City Officials to Set New Tax Rates This Week

The City Council will meet in a special session with Mayor Ted Bettencourt and city finance officials Tuesday to set the new 2014 property tax rates for homeowners and businesses in Peabody.

City assessors said this past summer during budget talks that property values had remained stable again and projected a $59 average tax increase for homeowners to cover part of the budget increase.

Bettencourt also said he was committed to spending $1 million from the city's free cash account to avoid a greater tax hike.

Without any major changes to that financial plan, it would ensure residential taxes in Peabody remain among the lowest in the region with most homeowners paying less than $3,600 a year in property taxes.

The increase last year was $95 on average. The value of an average single-family home in Peabody last year was $307,200 while the average owner-occupied home was $289,900. The new values used in setting the tax rates will be as of Jan. 1, 2013.

The tax classification hearing will be held at 7 p.m. on Dec. 5 in Wiggin Auditorium at City Hall. Bettencourt, Finance Director Patricia Schaffer and Chief Assessor Susan Antonellis will make a presentation, followed by a vote from the council.

The current rates, which are for calendar year 2013, are $11.98 for residential and $23.57 for CIP (commercial, industrial and personal property). The rates are per $1,000 of valuation.

The split rate between residential and CIP is due to tax classification, which the city uses to offset the burden on homeowners but also to achieve equity so that both residential and CIP properties see about the same percentage tax increase from year to year.

For 2013, the classification factor puts 62.5 percent of the burden is on homeowners while 37.5 percent is on CIP. Otherwise, under an equalized tax rate, average homeowners would have payed a lot more while business owners would have payed a whole lot less.

For the past few years, the city has published a brochure for residents to explain how taxes are calculated, answer the age-old question of why taxes go up when property values go down and other aspects to the tax classification process.

The brochure is available on the city’s website (the 2014 brochure will be posted sometime after Dec. 5), in paper form at City Hall or at the Torigian Center and public libraries.