PEABODY — City Council held a special meeting Tuesday evening to vote on the tax classification for the 2025 year, resulting in an approval of the proposed tax rates.
Mayor Ted Bennecourt and Director of the Finance Department Mike Gingras gave an in-depth presentation on the financials of the city that included an update on the Fiscal Year 2024 close, went into the property values by classification for 2025, and an analysis of values from 2020-25.
A final recommendation for the upcoming fiscal year was made for an actual tax levy of $130,526,584, a classification factor of 175%, resulting in a residential tax rate of $9.26 and a Commerical Industrial Personal Property (CIP) tax rate of $19.02.
These tax rates are slightly higher than last year’s of $9.26 and $18.83, respectively, a shift from the steady downward trend seen between 2020 and 2024.
The 175% classification factor relates to how much of the tax burden is being shifted from the residents to the CIP sector.
Before classification, CIP, valued at 1,978,795,935, would account for 16.5% of the tax levy, while residential, with an estimated value of 10,030,155,117, would be 83.5% of the levy.
This 175% classification factor recommended by Bettencourt and his office would mean residents would instead have to account for 71.2% of the city’s taxes, while CIP would be responsible for 28.8%, resulting in the final tax rates of $9.26 residential and $19.02 CIP.
City Council voted nine to one in favor for this proposed tax rate classification, with the only no vote coming from Councillor-At-Large Anne Manning-Martin.
This all equals out to an expected increase of $386.56 for an average resident, and a $420 increase for a single family, although Gringas stated he is confident the figure will end up below the Essex County average of $411 once all of next year’s information is posted.
Bettencourt laid out a couple reasons that led to this increase, including an unexpected 10% bump in the city’s health insurance obligations, translating to approximately an $80 tax increase for residents. He noted this was the “largest year-over-year increase to health insurance since I’ve been mayor and probably many years before that.”
Other expanded expanses include an 18% increase to retiree health insurance, a nearly 4% increase to pension obligations, and an almost $700,000 increase to the city’s Essex Tech investment.
“Despite these rising costs, you and I continue to work together to improve our city, and to make Peabody a more desirable place to live, work, start a business, and raise a family,” Bettencourt said.
He went on to tout another year of increased value of the average residential home, which is now up to nearly $615,000.
Another point the mayor explained referred to the funds from the American Rescue Plan Act (ARPA), money that will no longer be available after 2025 with the COVID-19-era program coming to an end.
“I’m very pleased with how we handled the ARPA funds over the last few years as a community,” Bettencourt said. “I think we did things the right way by gradually reducing our reliance on ARPA.”
Peabody residents can expect a tax bill that is, as mentioned by the mayor, “among the very lowest residential tax bills of any city or town in Essex County, and among the very lowest in the entire state of Massachusetts.”
