TOWNSEND — Home and commercial property valuations did not drop during the most recent revaluation, according to Greg Barnes, town administrator.
Townsend bases the fiscal year 2009 property tax bills on the sale prices from calendar year 2007, according to Vicki Tidman, Townsend’s assessor. Fiscal year 2009 began July 1.
Home prices dropped during 2008, meaning residents may have a higher property valuation than the actual market price for their homes, Tidman said.
“We’re kind of behind,” Tidman said.
Barnes expects a large drop in valuations for the 2008 calendar year, which will impact the 2010 valuations and tax bills.
“If the property values go down, the tax rates will go up,” Barnes said.
Proposition two and a half sets the tax levy, the amount a town can raise in taxes, and allows that to go up 2 and a half percent every year. Because the taxes are based on that tax levy, and not property values, towns can continue to raise taxes based on the levy amount even when values drop, Barnes said.
Barnes expects to see more residents apply for property tax abatements, a way to drop their tax bills. Townsend budgeted $129,000 to pay for tax abatements in the 2009 fiscal year.
“As times get harder, people are not as able to pay,” Barnes said.
The town could lose more money to property tax abatements in the 2010 fiscal year, Barnes said. He expects the economy to continue to worsen and financially hurt residents.
The money lost to the abatement process will have to be made up by the remaining taxpayers, Barnes said.
“It’s a zero-sum game,” Barnes said.
Barnes expects the town to see a drop in revenues as more people are simply unable to pay their taxes.
“The ability to collect tends to deteriorate during a (recession),” Barnes said.
Townsend will likely lose money in car title taxes, fees and state aid going into the 2010 fiscal year, Barnes added.
“It’s hard to believe there won’t be a decrease in state aid,” Barnes said.