Chelmsford Property Taxes Go Through the Roof

I just got my jaw-dropping 3rd quarter real estate tax bill. Chelmsford now has the distinction of being the 44th most expensive town in Massachusetts, far ahead of Tewksbury (144), Billerica (203), Tyngsboro (107), Westford (110), and even just ahead of Carlisle (51).*

What's causing the inflation-beating, salary-outstripping relentless rise in our property taxes? It's a story of compound interest. The town continues to increase its tax rate year to year by the maximum permitted by the state: 2.5%. So regardless of whether the value of your house goes up or down, it's irrelevant. The tax rate for the assessed value of your house is compounding at 2.5%.

That means if the assessed value of your house is 500K, you're currently paying $2,460 ($17.95 per $1,000) per quarter. If the trend continues, in 5 years, you'll be paying $2,719. In 10 years, you'll be paying $3,080. In 15 years, you'll be paying $3,490. If this continues unchecked, Chelmsford could be one of the most expensive towns in Massachusetts within a decade. One underlying problem is the town’s refusal to consider taxing commercial property at a higher level than residential.

What is soaking up the money? You'll have to ask the Town Manager and Selectmen. Also speak to the Assessor's office and the Treasurer/Collector. One reason is the capital budget: pouring tens of millions into a sewage system while neglecting other critical infrastructure, particularly the electrical grid and street lights. The school system, while good, is not outstanding or comparable to Westford's, for example. Another probable cause: the generous pensions that town employees enjoy but few residents do.

*Source: The Massachusetts Executive Office for Administration and Finance

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Townie January 06, 2014 at 05:53 PM
I actually thought it would be against our constitutional rights not to be able to recall town officials, but looked it up and only certain states allow it and we're not one of them. This is disgusting - because they need to go! I've been hearing from neighbors and friends all day and to say they dislike the current town manager and BOS is an understatement! I can't even use some of the language used to describe these people. Personally, Kurland makes my skin crawl and he's not even on the board.
Rob C January 06, 2014 at 06:29 PM
With prop 2 ½ in place does anybody seriously expect their taxes to go up any less than the allowed 2 ½ or even at least stay the same. This is MA where everything costs twice as much as it should and where it seems like the primary job of government is to take as much of its citizens money away from them as they can get, so what do you expect to happen? Just be thankful we have prop 2 ½ in place. The argument against raising taxes on commercial property doesn’t make sence to me. The owners of the buildings just pass that along in rent and the last I saw driving around we have very few empty spaces now. With the total cost of moving a business, I don’t see anybody moving out over a few dollars rent increase to cover taxes. The fire station did need to be replaced but that location next to town hall is insane. Corner of Wilson and Chelmsford st made the most sense mostly because it is a flat lot to build on and good central location. The contractor that made the $500K mistake on his quote in my opinion needs to suck it up and take the loss. He knew the site location of the building he was bidding on and if he screwed up his bid then it is not our problem. But then again this is MA where contractors routinely get away with the old bid low, bill high routine when dealing with the government.
Michael M. Ross January 06, 2014 at 08:10 PM
In an ideal world, the property tax rate would be a fixed percentage calculated against the market value of the house and the annual income of the owner. Any law that enshrines the tax rate can go up forever - regardless of real estate values and personal incomes - is inherently wrongheaded and self-defeating.
Rob C January 06, 2014 at 08:25 PM
The annual income of the homeowner should have nothing to do with anything when it comes to property tax. The homeowner is already taxed on his income when he earns it, not by the town but by the state and the feds. If you want to try and institute a local income tax, good luck with that. Even here in MA I think the people would revolt at the implementation of a town income tax. If somebody makes a million a year and buys a house next door to me valued at the same as mine, why would/should he have to pay more than I do for the same thing? If your income is so low that you can no longer afford the taxes on your property then maybe you should re-consider your living situation. To me it sounds more of the same "fair share" class warfare garbage that we have been hearing too much of lately.
Jon Kurland January 07, 2014 at 06:59 AM
Tyler - Here is my last thought about the tax issue and it is more about seeking solutions than anything else. If we reduce our FY 2014 budget of about $111,000,000 by $1,000,000 it will result in the average single family homeowner saving $70 per year. If people want meaningful tax reductions, how many millions need to be cut and where do those cuts come from? With respect to your question about Town Moderator, please check out my response here. http://chelmsford.patch.com/groups/politics-and-elections/p/voters-will-have-a-choice-for-town-moderator-this-spring
Michael M. Ross January 07, 2014 at 08:29 AM
Meaningful tax reductions can only come when people realize what a very bad idea it is that the rate of taxation can be allowed to increase year after year on people’s homes. Homeowners need to understand that the reason they pay more and more year to year has nothing to do with the value of their homes – their percentage rate of taxation is actually increasing on the same assessed value. It's not a sustainable path for it to be legal and somehow "normal" to tax a larger and larger share of people’s homes. It says to those who spend taxpayer's money that they will always have, by right, an increasing share of homeowner's income, regardless of economic circumstances. This is unlike any other kind of taxation I can think of. For me, it's that simple.
Townie January 07, 2014 at 09:28 AM
We need tax relief and it's up to our elected officials to figure it out! Can you imagine a home or business operating this way? There are things that are nice to have and then there are necessities! There's way too much influence from the CBA and people who have family members working for the town. We need a split tax rate!
John Doe January 07, 2014 at 09:58 AM
"We need tax relief and it's up to our elected officials to figure it out!" Townie, you couldn't be more right...and wrong. Our current elected officials are NEVER going to give any tax relief and it is not even in their minds to look for it. The only way that Chelmsford can stop our ridiculous downfall is by electing new people who are not part of the insiders club. However, when these people run, like Laurie Mayers...they get threatening phonecalls from the insiders and drop out of the race.
Roland Van Liew January 07, 2014 at 09:58 AM
The first step is to admit that costs are too high, which the insiders will never do. Will Paul Cohen or Pat Maloney ever explain why our capital projects regularly cost some 50% more than the regional average? The second step is to look at how to manage finance better. For example, the town manager refused to consider utilizing the stabilization fund for even part of the new fire station's cost, so interest payments -- which gain the taxpayer NOTHING but have to be paid each year -- are unnecessarily high. I love to hear the ignoramuses (including the T.M.) talk about the "bond rating." A relatively small amount utilized from the stabilization fund would NOT affect any bond rating, but it would affect the tax rate. And any bond rating does not save you money if you borrow unnecessarily. But, I guess all that has nothing to do with "municipal finance," which is a specialized discipline wherein you only examine how to increase revenue, not control costs.
Townie January 07, 2014 at 10:20 AM
Mark my words, they will put someone up to run against Bob Joyce, who by the way, should be detailing what changes he would like to see in lowering our tax burden, but he's being very quiet. I thought Janet would be a step in the right direction, but she's now just seems to go lock step with the rest of them now. Laurie Myers would have been great! I was so disappointed when she dropped out. They are looking for town meeting reps, but no one wants to deal with these people (the insiders, posse, whatever you want to call them.). It's our town and we should take it back! Then this other B.S... having a town manager that doesn't live in the town and never has; the Chairman of the BOS working as realtor in town, then that whole Eliopolous/9 North Road thing, I could go on and on.
Rob C January 07, 2014 at 10:20 AM
Anyone on here actually think for one second that if the town does split the tax rates that they will pass along the savings to the homeowners? I have a feeling that much like every other level of government, they will find a way to spend that extra money “for our own good” and our taxes will continue to rise at the rate they are rising now, regardless of who is elected and what they say their position on it is during the campaign.
John Doe January 07, 2014 at 01:19 PM
Back in 2010, the average homeowner should have seen their tax bill go down by about $328. This is because the school bond and the sewer bond were both expiring. But conveniently, thats when the DPW and Fire Station proposals came up. That way instead of going down over $300, Cohen could claim they would "only go up $14". And when the voters shot down the Fire Station and DPW, the sewer bond creatively got "extended", so taxes would stay high until the DPW station passed. Because if they didn't extend the sewer bond, taxes would have gone down by the $328 and people would have seen the true tax cost of the DPW and Fire Station...but hey, whats a few million between friends, right?
Townie January 07, 2014 at 02:38 PM
Oh the games! They must think we're all stupid, but maybe we are by putting up with it! Our property taxes went up by over $200.00 for this quarter - moved back here in 2000 because it was affordable! We won't be able to retire here that's for sure!
John Doe January 08, 2014 at 09:53 AM
Townie...Im afraid you better move out now, before property values drop...because nothing in this town is going to change. Not enough people care to vote and the people who vote the most are the friends and family of the insiders. They also changed the rules at town meeting so that another recall election is virtually impossible. Sorry for the bad news...we should all just move out and let the insiders have their town...see how things work out when they have 1,000 vacant homes...
Townie January 08, 2014 at 10:46 AM
Yup, we're talking about that now and it's a shame! My great grandfather helped build this town and my mother warned about what she called "the blow-ins", which I thought was kind of mean. She didn't mind new families, but then there were the ones who moved in and thought they would save the Chelmsford natives from themselves. She has since passed away, but her words are haunting now. We now have a town manager that has never lived here and then there's the New York lawyer, that always has alot to say.
Chelmsford Man January 08, 2014 at 07:02 PM
We need a tax revolution in this town. Why are the BOS so afraid to go a split tax rate. Other towns in the area do and I don't see the businesses leaving their towns. We should also get a Manager who leave in the town where he keeps raising the taxes.
Roland Van Liew January 08, 2014 at 07:18 PM
The BOS are surely very concerned about the Chelmsford Business Association, which was formed specifically to repeal the then-existing split tax rate, and now makes sure "classification" (split tax rate) stays dead. As for getting a Town Manager who lives in town as required by the Town Charter, folks have to stop re-electing the incumbents who not only renew the town manager's contract, but grant waiver after waiver from the residency requirement. You see, they want to keep him because he's such a "superstar," even though he can't manage the town without these continual tax hikes on homeowners that are way above 2.5%. More like 50% over the past decade. Don't you wish your salary had gone up 50% over the past decade?
Tyler Jozefowicz January 08, 2014 at 07:29 PM
Rob C. What a nitwit statement to make. The split rate causes the commercial sector to pay a larger and justifiable proportion of whatever the allotted property taxes are . Looks like you a coyly trying to protect the business community at the expense of the 80% residential tax payers, and just wondering out loud to dissuade the overburdened home owners, many on fixed income. Businesses earn income , residential owners don't . That is what justifies a split rate . If you are opposed to a split rate , just come out and say it instead of playing games here with everyone.
Townie January 08, 2014 at 07:33 PM
I totally agree, Chelmsford Man, it's our town and we should demand fiscal responsibility; but as Roland says the CBA, and Harrington in particular, have a huge influence over the policies and decisions made in this town and then there's a bunch of insiders who have friends, family and relatives working for the town and prospering on our backs. No one will want to move here with the current tax rate, so goes our home values. The $$ is going to salaries, pensions and benefits and not on our roads or schools. We need some kind of reform and we need a strong money manager managing the town, not Paul Cohen! I wish we could just become a city and then we could elect a mayor - lets just say I don't thing Cohen would be elected by the residents.
Rob C January 08, 2014 at 07:49 PM
Tyler, Which specific statement did I make that was "nitwit"? Where did I say I don't want a split rate. Go back and carefully read my three posts on here. I am for it, I specifically said that they can suck it up and pass along the expense. And out of curiosity, if residential owners don't earn income, what do they earn?
Townie January 08, 2014 at 07:53 PM
Rob C. has a point! They would never pass on any savings to the homeowners. They'll find a way to spend it! We all should meet at the town offices on 2/1 with our tax bills, at the same time, and send them a serious message that we've had enough!
Tyler Jozefowicz January 08, 2014 at 08:11 PM
Rob C: very difficult to converse with someone that lacks elementary comprehension.: your coy statement that if the town adopts a split rate it will not be passed on . That statement. Here is why : all taxes after they are levied and collected are put in the general revenue stream; because commercial will be paying more, that would be less that the residential taxpayers need to incur( even if its small change) . Tell everyone here whether you support a split tax rate in plain language or not. my impression is that you are a snitch for CBA , trying to dissuade everyone here. Like I said you play coy but I'm not letting you off the hook.
Rob C January 08, 2014 at 08:37 PM
Townie apparently understood what I meant. I already said twice I am for it. I also said that just because the town has that extra pile of cash collected from the commercial property that they will find a way to spend that extra pile of cash on something else that in their opinion "we need", instead of passing along the savings to me, the homeowner. From what I have seen in all levels of government, if they have extra money, they will find a way to spend it instead of taking less away from the people. And when they need more for something, they always take more away from the people instead of looking to see if there is something that could be cut to pay for the other thing, like us homeowners have to do on a regular basis. I don't think I can state my stand on this issue any clearer than I just did.
Townie January 08, 2014 at 08:48 PM
I agree with you, Rob C. You definitely have a point! Apparently, you were too subtle for Tyler and he is taking it as you being coy. I agree that if they gained any additional revenue due to a split tax rate, they would not pass savings on to us, they would spend it on something else. Typical government! However, because of the influence of the CBA, we'll never see a split tax rate unless some serious changes are made.
Tyler Jozefowicz January 08, 2014 at 09:07 PM
Rob C. The town will not have "an extra pile of cash" and there will not be an additional amount of revenue DUE TO a split rate ; the town will always levy 2 1/2 % by law , and receive that absolute amount of property tax revenue, so your premise is flawed. A split rate will only mean that commercial will pay more by virtue of the split rate and possibly the residential will pay somewhat less. The argument to distract people is that (1) due to valuations, the condo owners will pay slightly less because their valuations went down and the residential single homeowners will absorb that difference, and (2) since the base is only 16% commercial , a split will result in insignificant revenue dispersion. Town needs more of a commercial base and the current BOS has been unable to deliver. Several, Askenberg, formerly Dahlberg, and possibly Lane, all campaigned on a promise to increase the commercial base and have not delivered. as an aside , and not to take up time here, I attribute most of that to external forces, foreign outsourcing and less resident technical companies. So in other words , the CBA rules.
Rob C January 08, 2014 at 09:48 PM
My belief is that if they split it, they will increase the commercial rate and leave the residential rate the same as it is now, resulting in the town having an extra pile of cash and us homeowners will continue getting it in the rear end. Now with the extra cash pile from the commercial property they have two options: one, split it up and send out the difference to the homeowners or two, spend it. I say they do number two. I arrive at this conclusion because I believe that they would never lower a persons tax (this is MA after all) and like any government they will see that they have extra cash and do what the government always does with extra cash and spend it on things we don't need. If you want to believe that they will raise commercial and simultaneously lower the residential to keep the tax income the same, then you are welcome to that thought. If you think that, you may be interested in this bridge I have in NYC that is for sale.
Roland Van Liew January 08, 2014 at 10:36 PM
Folks, remember, Prop 2.5 limits the total tax levy -- commercial and residential combined. So if commercial taxes go up, residential taxes must go down (given that they levy the maximum 2.5 aggregate already). Even if there was a classification differential of, say, 8% then the residential rates would go down about 2%. That would mean the increase this year would still be 3.5, well above the 2.5 max target. That indicates that commercial property values have plummeted -- again! -- relative to residential property values in Chelmsford. This did not occur in Billerica, where commercial properties remained flat relative to residential properties, so homeowners in Billerica are seeing a 2.58% increase as compared to Chelmsford's 5.5% increase. You're probably as sick as I am of hearing that "it's like this everywhere." No it's not. In any case, the biggest problem is bad policy, even more than the lack of classification. We have an arrogant town manager mired in the platitudes of his 30-year-old "growth solves everything - build, build, build" Harvard B-School "urban planning" education.
Tyler Jozefowicz January 09, 2014 at 10:02 AM
Rob C. The property tax levy will be increased by the maximum 2 1/2% each year, given past history. This will result in an absolute amount of cash in dollars from property tax revenue. The split rate will reshuffle the commercial /industrial , residential/single units /condos mixes, but will NOT result in "an extra pile of cash" beyond the 2 1/2 levy.
Rob C January 09, 2014 at 01:33 PM
Tyler, Leave increases out of the equation and look at it on a yearly basis. Here it is super simplified. In hypothetical Chelmsford there are 1,000 properties 800 residential, 200 commercial and somehow they all ended up to be valued at the same price. They currently all pay the same in taxes, $100 a year. That gives the town $100,000 a year to operate. Now if we split the rates and say the commercial properties now have to pay $150 a year. That extra $50 that they are collecting from the 200 commercial properties results in a $10,000 pile of cash, the town now has $110,000 coming in. Now the town has 3 basic options on what to do with this 10 grand. Option one, bill residential properties $87.50 or send each a check for $12.50 and continue to operate at 100K, option two stick it in the bank for future capital expense/payoff any debt and continue to operate at 100K or option four, spend it and operate at 110K a year. To me personally, option one is ideal and what should be done, two is acceptable but not preferred, but three is what will happen with that extra pile of cash. Governments in general avoid at all costs reducing taxes on its people. Remember, the people of MA voted in a binding referendum to have our income taxes reduced and we were all given a big middle finger by the state government. I fully expect to see another big middle finger from the local government if they end up splitting the tax rate and have to make a decision on whether or not to tax me less or spend more.
Tyler Jozefowicz January 09, 2014 at 03:24 PM
That is not the way it works as I understand it. The Commonwealth lets the towns know on the cherry sheets published every August the state contribution . Towns assess their various tax rates based on that. Then town assessment takes into consideration the State money,aid to local cities and towns , lottery money, etc., other revenue and grant sources, etc., and assesses the tax rates for the different classifications of property, TAKING INTO CONSIDERATION any split commercial tax formulas; can then up the levies no more than 2 1/2% after that. This is all done BEFORE bills are sent and any" piles of money" accrue . The rates adjust for the various tax classifications BEFORE any piles of money are received. The pie is mixed( tax classifications ) but the size ( total levy) remains the same. Maybe you want to talk to someone else at this point rather than me. That is my take.


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