Peabody Homeowners Can Expect $94 Average Tax Hike

The main takeaway from Thursday night's tax classification hearing is that taxes in Peabody are going up $94 on average for homeowners, a near identical increase to that of last year.

The City Council set the new tax rates at $12.40 for residential and $24.46 for commercial property. With the average homeowner's property valued at $287,700 that's an average bill of $3,567 for Peabody taxpayers in 2014.

That's also still guaranteed be among the lowest annual bills in Essex County -- Peabody was fifth from the bottom in 2013.

Conversely, the average commercial, industrial and personal property (CIP) value in Peabody is $1.36 million and equates to a $33,349. That's a 2.7 percent hike for residential and a 3.9 percent increase for CIP. Rates are per thousand dollars of valuation.

The city's operating budget increased $5.4 million from Fiscal 2013 and to pay for that along with state and county assessments, residential tax abatements and other charges, the city will rely on a mix of property taxes, state aid, local receipts and city reserves.

The total amount to be covered is just shy of $151 million and represents a 2.78 percent ($4.1 million) increase over last year. There was a significant reduction in state and county assessments on health insurance for 2014, which is why the total increase is less than the increase to the operating budget.

The city will reduce the burden on taxpayers by using $1.5 million from its free cash account, which was recently certified at just over $13 million.

Councilors Dave Gravel, Anne Manning-Martin and Barry Osborne pushed back against not using more money from reserves this year, asking when it was going to be time to give taxpayers a break.

Mayor Ted Bettencourt said the city had some major spending coming due soon, such as its share of construction costs on the new regional vocational school and the city's new middle school, that could significantly draw on the city's reserves and certainly necessitate maintaining the city's high bond rating for borrowing.

More to come on this story.