LYNN — The average single-family homeowner will see a $64 tax increase next year.
The City Council voted unanimously Tuesday night to set the lowest residential tax rate at $13.40 per $1,000 home assessment. No residents spoke during the tax classification hearing that was held before the vote and there was no discussion from the panel.
Although the new rate is lower than last year’s rate of $14.30, the increase in property taxes is due to the 8.19 percent increase on the estimated assessed value of the average single-family home.
The average single-family taxpayer will pay $4,720 on their tax bill, based on an average single-family assessed home value of $352,253.
Last year, the average homeowner paid $4,656 on their tax bill, based on an average single-family assessed home value of $325,600.
Still, Christopher Gaeta, director of assessing, said this year’s tax increase is “modest” compared to last year when the average single-family tax bill increased by $123. Two years ago, the tax increase was $265, he said.
It’s common practice in Lynn to adopt the lowest residential tax rate allowed by state law, which is meant to put less burden on the residential taxpayers, Gaeta said.
“I’ll always support the lowest residential tax rate classification,” said Ward 1 Councilor Wayne Lozzi.
For similar reasons, Gaeta said the City Council votes each year to adopt a 175 percent Commercial, Industrial, and Personal Property (CIP) shift, which taxes commercial property at the highest possible rate allowed under state law.
With Tuesday’s vote, the shift reduces residential share of the tax burden from 88.91 percent to 80.59 percent. The commercial, industrial and property share increases from 11.1 percent to 19.39 percent.
The average commercial tax bill will be $9,352, a $324 increase over last year, while the average industrial tax bill will be $10,219, for an increase of $125.
The commercial and industrial property rate was set at $25.87 per $1,000 assessment. Although lower than last year’s rate of $27.61, like single-family homeowners, the tax increase is due to an increase in the median commercial and industrial assessed values.
The median commercial assessed value increased by 10.55 percent over last year from $327,000 to $361,500, while the median industrial assessed value increased 8.04 percent from $365,600 to $395,000.
Gaeta noted the city’s total taxable assessed value of $9.226 billion for fiscal year 2020 is the highest in its history. He attributed the large tax base to market conditions and the CIP shift. Both commercial and residential property values are increasing. Assessed values are based on real estate sales from 2018, he said.
The level of spending needed in order to run the city government each year establishes the amount of money which must be raised by property taxes (the tax levy), which is subject to the limitations of Proposition 2½.
The maximum amount of taxes that can be raised under Prop 2½ is the levy limit, according to information prepared by the Board of Assessors.
The city can only raise 2½ percent more in addition to new growth on top of what the levy limit was last year, Gaeta said.
This year, or FY20, the levy limit is $136.4 million, which is a 3.95 percent, or $5.18 million increase over last year.
Tax bills are scheduled to go out next month.
