Compared to other small towns in Western Massachusetts, Shutesbury is one of the least affordable. Our fiscal year 2021 tax rate of $22.61 ($23.37 for FY2022) is the sixth-highest out of 351 Massachusetts communities while our per capita income is the 289th highest (near the bottom). Paying the average single-family tax bill of $5,662 takes 21.1% of income, the 16th highest. Shutesbury has been among the 10 highest tax rates in Massachusetts in each of the last 10 fiscal years.
Benefits of Homeownership
Homeownership is a proven wealth-builder for middle-class families. Census surveys show that persons who own their home have much more wealth than renters— 89 times more in 2017. Home equity accounts for the lion’s share of homeowners’ wealth.
A 2018 study from Harvard’s Joint Center for Housing Studies noted that more than half of the nation’s households were headed by persons aged 50 years and older. In Shutesbury, the over-50 crowd makes up 48% of the town’s population and the majority—90%—are homeowners; only 16% of Shutesbury homes are owned by persons younger than 45 years.
Ideally, housing expenses such as mortgage payments, homeowners’ insurance, real estate taxes, and repair and maintenance costs should consume less than 30% of gross household income, according to experts. One big advantage to having a mortgage rather than paying rent is the stability of the former compared to the latter. Thirty-year mortgages also have the advantage of being paid off eventually, usually later in life, when the income reduction associated with retirement is on the horizon.
4 Ways Shutesbury Could Lower Property Taxes
How can the Town of Shutesbury be more supportive of its residents who are homeowners? The answer lies in reducing the one area of housing costs over which the town has control: property taxes.
Property taxes are considered regressive because the same rate must be paid regardless of income. This is a particular burden for older homeowners, especially retirees. It can also be an issue for single-parent households. Many have watched the value of their home increase far beyond the price paid, inflating their tax bills as their income has dropped.
Each $1.00 reduction in the tax rate would save the owner of a home valued at $250,454 about $250 annually. Enter your home’s value in the tax calculator to see the exact savings for your situation.
Here are a few ways Shutesbury might lower taxes on its homeowners.
Remove Extraneous Line Items from the Annual Budget
This year’s Town Meeting revealed that town officials have been keeping debt payments in the budget after the debt is retired and using the money to prop up the town’s savings. The amount in question, $112,695, remains in the budget and adds $0.50 to the tax rate and $125 to the annual average single-family tax bill. This is your money that the town is sitting on.
Whether we build a new library or not, the $25,000 line item for the Library Building Fund could be removed from the budget. This would save taxpayers $0.11 on the tax rate and approximately $28 on their tax bill.
Repeal the Community Preservation Tax (CPA)
In a recent blog post, I advocated for repealing the Community Preservation Act tax because great sums of money are accumulating but not being used. Each year, Shutesbury levies an additional 1.5% on the tax you would pay on the value of your home minus a $100,000 exemption. Using the average house value of $250,454 and the fiscal year 2021 tax rate the formula looks like this: :
($250,454 - $100,000) * $22.61/$1,000 of value * 1.5% = $51.03
A non-binding poll on this question appeared on NextDoor Shutesbury recently. It is not too late if you wish to opine on this issue.
Downsize Town Government
Shutesbury’s cost of government is high compared to its population. Despite a reduction in both taxable parcels and the number of residents, our budget continues to increase.
As the population declines the size of town government should as well. Salaries and hours could be reconfigured once incumbents have left or retired. Some positions were made full-time, possibly with the expectation that the number of residents would increase; perhaps they could revert back to part-time. Shutesbury could look to other towns with similar populations and compare how their various positions are structured and funded.
A reduction in salaries would also decrease the cost of benefits, including health insurance—for which Shutesbury currently pays $520,000 yearly.
Cutting the General Government budget line by just 10% would net a $56,370 annual savings based on the fiscal year 2022 budget. That would shave $0.25 off the tax rate and save the average homeowner $62.
Regionalize the Elementary School
A big chunk of Shutesbury’s budget is dedicated to education. The Amherst-Pelham Regional system line item is $1,611,136, a reduction from the prior year of nearly $65,000. This reduction was achieved by skillful negotiation on the part of Shutesbury’s School Committee to make our town’s portion more equitable and in line with State Statute.
The Shutesbury Elementary School line item stands at $2,238,079 for fiscal year 2022. Though the School’s website states that it serves 125 children between Preschool and Grade 6, that number has dropped to 112.
Is regionalization the answer? I am no expert on school issues, but the statistics make me think that considering the issue should be pursued. A 10% decrease in the elementary school budget would net a savings of $223,808 based on this year’s budget. That is approximately a $1.00 reduction in the tax rate and a savings of $248 annually on the average tax bill.
Assuming that regionalization does not entail making Shutesbury the new regional school location, the empty SES building—with its large parking lot and a new roof—would be a boon for the town. There is ample space for storage, community gatherings, exercise, computer, and even cooking classes. The building could be renovated to accommodate many uses—including a new library.
Incorporating all four of these proposals would take $514 off of the average tax bill.
Some of these changes will take time to implement while others could be voted on at the next annual Town Meeting—meaning we could soon take the first steps toward improving affordability for all Shutesbury residents. That’s us, folks!
Savings at-a-Glance
Are your housing costs too high? Use Cent$ible Shutesbury’s new handy-dandy Affordable Housing Calculator to find out!
Weekly Factoid:
Massachusetts Per Capita Income, 2020: $78,458
Source: Federal Reserve Bank of St. Louis
Shutesbury Per Capita Income, 2020: $25,299
Source: Massachusetts Division of Local Services
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