Good morning, Salem! Last night was the final city council meeting of 2019. Before I launch into it, we would like to take a moment to thank Councilors Furey, Gerard, Milo, and Peterson for their service to Salem.
Milo was absent.
Matters were taken out of order so that small items could be cleared up. Council approved the Frosty Four, a 5K that takes to the wintry streets on New Year’s Day. Councilor Flynn introduced a property tax exemption for Gold Star families, a family who has lost an immediate family member in the line of duty. It was unanimously approved.
The public “Tax Classification” hearing for fiscal year 2020 took up a large chunk of the meeting. The Board of Assessors have valued the property across Salem in four broad categories: residential, commercial, industrial, and personal property. Their assessment is reviewed and approved by the state Department of Revenue to ensure that the Board is not over- or under-valuing properties. The City Council has no control over modifying the assessed value from which the tax rate is factored. There are a few important things to note when it comes to the tax increase: first, the assessments are roughly one-year to 18 months behind market rate. Second, the city sets aside a portion of funding to offset expenses to reduce the burden on taxpayers. This comes from three sources: free cash; receipts reserved: $1,238,516 (approved); and surplus overlay. Though this wasn’t covered in the presentation, it is my understanding that the free cash and surplus have not been certified, so the total amount is not set. Finally, in Salem, the residents carry the lion’s share of the tax burden (~80%) and cities with higher a commercial base tend to have lower residential property tax.
There is a “levy limit,” which caps the amount a city is allowed by law to tax in a given year. The formula for the maximum is: Last year’s levy + 2.5% + new growth. Total new growth tax dollars this year equaled $5,902,454; most of which came from Footprint.
Salem’s 2020 levy limit is $107,591,472. Salem’s 2020 levy will be $103,616,867. That means that the city was able to levy taxpayers $3,974,605 under the allowable limit. The assessors showed a graphic comparing the average single family tax increase across cities, and on the high-end was Marblehead (+$264/year) and Danvers (+$231/year); Salem comes in well under with a +$87/year average increase. This is the AVERAGE. It does not equal what you will be taxed, specifically. There are ample tax exemptions available; in fact, roughly 3500 senior citizens and veterans qualified for exemptions last year. Visit the assessor’s website for information or call 978-619-5608.
The City Council voted to adopt the residential factor (.854197), with Flynn voting against. You will note that this is ONE RATE. Homeowners are not charged more or less than condo owners. Condo valuation has grown tremendously, so the average looks higher, but condo owners still typically pay less in taxes than homeowners. In other tax votes, the council unanimously voted to NOT allow open space, residential, or small commercial exemptions.
Other matters in brief:
$100,000 was set aside for the Pioneer Village, Naumkeag project study.
City Council unanimously endorsed a resolution to support a bill to protect North Atlantic Right Whales.
Second passage to approve a $60K bond for the Salem High Library and to codify the tap boards ordinance went through without incident.
The Ordinances, Licenses, and Legal Affairs (OLLA), Administration and Finance, and Government Services committees carried old business over into 2020. Flynn mentioned that Government Services discharged the matter regarding restrictions on placement and timing of political signs. (Edited to correct becaues matters from other committees were discharged, but not detailed at the meeting.)