Local taxes – THE AMHERST CURRENT

Public money for private property owners? Yes!

By Sarah Marshall

This Monday, the Town Council will hold a public forum on the Community Preservation Act Committee’s (CPAC’s) grant recommendations for the next fiscal year. Later in the evening, the Council is scheduled to vote on most of the recommendations.

Almost all are likely to be approved, in my estimation, but two of CPAC’s recommendations have triggered concern among Councilors, specifically grants for repairs to the Alice Maud Hills House and the Conkey-Stevens House. At the heart of the concern is whether public money should be awarded to private property owners, either non-profits (such as the Woman’s Club, owners of the Hills House) or homeowners (Salem Place Condominium Association, owners of the Conkey-Stevens House). As chair of CPAC, I enthusiastically support both projects – indeed, all the project recommended to Council. (Note that this blog post is my own opinion, not approved by CPAC.)

Both properties are listed in the National Historic Register and are within local historic districts. The Alice Maud Hills house, at 35 Triangle St. but facing Main Street, is a neighbor (more or less) to the Emily Dickinson Homestead and the Evergreens. The Conkey-Stevens House, at 664 Main St., is a one-of-a-kind Second Empire structure in East Amherst. Both buildings require exterior work that exceeds the financial capacities of their owners.

It is helpful to understand the Community Preservation program before saying more about these two particular projects – but if you are already familiar with the CPA, you can jump ahead.

Where do the CPAC funds come from? Amherst citizens repeatedly voted to tax themselves – three times since 2001 – in order to participate in the program enabled by the state’s Community Preservation Act. Property owners pay a surcharge, or tax on the property tax, of 3% (the first $100,000 of assessed value is exempt). That is, for every $100 assessed in property taxes, an extra $3 goes into our Community Preservation Fund. The Commonwealth contributes additional dollars yearly to the participating cities and towns; the precise amount varies, year to year, but the state matched 39% of the Town’s FY2021 collection to the fund for FY2022.

Why did voters agree to raise their own taxes? Because voters support the goals of the program, which are to fund projects addressing affordable housing, historic preservation, acquisition of open space, and development and improvement of recreational amenities.

Over the past 20 years, approximately $18 million in CPA money has been invested in numerous Amherst projects. Examples include:

In the Community (i.e., affordable) Housing category, the purchase of land on Belchertown Road, funding for the Valley CDC project at 123 Northampton Rd. (“East Gables”), conversion of market-rate rental units at Rolling Green Apartments to affordable units, and grants to Amherst Community Connections’ transitional housing initiatives;
In the Open Space category, funds for the redesign of the northern part of the Town Common, contributions to the purchase (completed just last week) of the Hickory Ridge Golf Course, purchase of land (now under conservation) such as the Szala and Keets-Haskins properties, and funds for improvements to trail networks;
In the Historic Preservation category, preservation efforts at Town Hall, funding for the Special Projects facility in the Jones Library expansion and renovation project, funds for building envelope repairs and/or foundation repairs at the Munson and North Amherst libraries, restoration of the Tiffany window at the Unitarian-Universalist Society of Amherst, restoration of the Civil War tablets, and exterior repairs to the Goodwin Memorial AME Zion church;
And in the Recreation category, funds for the playgrounds (sometimes matched with grant funding) at Kendrick Park, the playground and spray park at Groff Park, and repairs to basketball courts and pools at Town recreation areas.

Who decides what grants to award? CPAC is responsible for soliciting, reviewing, and recommending grant applications. In the past, CPAC’s annual report was submitted to Town Meeting, but now it goes to Town Council for discussion, public comment, and a vote. Those bodies have sole power to authorize town spending. The enabling statute allows Town Council to reject a recommendation or reduce the size of a grant, but Council may not increase a grant or award funds to projects not recommended by CPAC.

Who serves on CPAC? The law directs several boards and commissions to delegate representatives to CPAC. Thus, CPAC members come from the Amherst Housing Authority, the Historical Commission, the Conservation Commission, the Recreation Commission, and the Planning Board. The Town Manager also recruits candidates for three at-large seats.

But back to the Hills House and Conkey-Stevens House. Both applications were strongly supported by the Amherst Historical Commission. CPAC and the commission spoke publicly about the clear eligibility of privately owned properties for CPA money, emphasizing that the “public benefit” to the taxpayer, as far as the law is concerned, need only be the view of the exterior from the street or sidewalk. The commission urged Councilors to consider Amherst’s many historic structures as an outdoor museum through which citizens roam. They noted that private property owners are usually not eligible for grants to preserve their historic properties, and that the Community Preservation Act deliberately includes them.

North Amherst Community Farm’s farmhouse

No precedent would be set by approving an award to the Alice Maud Hills House. CPA grants have been made to private not-for-profit entities in Amherst numerous times. Churches, the Jewish Community of Amherst, the farmhouse owned by the North Amherst Community Farm – even the Hills House’s Carriage House – have received grants.

What may be novel in Amherst is granting taxpayer dollars to a private homeowner. The Council is concerned about a possible flood of applications, and wonders whether private owners should be held completely responsible for maintenance of their historic structures. On behalf of CPAC, I noted that all program applicants compete for funding, that many projects are not approved, and that private owners are welcome in the program. Personally, I believe that since these private owners are providing a benefit to the rest of us, and ownership of historic properties is both inherently expensive and subject to many constraints, the public should be willing to help pick up the tab occasionally.

One concern raised by Councilors is how to secure the taxpayers’ contribution to the property, should the property be sold or demolished, for example. This a reasonable concern and one that should be readily resolved by language in the agreements between the Town and applicants. As mentioned above, grants that benefit properties not owned by the Town have been made on numerous occasions already.

Readers may want to know about the other grants CPAC recommends for FY23. We recommend new grants totaling approximately $1.833 million, as well as debt payments of about $490,000 for projects voted in earlier years, and $25,000 for administrative expenses. We also recommend reserving about $533,000 for future CPA uses.

In brief, CPAC is recommending that funds be granted to:

the Town to assist in the purchase or rehabilitation of a property to be used for transitional housing,
the Town to fund a part-time housing projects coordinator,
the Amherst Municipal Affordable Housing Trust to enable it to fund projects as they arise – perhaps, soon, at the East Street School site and the Belchertown Road property acquired a year ago – and for a part-time consultant,
the Town to conduct repairs at one of its affordable housing sites, the John C. Nutting building,
the Amherst Historical Society so that it can conduct an engineering and structural assessment of the Museum,
the Town for continued repairs to the West Cemetery,
the District One Neighborhood Association, with the assistance of the Conservation Department, to begin work on a history trail along part of the Mill River,
Crocker Farm School for design work on upgrades to or replacement of a playground,
the Town to improve the irrigation system at the Plum Brook playing fields,
the Town for some trail work at the Hickory Ridge property,
the Town for general repairs and improvements to its trail network,
and to Amherst Pickleball Supporters, with the assistance of the Recreation Department, to build two or more pickleball courts.

I look forward to seeing these projects come to fruition!

Public Forum: Monday, March 21, 6:30-7:00 p.m. Zoom link: https://amherstma.zoom.us/j/81560508561

Amherst should get more money from UMass and the colleges

By George Ryan and Nick Grabbe

When a UMass student leaves the campus and gets in trouble, the Amherst Police Department, paid for primarily by Amherst taxpayers, deals with him.

When an Amherst College student goes to Town Hall to register to vote or get a passport, the salaries of the clerks who help her are paid through Amherst property taxes.

When a Hampshire College professor gets in a car, the cost of paving the roads, clearing the snow and maintaining the stoplights comes mostly from the budget of the Amherst Department of Public Works.

And yet Amherst receives very little from these three institutions to help pay these necessary expenses, which run in the millions of dollars, because their land and buildings are exempt from local property taxes. This is one of the main reasons why the average residential tax bill in Amherst is among the highest in Western Mass. And next spring, residents will be asked to raise their taxes even further to pay for a desperately needed new elementary school.

Meanwhile, the previous Town Council has made substantial commitments that will have big financial consequences. They include:

Creating two new departments;
Implementing efforts to realize our energy and climate goals;
Exploring reparations for African American residents harmed by past injustice;
Addressing long-delayed infrastructure and capital needs;
Funding four major building projects.

In addition, Amherst is committed to maintaining the high level of Town services that residents have come to expect. All these commitments will put serious pressure on the Town’s budgets for the foreseeable future.

Difficult and painful decisions will have to be made. Some staffing goals have been deferred and may have to be abandoned, such as funding a staff position to oversee downtown parking, hiring an economic development director, or increasing the number of inspectors to enforce a stricter rental registration bylaw.

New sources of funding will be essential if we are to meet these ambitious goals. One key will be continued new growth, to enable the Town to raise revenue beyond the limits of the state’s tax-limit law. And that will mean more development, especially downtown and in village centers, and that in turn will require zoning reforms such as allowing duplexes by right.

But that will not be enough. Amherst needs to engage at the highest level with the three academic institutions in town to identify ways they can contribute to the Town’s long-term flourishing. It is in their interest, in terms of attracting faculty and students, to have a host community that people want to live in. The quality of Amherst’s schools, roads and cultural activities are important to those decisions.

Town officials are already having “productive conversations” with campus representatives, said Finance Director Sean Mangano. Town staff are also comparing the financial contributions of the three campuses with those of Williams College, UMass/Dartmouth and UMass/Lowell, and the Universities of Connecticut and Vermont to their host communities, Mangano said.

And the Town Council has made developing strategic partnership agreements with all three institutions a key goal for the town manager in 2022. He is tasked with entering into agreements that will seek to mitigate the financial and social impacts the three campuses have on the Town and also exploring possible collaborations in areas of mutual concern, such as housing, economic development, and the long-term financial viability of the Town.

In addition, there are efforts to get state legislation to formalize payments to towns that host state facilities. Amherst’s Finance Committee is working with the principal assessor to estimate the value of land and buildings on our three campuses.

Credit Ryan Mercer, Burlington Free Press

What are some examples of town-gown collaborations? Burlington, Vt. is especially noteworthy. In 2019, the city received $1.38 million from the University of Vermont to help pay for municipal services, and $94,000 to pay for police patrols near the campus, according to vtdigger.org, an independent news source. The city also received a commitment of $8.9 million over 20 years to cover the debt service on a sustainable infrastructure plan.

The University of Iowa contributed $200,000 to a city-sponsored program that bought properties and resold them to individuals who met certain income guidelines. The University of West Virginia provided forgivable down payment assistance for its employees who participated in a city home ownership program. Lehigh University agreed to share the cost of the salaries for code enforcers to ensure that their students were living in safe, healthy off-campus housing. Duke University bought, rehabilitated, and sold 40 houses to faculty and staff.

So what sorts of payments do our three institutions of higher learning currehtly make to the Town? This past year, after many years of negotiations, UMass contributed $185,000 to the elementary and regional schools to help pay the cost of educating children who live in its tax-exempt housing. In addition, it makes an annual payment of $160,000 as “occupancy fees” in lieu of an occupancy tax at the Campus Center Hotel, and it reimburses the Town for police and fire support; in 2021 that was $400,000.

Amherst College, which has an endowment currently valued at $3.7 billion, recently made a one-time gift of $200,000 to help support the Jones Library expansion and renovation project and to help pay the costs of the Drake, the live performance space (though assistance the Drake doesn’t help the Town budget). Amherst College also makes an annual contribution to the local schools (in 2021 it was $75,000) and, unlike UMass, it does pay property tax on some of its properties in Town, especially off-campus faculty residences. In 2021 that property tax bill came to $649,449. And like UMass (whose statewide endowment in 2021 was $1.2 billion), it reimburses the Town on an annual basis for ambulance and fire calls. In 2021, that annual “support fee” came to $140,000.

These payments, while welcome, are not adequate to meet the demand that our academic institutions place on Town services. Amherst College or UMass could show what good neighbors they are, and get much favorable publicity, by paying some of the costs of making our new elementary school zero-energy, for example.

And while Hampshire College’s financial situation might preclude contributions, it does have substantial land holdings in South Amherst and could be a key player in increasing housing opportunities and economic development in that part of town.

All three institutions also possess vast reservoirs of intellectual capital and youthful idealism that could be put to work in our schools and in the larger community. They are essential partners in keeping Amherst flourishing and financially sound. These conversations will not be easy, but they are vital to the future well being of our community.

A civil conversation, part 1

By Andy Churchill and Meg Gage

[Note: this is the first in a series of respectful conversations from different points of view about Amherst issues. Please send any ideas for topics to the editors.]

Meg: So, Andy, what did we get ourselves into here? I do appreciate the opportunity to dig into our different perspectives about Amherst issues and controversies. We worked well together on the Charter Commission, although we were on opposite sides of a bunch of big issues. How about you?

Andy: Hi Meg – yes, we differed on the Charter, but we’ve also found common cause on some key issues, like the need for a new elementary school. And we’re both concerned about Amherst being divided into separate, hostile camps that don’t talk (and more importantly, listen) to each other. I hope we can do better than the national scene in that regard!

Meg: Yes! But, Andy, let’s not be too chummy or this point/counterpoint isn’t going to be very interesting for anyone to read! Let’s talk about downtown. Amherst property taxes are too high – in large part because of fixed, structural facts – a huge amount of tax-exempt property in the colleges and University (later let’s talk about whether they contribute enough PILOT!) lots of conservation and APR land. So, our town leaders are looking at redesigning our downtown to bring in more taxes. But I feel there’s been quite a bit of cart before the horse in that thinking. It sometimes seems the town is willing to build anything that appears profitable regardless of the impact.

Andy: Whoa – slow down a little! There’s a lot packed into that little paragraph.

Meg: OK – fair enough. Say more . . .

Andy: It’s important to make the connection between the services residents are asking for and the revenues we have to pay for them. When I was on the School Committee I became increasingly worried about where the money would come from to pay for our kids’ education, along with all the other things we want, including public safety, roads, sidewalks, libraries, recreation, elder services, social services – the list goes on and on.

Meg: I agree, so far. We want a lot of things that are expensive!

Andy: Our ability to pay for those things is constrained, as you note, by large amounts of tax-exempt land. So, we need to do the best we can to generate revenue from the remaining parts of town. And to keep the full burden from falling on residents’ property taxes, that means we need commercial development somewhere. Our Master Plan says we should focus commercial development in the downtown and the village centers, to avoid sprawl in the rest of town. So encouraging appropriate, taxable development in downtown is important, both to support the services Amherst residents want and to keep the tax burden from going even higher. Do you agree?

Meg: Yes, I do, although we might not agree 100% on what constitutes “appropriate” development. I definitely agree the downtown is a large part of the solution. But it’s not development at any cost. We should be able to build profitable buildings that are not eyesores, don’t injure the streetscape, and house businesses where year-round residents – i.e. not only students – will hang out and spend money. Let’s encourage downtown activity that will generate income for the town, without destroying the downtown we all cherish.

Andy: Okay. Do you think others on “your side” feel the same way? Do they see development in the downtown as part of the solution? It makes a big difference if we’re actually talking about HOW we should develop downtown rather than fighting about IF we should develop it. I think there’s a lack of trust among some on “my side” about that – often it seems like people raise objections to the process or the details of a project as a way of stopping it, not because they are really interested in making it better.

Meg: I truly think the difference is more about HOW to develop rather than whether to develop. That said, my “side,” such as it is a “side,” has a wide range of opinions on the downtown. However, I believe most of the people I identify with want to use good planning tools and updated assessments of how the 21^st Century economy works to create a rejuvenated and successful downtown where people want hang out.

Andy: Well, I hope those people include students, because I think they are key to our fiscally sustainable future. More on that below.

In terms of “eyesores” downtown, you may be surprised that I agree with you that 1 East Pleasant, the big building by Kendrick Park, is pretty clunky in its design. Although when I realize that it and its triangular sister (which I like) bring the town almost $2 million in taxes every three years – it starts to look a bit prettier! I do give credit to the developers, Archipelago, for figuring out how to build things again in Amherst, where most others had thrown up their hands and said, “These people are impossible.”

Meg: Have you seen the affordable housing building in Northampton at 155 Pleasant Street? It is a very large 4-story building with 23 affordable units. It is set back from the sidewalk and has an attractive design. Why can’t we build housing like that in Amherst? (Maybe Archipelago needs better architects??)

Andy: Yes, I’ve seen that building – it looks nice in that context; I wonder if it would look the same in ours. But I agree with your larger point, which is that we need some design standards to guide future development. I just want to make sure we are actually focused on generating that new development, which we are going to need to fund the services we want for our town without soaking the residential taxpayers, and not just throwing up roadblocks to make it unprofitable so it won’t happen at all.

Meg: I think most people who have raised questions about development are unhappy with what appears to be unexamined options and inappropriate building style, scale and landscape. People want to know that various options have been considered. Also, some people feel the developers and the BID are calling the shots and there’s little room for additional input and different points of view. For example, I don’t think people on my “side” are automatically opposed to a parking garage, but feel that we shouldn’t change zoning for a specific location until we’ve established the need and scale and considered all possible locations.

Andy: Okay, but I am tired of hearing for each new building, “Where is the parking?” I don’t think we want to encourage individual parking lots for each new project, and requiring underground parking for each building increases costs and makes projects less affordable. Centralized parking is a core feature of developing vibrant downtowns. I love going to Northampton and knowing that there’s a place for me to park where I don’t have to figure out in advance how long I’ll be there. It’s welcoming, and it lets the streetscape serve pedestrians, not cars.

Meg: Yes, I love the Northampton parking garage too — where the coffee is strong and so are the women! But is Amherst proposing student parking because the new buildings don’t have any? We need to unpack that. I know we each have more to say on this topic, but we’re running out of space here. In a future chat, I’d like to talk about the idea of “two sides,” more about the balance between retail and housing, the role of the arts, and form-based development. And do we have the courage to look at how the Charter that we both worked on has turned out?

Andy: Sure, and I would also like to explore our attitudes toward college students. I feel like some vocal folks in town (and I don’t believe you are one of them!) like living in a college town but would prefer if it had no college students in it. On the contrary, I feel like the students are a great resource that we should do a better job of leveraging for the town’s benefit.

Meg: Very funny! A college town with no college students! Yes, I like both living in a college town and living with students around. They make life interesting – at the peak of the recent windy snowstorm, several of our North Amherst student neighbors were in their front yard playing beer pong! So many things to talk about – all useful to unpack! Looking forward to the next round.

Andy: Okay, let’s reconvene soon for Round 2 and continue to argue about – I mean, discuss – the good, the bad, and the ugly of downtown Amherst!

Why is my tax bill so high?

By Nick Grabbe

Amherst homeowners have until Feb. 1 to pay their typically hefty property tax bills. These bills are the heftiest yet, and I’ll try to explain why in simple, easy-to-understand terms. Don’t be late in paying these bills; interest at an annual rate of 14 percent starts adding up on Feb. 2.

Q. If the fiscal year runs from July 1 to June 30, why are these quarterly bills higher than the ones that were due on Aug. 1 and Nov. 1?

A. Those earlier bills were estimates of your annual tax obligation, based on the previous fiscal year’s values and a projection of the tax rate. The new values and the actual tax rate were not set and certified until December, a lag that happens every year. So most of the annual increase in your taxes must be paid in the bills due Feb. 1 and May 1.

Q. How much are my annual taxes going up?

A. It depends on the assessed value of your property, but the average single-family home’s annual tax bill is going up from $8,194 last year to $8,609 this year.

Q. What’s the math behind those numbers?

A. The average assessed value of a single-family home in Amherst in the previous fiscal year was $375,507 and the tax rate was $21.82 per $1,000. This year’s average value is $404,763 and the tax rate is $21.27. Tax rates usually decrease when the average property value increases.

Q. That’s an increase of 5 percent in the average annual tax bill. I thought taxes couldn’t go up by more than 2.5 percent under state law.

A. State law does limit the amount a town can raise in taxes to 2.5 percent, but allows it to further increase by the amount of taxes raised by “new growth.” The extra wrinkle this year is that residential values have been rising more than commercial values, partly because of the pandemic, so a larger share of the tax burden is now borne by homeowners.

Q. Yes, I’ve heard that the real estate market went crazy last spring, with sale prices often higher than asking prices, with multiple buyers bidding prices up and houses. Have things stabilized a bit?

A. A bit. Asking prices have been very similar to sale prices lately, said Finance Director Sean Mangano. Last spring, sale prices of single-family houses were averaging about $500,000, or 28 percent above their assessed values. The last few months, the average sale price has gone down, but it’s still above $450,000, and about 20 percent above assessed values. All single-family sale prices in the past 10 months are listed in “Recent House Sales” in the main menu of this blog.

Q. Are condominium prices increasing as fast as single-family houses?

A. Yes. The average condo is on the market for only two to three days before it’s sold, Mangano said.

Q. I heard that Amherst’s taxes are twice what they are in Hadley. Is that true?

A. Almost. The average residential tax in Hadley this year is $4,467, and the tax rate is only $12.18 per $1,000. Because of a much bigger commercial sector, Hadley homeowners bear a much smaller percentage of the tax burden than in Amherst. In addition, Hadley chose to give homeowners a break this year by establishing a higher tax rate for commercial property than residential property.

Q. Northampton is more similar to Amherst than Hadley is. What are its taxes like?

A. The average residential tax bill in Northampton this year is $6,303, which is an 8.6 percent increase over last year. Northampton, though it doesn’t have a commercial sector like Hadley’s, has a significantly bigger one than Amherst, so the business sector absorbs a greater share of the tax burden.

Q. Why are taxes in Amherst so high?

A. There are three main reasons. First, a large percentage of our land is exempt from property taxes, chiefly because of campuses but also because of conservation areas and farmland that can’t be developed. Second, we have high expectations for municipal services; for example, we have a low teacher-student ratio in our schools, and we believe in paying our public employees well. Third, because of our very small commercial sector, residents are responsible for 90 percent of the property taxes that Amherst collects.

Q. How does Amherst’s average residential tax bill compare with other Massachusetts cities and towns?

A. In recent years, we have ranked about 55th among the 351 cities and towns. The average property tax bill in Massachusetts in fiscal 2021 was $6,374. The only town in the Pioneer Valley with higher property taxes than Amherst is Longmeadow ($9,388).

Q. Why are assessed values lower than sale prices?

A. In a hot market like Amherst’s, it’s difficult for assessments to keep up with changes. The schedule for re-assessing property also contributes to the lag. Some properties are re-assessed ahead of that schedule, because a sale has established their values, or a homeowner has taken out a building permit, or a property hasn’t been inspected in some time.

Q. If I have a higher assessment, is that what causes my taxes to go up?

A. No. Assessments merely redistribute the tax burden based on the actual market. Assessments and the tax rate operate like a seesaw; when one goes up, the other typically goes down. But annual tax bills on a property rarely go down, because the amount of money the Town must raise always goes up. An assessed value might decrease if a house is damaged, as in a fire.

Q. Are property assessments going to be increased to more accurately reflect sale prices?

A. Yes. Town officials are required under state law to do a total revaluation in the fiscal year starting July 1. Increases could be across the board, or higher in some neighborhoods or styles of housing. While assessments will increase, the tax rate will likely continue to decline.

Q. How can I find out my assessed value?

A. In the middle of the top of your tax bill, it’s listed under “Total Taxable Valuation.” You can find the valuation for any address by going to amherstma.gov, clicking on Departments, then Assessor, then Online Data Base, then entering the address.

Q. I don’t want to go to Town Hall to pay my taxes because of the pandemic. What should I do?

A. If you don’t want to mail your payment, there’s a secure drop box on the Main Street side of Town Hall. You can’t pay your taxes over the telephone.

Q. Can I pay my tax bill online? Can I arrange for my taxes to be automatically taken out of my bank account?

A. Yes. The information on how to do this is included in a fact sheet that came with your tax bill.

Thanks to Town Councilor Andy Steinberg, Finance Director Sean Mangano and Principal Assessor Kimberly Mew for contributing to these answers.