LONGMEADOW — Historically, Longmeadow has adopted a single tax rate for all property owners in town and the Select Board chose to do so for fiscal year 2025 at its Dec. 2 meeting. However, not all members of the board are satisfied with this strategy.
Principal Assessor Maria Cataldo presented the Select Board with their options for setting the FY25 tax rate. She explained that the town’s levy is the amount of taxes that must be raised in the fiscal year. In FY24, Longmeadow levy was $56.37 million. A municipality’s maximum levy is determined through a calculation set out by the state. A fiscal year’s levy is found by using the previous year’s levy as a base. In Massachusetts, municipalities can add up to 2.5% of that figure to the following year’s levy, as well as any taxable new growth and debt exclusions. Longmeadow’s FY25 levy is $64.12 million, $7.75 million more than last year’s.
Similar to establishing the levy, the estimated tax rate is calculated using a formula. The FY25 levy is divided by the assessed value of all properties in town and then multiplied by 1,000. With a single tax rate, where all properties pay the same rate, this brings Longmeadow’s FY25 tax rate to $21.12 per $1,000 of property value, up 44 cents from last year’s rate of $20.68 per $1,000 of value. The average single-family homeowner, with a property valued at $502,755, will owe an extra $227 over the year.
However, the town has a few options in how the tax burden is distributed among properties. The first option is creating a split tax rate in which up to 50% of the tax burden would be shifted from residential properties to commercial and industrial ones. In a town like Longmeadow, where 93% of properties are residential, a burden would be shouldered by relatively few taxpayers and the benefit for residential properties would be spread over many people, weakening its impact for each residential taxpayer.
Cataldo said a split rate makes sense for communities where 30% or more of the properties are commercial or industrial. Less than that, the outsized tax burden is expected to have a chilling effect on businesses moving into or remaining in town.
There is also an option to shift the tax burden away from owner-occupied residential properties and toward rentals. Further, properties housing small businesses with 10 or fewer employees and a value of less than $1 million can receive relief with a tax shift toward larger business properties. The “residential exemption” suffers from the same issue as a split tax rate, with about 3% of residential properties are not owner-occupied. On the other hand, only three properties would be eligible for the small business exemption. There is also an exemption for “open space” properties, but there are none in Longmeadow that adhere to the legal definition for eligibility.
Cataldo recommended a single tax rate with no shifts.
Select Board member Mark Gold has long been a proponent of a split tax rate. “I have the presumption … that commercial properties in town are undervalued,” Gold said. “The rate of increase in value of commercial properties significantly lags the rate of increase in value of residential properties.
Because sales of commercial properties are rare in Longmeadow, values have been assessed using rental income as a metric. Gold said evidence of this can be found with last year’s sale of The Longmeadow Shops for $30.4 million, despite an assessed value of $20.2 million in 2022.
Cataldo said that when The Longmeadow Shops sold, there were six demolition or remodel permits that had been pulled for projects at the property, and suggested the higher sales price reflected an expected value increase due to the work slated to be done. In line with this, she said The Longmeadow Shops is currently assessed at $29 million.
The other commercial property that was sold, an office building on Dwight Road, was assessed for $10 million and sold for $5 million, leading to the town giving the owners an abatement, Cataldo said. Levine said office spaces, which make up a significant portion of Longmeadow’s business properties, have seen a drastic decrease in sales since COVID-19 forced many people to work from home. He said he was concerned about deterring businesses from operating in Longmeadow, particularly as surrounding municipalities largely use a single tax rate.
Lam commented that inflation has also hurt commercial property owners and said he thought a single tax rate was best. Zwirko agreed, saying that he appreciated Gold’s point, but a split rate “doesn’t make sense for Longmeadow.”
Gold maintained, “A split rate isn’t necessarily to give relief to residential,” but to make commercial and industrial properties pay their share.
When it came time for a vote, he was the sole voice of dissent.
