2012 city of lawrence tax classification
TRANSCRIPT
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CITY COUNCIL
BUDGET & FINANCE SUB-COMMITTEE
TAX CLASSIFICATION PRESENTATIONNovember 30, 2011
Presented ByThe Board Of Assessors
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The Classification Act Requires Municipalities To Classify Real Property IntoOne Of Four Classes, According To Use: Residential, or Commercial,Industrial, And Personal Property (CIP).
Cities That Are Certified as Assessing Property at Full And Fair Cash Value May
Elect to Shift Tax Burden Among The Major Property Classes Within CertainLimits Established By Law.
The Bureau Of Local Assessment Have Certified Lawrence as AssessingProperty at Full And Fair Cash Value.
The Adoption Of Different Rates DOES NOT CHANGE the Total Property Tax
Levy. Rather it Determines The Share Of The Total Levy To Be Borne By EachClass.
The Minimum Residential Factor Established By The Commissioner OfRevenue Ensures That the shift of the tax burden complies with theClassification Act.
BACKGROUND
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Step 1: The Bureau of Local Assessment have certified Lawrence as assessing property at full and
fair cash value
Step 2: The Board of Assessors will provide the councilors with information to select the
residential factor toward the determination of the rate for each class of property.
A limited set of possible choices will be provided by the Board of Assessors, but CityCouncilors may, if desired, explore other tax rate combinations that meet their needs.
Step 3: City Councilors are required to determine the percentage of the tax levy to be borne by
each class of real property: residential, commercial, industrial and by personal property(CIP). The decision is made after holding a public hearing.
The Conclusion of the hearing MUST result in a vote of required choices
Step 4: The split tax rates for Fiscal Year 2012 are certified by the Department of Revenue
Step 5: Mail 3rd quarter actual bills January 1, 2012
CLASSIFICATION/ TAX RATE PROCESS
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Lawrence Completed The Triennial Revaluation (Once
every 3 Years) for all Real and Personal Property asRequired by DOR For FY 2012. This Revaluation ensuresthat changes in market conditions are Reflected in theCurrent Assessment.
CURRENT STATUS
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SINGLERATE
YES
NO
RESIDENTIAL &CIP RATE THE
SAME
PREVIOUS YEAR LEVY
LIMIT
+
2-1/2 %
+
GROWTH
+OVERRIDES
DECISIONS BELOW
DO NOT CHANGE
LEVY
LOWER
RESIDENTIAL RATE&HIGHER CIP RATE
HIGHER
RESIDENTIAL RATE&
LOWER CIP RATE
MAXIMUM SHIFT OF TAXBURDEN TO CIP & LOWEST
RESIDENTIAL TAX RATE
1.75
VERY HIGHRESIDENTIAL
TAX RATE
HIGHLOW
CITY OF LAWRENCE - BOARD OF ASSESSORS CLASSIFICATION HEARING
DETERMINE
LEVY
FACTOR
(1.00- 1.75)
5
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New Growth is a calculation of the net increase in municipal property valuesbecause of new construction, improvements to properties, subdivisions, condoconversions, the return of exempt property to the tax rolls or new personalproperty accounts as well as new personal property equipment at existing
locations. New Growth is added to the Citys Levy Limit, thereby increasing the Citys
taxing capacity.
Assessors must submit documentation of New Growth to the Bureau of LocalAssessment annually and receive approval prior to setting the tax rate.
The assessed value of real estate and personal property New Growth during thetwelve-month period January 1, 2010 to December 31, 2010 is $54,200,000.
This Growth translates into $1,388,208 of increased tax levy capacity over thebasic limits of Proposition 2 .
WHAT IS NEW GROWTH?
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Levy is the amount the City raises each year through Property Taxes .
The Levy Limit is the Maximum amount the City can levy. FY 2012 TaxLevy Limit increased by $2,672,250 over FY 2011.
Excess Levy capacity is the difference between the Levy Limit and the
Actual Levy.
LEVY, LEVY LIMIT & EXCESS LEVY CAPACITY
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Levy Summary
FY 2011 Levy $49,642,351
FY11 Amended Growth $41,935
Prop 2 1/2 Increase $1,242,107New Growth $1,388,208
Overrides $0
FY 2012 Maximum Levy $52,314,601
FY 2012 Proposed Levy $52,314,601
Excess Capacity $0
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Values are based on Sales in Calendar Year 2010
The residential values decreased by 0.70% andcommercial/industrial increased by 0.78%.
The City of Lawrence Total FY2012 Property value is $2.843Billion. This is a 0.39% decrease from FY 2011.
The average single family home assessed value in FY 2012 is$176,836. This is a $1,413 decrease from FY 2011 averageassessed value of $178,249.
FY 2012 VALUES
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PROPERTY VALUE CHANGE 2011 VS. 2012
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Total Real Property Value FY2011 $2,705,022,200.00
Total Real Property Value FY2012 $2,693,646,700.00
Real Property Value Change ($11,375,500.00) -0.42%
Residential Property Value FY2011 $2,193,228,846.00
Residential Property Value FY2012 $2,177,867,654.00
Residential Value Change ($15,361,192.00) -0.70%
Commercial Property Value FY2011 $308,416,654.00
Commercial Property Value FY2012 $313,314,846.00Commercial Value Change $4,898,192.00 1.59%
Industrial Property Value FY2011 $203,376,700.00
Industrial Property Value FY2012 $202,464,200.00
Industrial Value Change ($912,500.00) -0.45%
Personal Property Value FY2011 $149,199,370.00Personal Property Value FY2012 $149,378,760.00
Personal Property Value Change $179,390.00 0.12%
Total Value FY 2011 $2,854,221,570.00
Total Value FY 2012 $2,843,025,460.00
($11,196,110.00) -0.39%
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LARGEST TAXPAYERS
10
$37,161,700
$34,267,130
$27,707,960
$25,460,810
$17,716,600
$14,682,500
$13,770,630
$13,240,430
$11,778,200$10,098,600
$205,884,560
Total Assessed Valued
Verizon New England Inc
Mass Electric
Bay State Gas
Bouwfonds Jefferson LP
Lincoln Andover LLC
New Balance Athletic Shoe
Hampton on Beacon
Chi Energy Inc
Lawrence/Methuen Props
Princeton Andover
Total
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Tax Levy
FY 2012 Maximum Allowable Levy = $52,314,601
FY 2012 Estimated Levy = $ 52,314,601
FY 2012 Estimated Excess Capacity= $0 Total Value
FY 2012 Total Value = $2,843,025,460
FY 2012 Residential Value = $2,177,867,654 or 76.6039% of TotalAssessed Value.
FY 2012 C.I.P. Value = $665,157,806 or 23.3961% of Total AssessedValue.
Single Tax Rate $18.40 / $1,000
TAX LEVY- SINGLE TAX RATE
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Shifting allows the City to reduce the Residential Classes(R.O.) tax burden while increasing the C.I.P. tax share.
The combination of the two tax classification amounts
must equal the total property tax.
The chosen Factor for FY2011 was 1.75,which provided formaximum Tax Shifting, as allowed by law, from Residentialto C.I.P.
Continuing with a Factor of 1.75, the residential tax rate forFY 2012 would be $14.19, a $0.74 increase over FY 2011. Thecorrespondent C.I.P. tax rate for FY 2012 would be $32.20, a$1.79 increase over FY 2011.
THE FACTOR - SHIFTING DEFINITION
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Total Levy FY 2012
$52,314,601
Shift Determined Based on (1.75) C.I.P. Tax Share =40.9432%
New C.I.P. Levy amount $21,414,740
Residential Tax Share = 59.0568%
Residential Levy Amount = $30,895,318
Residential Tax Rate
$14.19 / $1,000
C.I.P Tax Rate
$32.20 / $1,000
THE FACTOR- SUMMARY
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FY 2012 TAX LEVY BREAKDOWN
Factor= 1.75 Valuation % Tax Share %
FY 2012
Residential $2,193,227,846 76.7590% $29,451,930 59.3282%
Commercial $311,487,554 10.9015% $9,470,575 19.0776%
Industrial $203,376,700 7.1178% $6,183,536 12.4562%
Personal $149,199,370 5.2217% $4,536,310 9.1380%
Total $2,857,292,470 100.0000% $49,642,351 100.0000%
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Factor= 1.75 ValuationValuation
% Tax ShareTax Share
%
Residential $2,177,867,654 76.6039% $30,895,318 59.0568%
Commercial $313,314,86 11.0205% $10,089,304 19.2858%
Industrial $202,464,200 7.1214% $6,519,713 12.4625%
Personal $149,378,760 5.2542% $4,810,266 9.1949%
Total $2,843,025,460 100.00% $52,314,601 100.00%
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Various Tax Rate Factors are shown below
Other choices are possible and can be shown if desired. Asa reminder, a factor below 1.75 will increase the residential
tax bill.
CHOICE OF TAX RATES
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Residential
Factor
RO
Rate
RO Change
$ From 2011
C.I.P
Rate
C.I.P.
Change $
From 2011
1.75 $14.19 $0.74 $32.20 $1.791.74 $14.24 $0.79 $32.02 $1.61
1.73 $14.30 $0.85 $31.83 $1.42
1.72 $14.35 $0.90 $31.65 $1.24* All $ are per $1,000 of Assessed Value
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Below is a comparison of a factor of 1.75 and 1.72
FACTOR COMPARISON
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Class Avg Value TaxRate
Avg Tax Avg Value TaxRate
Avg Tax Delta $ Delta %
Res $186,769 $13.45 $2,512 $185,138 $14.19 $2,627 $115 4.58%
Com $316,416 $30.41 $9,622 $321,371 $32.20 $10,348 $726 7.54%
Ind $1,001,856 $30.41 $30,466 $965,790 $32.20 $31,098 $632 2.07%
Res $186,769 $13.45 $2,512 $185,138 $14.35 $2,657 $145 5.76%
Com $316,416 $30.41 $9,622 $321,371 $31.65 $10,171 $549 5.71%
Ind $1,001,856 $30.41 $30,466 $965,790 $31.65 $30,567 $101 0.33%
Factor of 1.75 Factor of 1.75
FY 2011 FY 2012
Factor of 1.75 Factor of 1.72FY 2011 FY 2012
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OTHER FACTORS IMPACT
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OTHER FACTORS IMPACT (CONT.)
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AVERAGE TAX BILL IMPACT ANALYSIS
FISCAL YEAR 2012 VS. 2011 (1.75 Factor)
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AVERAGE TAX BILL IMPACT ANALYSIS
FISCAL YEAR 2012 VS. 2011 (1.73 Factor)
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AVERAGE TAX BILL IMPACT ANALYSIS
FISCAL YEAR 2012 VS. 2011 (1.71 Factor)
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AVERAGE TAX BILL IMPACT ANALYSIS
FISCAL YEAR 2012 VS. 2011 (1.70 Factor)
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AVERAGE TAX BILL IMPACT ANALYSIS
FISCAL YEAR 2012 VS. 2011 (CONT.)
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PROPERTY TAX ANALYSIS CLASSIFICATION
AVERAGE VALUE FISCAL YEAR 2012 VS. 2011
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* 1.75 Factor
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Full Council Vote on the Classification Factor
Upon the Commissioners determination that the percentages meet statutoryrequirements and the public hearing has been held, the assessors will submitto the Bureau of Accounts the local tax rates for final approval.
Councilors certify the excess levy capacity on recap. (Form LA5). This willhappen after full Council Meeting.
WHATS NEXT?
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DISCUSSION
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CONCLUSION OF CLASSIFICATION
PRESENTATION
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