2012 City of Lawrence Tax Classification

8/3/2019 2012 City of Lawrence Tax Classification

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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

2November 30, 2011 BOARD OF ASSESSORS CLASSIFICATION HEARING


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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


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


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

November 30, 2011 BOARD OF ASSESSORS CLASSIFICATION HEARING


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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%


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


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


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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FISCAL YEAR 2012 VS. 2011 (CONT.)



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PROPERTY TAX ANALYSIS CLASSIFICATION

AVERAGE VALUE FISCAL YEAR 2012 VS. 2011


* 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

27November 30 2011 BOARD OF ASSESSORS CLASSIFICATION HEARING

2012 City of Lawrence Tax Classification

Documents

Transcript of 2012 City of Lawrence Tax Classification