers. These are not easy decisions but we are confident that our taxpayers will realize less of an increase in their bills.”
The assessed values of real estate reflect physical condition as of June 30, 2023 and market value as of January 1, 2023.
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Mayor Sarno and Assessor Greenhalgh would like to remind the public that homeowners may be eligible for property tax relief based on their personal circumstances. Especially for seniors, as Mayor Sarno submitted and the City Council approved additional monetary relief by modifying the limits on the State Clause 41C statute for tax abatements for seniors. The eligibility age has been reduced to 65 from 70, and the abatement amount to $1,000 from $500.
There are two types of applications. Homeowner Personal Exemption applications and Property Overvalue applications.
Homeowner Personal Exemption applications include State statutory relief for citizens of Sixty-Five years of age who meet certain income and asset levels; widows and widowers of any age with assets below a certain level or persons over 70; veterans of at least ten percent disability or otherwise meeting other criteria; and blind persons. In Fiscal Year 2023, over 1,000 households received some type of statutory relief, for an approximate aggregate savings of $805,000. Please note, the deadline to file is April 1, 2024
Property Overvalue applications are mostly used to appeal the Fair Market Value of your home to the Board of Assessors. If you believe the assessed value of your property exceeds the fair market value, it is your right to file an overvalue application. Please note, the deadline to apply February 1, 2024.
The Assessor’s Office encourages all residents who are unsure if they might qualify, to call or come into the Assessor’s Office in order to discuss their options. The Assessor’s Office phone number is (413) 886-5256. Their office is located in City Hall, 36 Court Street, Room 9, Springfield, Massachusetts.
Mayor Sarno stated, “I want to commend my Board of Assessors – Patrick Greenhalgh, Matt Fontaine, and Jessica Guerra, and their staff for their efforts and the excellent job they do getting back to our residents and businesses that reach out for help.”
Additionally, seniors can file for the Massachusetts Senior Circuit Breaker Tax Credit for Owners and Renters. The maximum amount of this credit has recently doubled. The Mass Senior Circuit Breaker Tax Credit is available for seniors age 65 or older, who meet certain income guidelines. For more information, please visit the Massachusetts Senior Circuit Breaker Tax Credit website at: www.mass.gov/info-details/massachusetts-senior-circuit-breaker-tax-credit
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Mayor Sarno and his administration will continue to research and explore additional tax relief options for residents.