Taxing our town

Last night, while ML was at her 'opt for happiness' meeting, I was at loose ends. I opted for an informational meeting of our town's taxation committee.

Our town, like most, has struggled with property tax issues in recent years. A revaluation a couple of years ago, done on the cheap, angered a bunch of residents. Sensing an opportunity, a couple of fellas campaigned on 'tax fairness' issues, and got themselves elected to the board of selectmen. Like most towns with this form of government, the selectmen are also the 'tax assessors and overseers of the poor'. But, knowing the sensitivity of tax issues, these newly elected gentlemen ducked, or at least postponed the heavy lifting they were elected to do, by forming a 'taxation committee' to study the whole issue.

The committee was charged with three goals: 1) make taxes equitable, 2) comply with state law, and 3) preserve the rural character of our town. At the meeting they referred to this charge as 'balancing the three legged stool'. Of course it's not rocket science to see that these three goals might be in conflict. In fact, this conflict is what caused all the problems to begin with.

Our town's tax policy has been to value buildings at market value, to value base building lots fairly cheaply and to value 'excess land' - land over the base building lot - very, very cheaply. This policy was based on the clear desire of the townsfolk, as determined by a couple of surveys and codified in the town comprehensive plan, to preserve the rural character of the town, i.e, keep large tracts of forest and farmland intact.

Because of this policy there is a wide variation in the ratio of a parcel’s assessed value to its presumed market value. Small lots with expensive buildings have the highest ratio. Large parcels of raw land, especially unbuildable ones, have the lowest ratio. The committee picked this variability as a measure of tax ‘fairness’. The conclusion of the committee is that our system now is too ‘unfair’ as measured by this ratio.

State law mandates that all land shall be valued at its highest and best use – basically, its market value. While it can be argued that this is ‘fair’, it seems to be more and more widely accepted that this is bad tax policy. Coastal towns in particular, have seen this policy drive residents out of their long-held waterfront homes, because they can no longer afford to pay their ‘fair’ taxes when ‘the market’ of mostly well-healed newcomers is willing to pay astronomical prices for their land. Still, as state law now stands, our town’s assessments are very far from legal. It is conceivable that if any taxpayer or taxpayers get too disgruntled, they might bring successful legal action against the town.

It seems almost inevitable that this process, now that it has started, will end up increasing the relative tax burden on large landowners. How much it increases, and how many of them who are pushed by the increase to sell or subdivide remains to be seen. Meanwhile, those of us who care will search for other tools to preserve open space.

Nonetheless, it was a revelation and a delight to hear how many of my fellow townsfolk were willing to stand up at this meeting and say that they liked the town the way it is, that our current tax policy was working to keep it that way, that they felt it was ‘fair’ to subsidize large landowners, rich or poor, who were keeping our open space open in the same way that is ‘fair’ for childless couples and retirees to help fund the education of the towns children. It gives me hope for the future of our little town.