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Mayor Josh Garcia talks about the proposed shift factor to set the tax rate for Holyoke next year.
Reminder Publishing screen capture by Tyler Garnet

HOLYOKE — On Dec. 17, the City Council voted on the shift factor that set the tax rate for residential and commercial properties.

Mayor Joshua Garcia recommend adopting a shift factor of 1.75 and stated that this adjustment will significantly reduce both residential and commercial rates while keeping the average single-family tax bill increase to a manageable level.

The City Council voted on the proposed shift decreasing the residential tax rate to $17.46 and $38.54 for commercial.

Currently, the residential is $18.95 and the commercial tax rate is $40.26.

Garcia said for the first time in years, favorable shifts were presented and as a result, a significant reduction of tax rates for both residential and commercial properties were seen.

Although the tax rates decreased, the average single-family home tax bill will still increase by $304.16, or approximately $25 per month.

Garcia said this increase is primarily driven by rising residential property values, coupled with higher costs for insurance, schools, transportation and contractual obligations.

Those factors include, increases in salaries through budget per negotiated union contracts and 2% COLA increases for non-union employees reflected in the Schedule A of the City Ordinances.

For retirement, COLA increased by $291,762, totaling $12,563,043. The funding includes an increase from $14,000 to $15,000 in the COLA base for eligible retirees.

Additionally, Holyoke has a long standing commitment to fully funding the retirement system by 2032, which requires allocating approximately $8 million annually beyond the standard retirement budget.

Health insurance increased by $1,189,535, totaling $13,084,880.

With the School Department there was a 13% local contribution increase, totaling $22,887,823 and the required local contribution increased by $730,977, totaling $13,183,748.

HPS Transportation and leases were increased by $2,298,207, totaling $10,435,052.

Garcia talked about the process and said, “The council’s decision to set the tax rate shift is critical. Setting the tax rate shift is among the most challenging decisions the council faces each year. I am confident that with their thoughtful deliberation and commitment, we will continue to make incremental progress toward a fiscally sound and prosperous future for our community.”

Despite some of the perspective shared by members of the council and community, Garcia said, he highlighted some accomplishments and substantial progress the city has made.

Those accomplishments included not relying on free cash or reserves to reduce the levy amount, balancing this year’s budget without depending on federal ARPA funds and budgeting conservatively and collecting more local receipts than anticipated to strengthen Holyoke’s free cash position.

Garcia said this provides Holyoke with greater flexibility to address shortfalls and invest in critical capital needs.

Garcia said he is looking forward the fiscal year 2026 budget planning and is committed to exploring strategies to alleviate taxpayer burdens in the next fiscal year.

He said, “I am committed to exploring strategies to alleviate taxpayer burdens in the next fiscal year, particularly by re-evaluating contributions toward the retirement funding schedule. Holyoke’s aggressive approach to retirement funding has been essential, but we must balance it with the need to provide relief to taxpayers.”

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