Re: Re: [LexTMMA] Commercial Assessments

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Joel Adler

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Sep 28, 2016, 7:01:10 PM9/28/16
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Eph,
           You sound like an apologist for the status-quo. As I understand things, there is more than one method that can be used to assess the commercial segment. The BOA uses an income approach that is accepted and approved for use  by the DOR. We are told that the DOR examines all assessments, both residential and commercial, prior to granting certification to the Town. If we were to use a method similar to that employed by the real estate experts that the Town used to appraise the Liberty Mutual building, we would have received real estate taxes that perhaps would have been twice what we received using the income method. The income method used with commercial assessments is clearly not producing valid assessments for tax purposes. If that were the case, we would be purchasing the Liberty Mutual property for $ 2 million and not $ 4.3 million, as we are. If the income method we use were accurate we could have taken this property by eminent domain for $ 2 million and successfully supported that price in land court, perhaps with the assistance of the DOR. You don't really think that I could approach the Great and General Court, all by myself, with some hope of our receiving approval of a new method to be used to accurately assess commercial property, do you?  I see your suggestion as rather off-putting and perhaps worse.

          Joel Adler  Pct. 1  TMM
 
 
On 09/28/16, Ephraim Weiss<ephw...@gmail.com> wrote:
 
Joel,

In accordance with current state law, businesses are assessed in a different manner from that of residences.  Residences are assessed at market value.  Businesses are assessed based on some business characteristic, which enables them to get a much lower assessment than market value.

Businessmen seem to have much more to say about laws than residents.
If you’re unhappy about this arrangement, this inequity can only be changed through legislation.  So get your state legislators involved, and put pressure on your legislators.

-  -  Eph Weiss

P.S. - Somebody please forward this to Mike Barrett, who is not in my district.  Thanks.


On Sep 28, 2016, at 4:33 PM, Joel Adler <jan...@verizon.net> wrote:

Sam,
           One way to increase the equity of the residential tax load is to increase the equity of the commercial property assessments. I pointed out from the floor of Town Meeting that we are about to pay $4.3 million for the Liberty Mutual building, a property that the Town of Lexington has judged to be accurately assessed at $1.9 million. This is not an isolated case of what appears to be a consistent process of under assessing our commercial properties. The only feedback I received after my statement, came from a knowledgeable TMM who complimented me for raising the issue, as we both left Battin Hall at the end of festivities. 

            Joel Adler Pct. 1 TMM
   "Everyone is entitled to his own opinion, but not his own facts."    Daniel Patrick Moynihan
 
 
On 09/28/16, Sam Silverman<smp...@verizon.net> wrote:
 
Many years ago, in the dense mists of antiquity, in 1957, I came to that small town called Lexington, as I started a new job. The population was somewhat less than it is today, but was steadily increasing, matching the population increase of Greenland. It finally stabilized at about 30,000 +/- 2 or 3 thousand. The property taxes continued to increase at about 5% a year, more or less. But the town expenses,  especially those for the schools, kept increasing at greater levels. So problems arose: how to pay for increases without increasing voter dissatisfaction too much. So at first this was solved by eliminating school programs, or introducing fees for service. Thus some programs were saved, and items like school buses. But problems continued. The Commonwealth came to the rescue, with the allowance of what were called enterprise programs, for water, sewer, recreation. These programs had been formerly included as integral parts of the town budget. As such they provided certain tax ad advantages as offsets -- how this worked I don't know, not being a tax attorney. As fees for service, however, those tax advantages disappeared. I remember at one town meeting asking Jackie Smith, then a Selectman, if they really weren't what had been called property taxes earlier. She agreed. So, by simply changing the name they became revenue enhancements.

But even this was not enough. So developers began to argue that they would reduce the residents taxes by these large industrial payments. They never provided actual proof that this would happen -- in fact, it never did happen. A resident's property tax continued to increase at the same average rate over time no matter how much these commercial developments contributed to our budget. So these revenue enhancements turned out be ways of spending more than otherwise would have happened. Even the passage of a state law limiting something or other to 2.5% a year seemed to have no effect -- debt was excluded from the limitation. And what used to be a fearful thing at town meeting became a normal and increasing thing over the years.

So there is a constant search for revenue enhancements to the town budget, often labelled as fees for service. Now the logical (and absurd) outcome of the process is to put, for example, all school programs, history, mathematics, etc., on individual bases of fees for service. Thus a parent can choose the subjects that he wants his children to be taught -- thus eliminating the resentment he may feel at subjects that he believes don't belong in the curriculum.

And, by the way, I think I heard at the Special Town Meeting  that planning for future property taxes was based on an annual increase of 5%.

So, to summarize: any proposals for fees for service are basically proposals for revenue enhancements outside, and in addition to, the normal budget. In my opinion we don't need additions to a budget disguised as fees. We need rather to look at keeping expenses down -- more efforts at conservation, or provision of solar power, as examples, and making such efforts a primary focus of our planning.

Sam Silverman, Pct. 5


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Ephraim Weiss

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Sep 28, 2016, 7:12:26 PM9/28/16
to Joel Adler, Sam Silverman, Lexington TMMA List
Joel,

We have repeatedly been told by the Assessors that the current method is the only one that can be used in accordance with current law.  
That does not meet with my approval.  I have a right to my opinion, but I cannot change the facts.
If there is a better (according to you or me) method that can be lawfully used, we have not been told about it.  The Assessors report to the Selectmen, who make policy.
Perhaps you have a better legal way of changing the assessment method?

-  -  Eph Weiss

Frank Sandy

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Sep 28, 2016, 8:06:50 PM9/28/16
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   The income method is a valid tool to assess commercial property IF it is used correctly.  Commercial real estate investors also use the income method to determine the value of property they are interested in purchasing.  However, as Joel has pointed out, in Lexington real estate investors have frequently purchased properties at twice their assessed value.  Both the investors and the Town have used the income method to determine the values of those properties.  Clearly one of them is wrong and has used the income method incorrectly.  I believe it is the Town that is using the income method incorrectly and so consistently comes up too low assessed values.

Frank Sandy

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andrei radulescu-banu

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Sep 28, 2016, 8:20:02 PM9/28/16
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> The Assessors report to the Selectmen, who make policy.

Hi Eph, the assessors report to the Town Manager, but policy for how assessments are made is driven by the state Dept of Revenue, thus even the Town Manager does not have a lot of say in regards to assessment methods. Your point about complaints needing to be directed instead to the State Legislature was correct, if inconvenient to hear.

Regards,
Andrei Radulescu-Banu, Pct 8

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Andrei Radulescu-Banu
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617.216.8509 (m), 781.862.5854 (h)
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Vicki Blier

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Sep 28, 2016, 8:31:58 PM9/28/16
to Ephraim Weiss, Joel Adler, Lexington TMMA List
Two things to consider:

1. The property tax rate for commercial properties is *almost double* the rate that residential property owners pay. So this serves to mitigate any sins due to assessing  commercial properties using the the accepted income/expense methodology. (and the "income" is not the business' income, it's the rental income that the building would generate if it were a rental property--- plus other factors that are beyond my ken)

2. Each year the Town puts an amount of money into an account called the Overlay. The Overlay Account is a budget line item for the purpose of covering tax abatements.  In other words, when a home owner asks for an abatement, or a commercial property takes the town to court, this line item will pay for the abatement or any court decision against the town.  
When the town loses a court decision regarding a commercial property assessment, that money is lost to the town. It is post-rate setting money and therefor does not get recouped by the town in any way whatsoever.
Therefor there is very good reason to stay within accepted methodologies when assessing commercial properties where the revenue lost to a suit can be quite substantial.... but at least we make up for the lower assessments that may result from the income/expense method by taxing commercial properties at almost double the rate that we tax residential properties.

Vicki Blier
Pct. 9




     

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George Burnell

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Sep 29, 2016, 8:55:56 PM9/29/16
to Joel Adler, Eph Weiss, Sam Silverman, TMMA, jay.k...@state.ma.us, Donnelly, Kenneth (SEN)
I would like to remind you all that you are paying $14.60 per $1,000 on your house while commercial property is taxed at $28.40 per $1,000 assessed value. 

Lexington commercial property is taxed more aggressively than many surrounding towns. We abide by the law and are doing fine.

George Burnell  

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Thomas, Ruth S

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Sep 30, 2016, 10:21:39 AM9/30/16
to George Burnell, Joel Adler, Eph Weiss, Sam Silverman, TMMA, jay.k...@state.ma.us, Donnelly, Kenneth (SEN)

But commercial property is assessed lower than residential property. 


Ruth Thomas, Pct. 4

From: lex...@googlegroups.com <lex...@googlegroups.com> on behalf of George Burnell <gabu...@gmail.com>
Sent: Thursday, September 29, 2016 8:55:54 PM
To: Joel Adler
Cc: Eph Weiss; Sam Silverman; TMMA; jay.k...@state.ma.us; Donnelly, Kenneth (SEN)
Subject: Re: Re: [LexTMMA] Commercial Assessments
 
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andrei radulescu-banu

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Sep 30, 2016, 10:31:40 AM9/30/16
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I think not all commercial property is assessed with the income method - perhaps someone who knows this better can weigh in. When commercial property is assessed using the sales comparison method, it gets higher assessment than with the income method, and also ends up paying the higher tax rate.

That, I think, is the real problem - and it is something that a split CIP tax rate is not addressing.

Then, there's the case of residential rental apartments, which are assessed with the more favorable income method, and pay the lower residential rate.

It is these sort of discrepancies that could be more easily fixed by the state legislature - but I think, politically speaking, there would have to be a much bigger outcry from much more many people at the state level for the legislature to act. There should be press coverage, etc. IMHO so far these are quirky problems that do not catch the attention of many people around the state. Which means there's little incentive for the legislature to jump and act on this.

Andrei Radulescu-Banu, Pct 8

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Frank Sandy

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Sep 30, 2016, 11:42:12 AM9/30/16
to George Burnell, Sam Silverman, TMMA
George,

   It is true that the commercial / industrial tax rate is higher than the residential tax rate.  That is the case for most municipalities with significant industrial property.   However, If you look at the surrounding towns with a significant industrial tax base, Lexington's ratio of industrial tax rate to residential tax rate is the lowest.
Commercial

Residential
Industrial

Tax Rate Tax Rate Ratio




Woburn 10.05 25.79 2.57
Burlington 11.46 28.28 2.47
Waltham 12.24 29.53 2.41
Lexington 14.6 28.4 1.95
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David L. Kaufman

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Sep 30, 2016, 12:27:43 PM9/30/16
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Then, there's the case of residential rental apartments, which are assessed with the more favorable income method, and pay the lower residential rate.

Since rental apartment properties are in fact residences, the real estate tax paid by the owner is passed on to the renter, so it is appropriate to use the residential rate. Taxing at the split CIP commercial rate would make rentals even more unaffordable, and since rentals are mostly occupied by residents at the lower end of our income spectrum, they deserve to pay at the residential tax rate at least as much as the owners of McMansions. Whether the different assessment method results in a significant difference in the actual sales pricing of apartment buildings from the assessed value, when they actually are sold, which is not often, is not the real issue.

I do not think that is a discrepancy that should be fixed, or even a discrepancy.

David L. Kaufman, Pct 6

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David L. Kaufman

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Sep 30, 2016, 12:43:31 PM9/30/16
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Frank raises a good question, but it isn’t quite the one he asks. I thought the maximum that could be used in setting the CIP was approximately the one we are using, so are Woburn etc violating the state law with ratios of 2.41 and up?

David L. Kaufman, Pct 6

Vicki Blier

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Sep 30, 2016, 1:09:48 PM9/30/16
to David L. Kaufman, Town Meeting Members
David's concern about the effect of higher taxes on residential tenants is reasonable. 
However a deeper look into how Lexington's rental properties set their rents shows that they are based on *market conditions*, not on expenses.

According to two industry people I spoke with, one a commercial appraiser who routinely analyses large residential rental properties and the other a manager for one of Lexington's apartment complexes, rents are set for the highest amount that the market will bear.
 
In the case of Avalon, the asking rent for an available apartment can change even daily in response to market conditions in order to achieve the highest possible return. They have the algorithms finely tuned.

Lexington's units also compete with units in neighboring towns...  and believe it or not, there are plenty of renters who aren't here for the schools and can easily move across the line into a Waltham apartment building. 

So the bottom line, according to my research, is that residential rental property owners are already getting every last dime they possibly can in rent with no wiggle room to simply pass along an increase in their property tax onto their tenants. 

(Note that this applies to residential properties. Commercial leases often have clauses that DO force tax increases onto the tenant)

Vicki Blier
Pct. 9

gjb...@rcn.com

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Sep 30, 2016, 3:25:49 PM9/30/16
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Vicki,

The fact that they are squeezing every last penny from tenants and could not pass along real estate tax increases is a good argument for increasing assessments if they are underassessed from market value.  The increase would have to come from their profits.  No one has reported on the relative profitability of Lexington rentals. I would guess that they are doing very well.  If they cannot operate profitably while paying their fair share of real estate taxes, the market would dictate that they sell the properties.

Gloria

andrei radulescu-banu

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Sep 30, 2016, 3:33:04 PM9/30/16
to David L. Kaufman, Town Meeting Members
David, the max CIP shift set by the state applies to assessed values - instead of the ratio of residential vs. CIP tax rates.

You can see the math on the tab "tax rate calculator" at Lexington Tax Statistics 1962-2014, for example. It's easier to follow on the spreadsheet than to explain the long formula.

Andrei Radulescu-Banu, Pct 8


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Vicki Blier

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Sep 30, 2016, 3:59:07 PM9/30/16
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I was just addressing David's concern about tenants suffering from their landlord's property tax increase.

I'm not defending the methodology other than to point out the fiscal risk of exposing the town to getting sued over an assessment, should the town wander too far from standard assessment practices. 

I don't know if our Bd. of Assessors is too cautious or if they're striking the right balance.  

I wouldn't know how to figure that out.

Vicki




     

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Harry Forsdick

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Sep 30, 2016, 4:48:14 PM9/30/16
to Vicki Blier, gjb...@rcn.com, Town Meeting Members
Vicki,

​Re: ​
On Fri, Sep 30, 2016 at 3:59 PM, Vicki Blier <v...@blier.net> wrote:
​...
I don't know if our Bd. of Assessors is too cautious or if they're striking the right balance.  

I wouldn't know how to figure that out.

​Is there a group in town who is equipped to do this oversight?  ​
 
​It strikes me that the decisions of members of Town Boards, Committees or Staff who make decisions that impact the economic, social or health life of Lexington residents need to have an oversight following who is knowledgeable about the area in which they work.  Perhaps that is the Board of Selectmen, the School Committee or any of the directly elected town board / committee members who are directly accountable on election day to the residents.  Perhaps it is the Town Manager who is one level removed from the residents.  

But, the answer isn't "no one", right?

-- Harry

Glenn Parker

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Sep 30, 2016, 6:02:00 PM9/30/16
to Town Meeting Members
On 9/30/16 4:47 PM, Harry Forsdick wrote:
On Fri, Sep 30, 2016 at 3:59 PM, Vicki Blier <v...@blier.net> wrote:
​...
I don't know if our Bd. of Assessors is too cautious or if they're striking the right balance.  

I wouldn't know how to figure that out.

​Is there a group in town who is equipped to do this oversight?

The Assessor's Office is appointed by the Town Manager and is supervised by the Assistant Town Manager for Finance.  The State Dept. of Revenue audits our Assessor's Office every three years.  The Town has to defend assessments in court if they are challenged.  I'd say we have a fair amount of oversight.

-Glenn Parker

Glenn Parker

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Sep 30, 2016, 6:21:47 PM9/30/16
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Our neighboring towns are not violating the CIP limit.  The ratios listed in Frank's table are *not* CIP Shift numbers, they are the end result of applying a CIP Shift to the assessed values, and this takes a bit of explaining.  Deep breath now, the combination of bureaucracy and math gets a little tricky.

In MA, there are five classes of property which we divide into two aggregate categories here:
  1. Commercial, Industrial, and Personal Property (aka "CIP")
  2. Residential and Open Space (aka "RO")
The CIP Shift adjusts the SHARE OF THE TOTAL TAX LEVY paid based on the TOTAL ASSESSED VALUES of these two categories.

For FY 2016 in Lexington, the total assessed value for these two classes was:
  1. CIP: $1,185,945,695, which is 11.8% of the total assessed value for the Town, and
  2. RO: $8,862,601,990, the remaining 88.2%.
Yup, we have over 8.8 billion dollars in residential property value in Lexington (we have zero Open Space property).

If things were simple, then the RO taxpayers' share of the total tax levy would be 88.2%, and CIP taxpayers' share would be 11.8%, and everyone would be taxed using a single uniform tax rate.  About 2/3 of the towns in MA use a single tax rate like this, but in cities and towns where the CIP total assessed value exceeds 10% of the grand total, they are more likely to apply a CIP shift.  This allocates a larger portion of the total tax levy onto the CIP taxpayers.  I'll leave the discussion about the policy implications for another day.

The basic CIP shift rules allows a municipality to adjust those percentages thus:
  • CIP taxpayers cannot pay more than 150% of their share, in our case 11.8% * 150% = 17.7%.
  • RO taxpayers must pay at least 65% of their share of the levy, in our case 88.2% * 65% = 57.3%.
BUT if RO taxpayers would end up paying a higher share of the tax levy than in the prior year, the rules change:
  • CIP taxpayers cannot pay more than 175% of their share, in our case 11.8% * 175% = 20.65%.
  • RO taxpayers must pay the greater of:
    • (1) 50% of their share (in our case 88.2% * 50% = 44.1%), OR
    • (2) the lowest percentage share of the levy they have paid since classification began.
Still with me?  OK, now because we have significantly more RO than CIP property, the minimum share for RO taxpayers doesn't come into play, so all we need to consider is the CIP share.  And since our town's RO assessed value is currently growing faster than our CIP assessed value, the second set of rules applies and Lexington can adjust the CIP share to be up to 175% of its single rate share.

Remember, we are working with the total assessed value for all CIP property in town.  Lexington's levy limit for FY 2016 was $163,073,903, so the most that CIP taxpayers could be required to pay (for FY 2016) in total is 20.65% of the levy limit, or $33,680,926.  To raise that amount, the tax rate is calculated as $33,680,926 divided by the CIP total assessed value of $1,185,945,695 times 1,000 = $28.40 per thousand for CIP taxpayers.

Meanwhile, we need to raise the remaining 79.35% of the tax levy from the total assessed value of the RO property.  That chunk of the tax levy is $129,399,142.  Dividing that by the RO total assessed value of $8,862,601,990 times 1,000 = $14.60 per thousand for RO taxpayers.

Obviously, $28.40 is not 175% of $14.60.  It is actually 194%, or almost double.

The way this works in practice is that a CIP Shift bumps the CIP taxpayer rate to some fixed value above the single rate, while the RO taxpayer rate is dropped below the single rate.  Here's the trick: the larger the percentage of the CIP total assessed value is, the more the RO rate is dropped (until it hits the minimum share rule that we previously ignored).

Let's look at some FY 2016 numbers from the Dept. of Local Services for Frank's list of towns:

Municipality RO Assessed Value CIP Assessed Value CIP % of Total CIP Shift
Lexington  8,862,601,990  1,185,945,695 11.8% 1.75
Woburn  4,555,230,687  1,931,305,573 29.8% 1.75
Waltham  6,546,761,667  3,399,532,419 34.2% 1.75
Burlington  3,396,245,775  2,138,554,119 38.6% 1.57

One of these towns is definitely not like the others.  Compared to Lexington, the other three towns each have a much lower percentage of RO assessed value.  They also have a much higher percentage of CIP assessed value, i.e. they have much larger commercial tax bases, in both absolute and relative terms.  Therefore, their use of a CIP Shift has a much greater impact on their RO tax rates.  In fact, Burlington is unable to use the maximum 1.75 CIP Shift because it would push their RO tax levy share below the legal minimum.

Conclusion: To be more like those other three towns, work on growing Lexington's commercial tax base.

References:
http://www.mass.gov/dor/docs/dls/publ/101handbook/chapter4.pdf (section 4.2)
http://www.lexingtonma.gov/sites/lexingtonma/files/uploads/fy16_classification_packet_updated_111615.pdf

Narain Bhatia

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Sep 30, 2016, 7:33:15 PM9/30/16
to Glenn Parker, lextmma

One way to get an idea about commercial assessments is to see the number of abatement application filed. If too many or growing you know the property owners are not happy and if very few or none you know they feel their assessments are reasonable.

Commercial assessment is inherently a complex subject and not easily explained. What follows is my understanding which may be simplistic or at worst incorrect in some places.

For income method to work the property owners must submit all the leases agreements which are quite complex such as if the rent is net, net net or net net net (too much to explain); schedule of improvement and other allowances given to tenants which tend to lower the rent; extent of chargeback of common charges and method thereof in case of multiple tenants; vacancy rates and so on. All these are necessary to determine true rent. Further vacancy of an individual building does not count as much as area wide vacancy rates.

Often uses of the building such as office space, lab space or retail space or mixed use as well ad the Class of the building such as Class A the modern luxorious buildings or Class B and C the less desirable buildings and market conditions dictate the assessed rate per sqft.  I am told some owners provide all the lease information while others do not but as a result wave their right of court appeal  to settle abatement. CIP provides some protection to the town and residents.

The bottom line is if our taxes are competitive with competing communities we can attract and retain businesses and tax revenues. So far  studies have shown that our taxes per sqft are in the ballpark or a bit higher noting at the same time that it's hard to compare apples to apples because no two buildings or towns are alike. Also there is the question of CPA surcharge that is not uniform.

When people buy a property at much higher price than the assessed value it often indicates that the buyer will improve the property for a use that will attract higher rent.  When that happens the new assessment will catch up in the next assessment cycle. In my opinion except for some isolated or unique situations we are doing fine.

Best,
Narain  Bhatia
Member EDAC


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David L. Kaufman

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Sep 30, 2016, 8:42:49 PM9/30/16
to Town Meeting Members
While it is clear that landlords try to get the maximum rate they can for any rental, they are not actually changing rents for occupied units daily since tenants usually have leases with set terms. In any case they must cover the tax component expenses of their rentals and have to have a profit margin, or they go out of the landlord business and sell the building to someone who can charge enough more to cover that cost. Real estate taxes are just one component of their cost, since they also have to maintain the building, insure the building against hurricanes etc., mow the lawns, collect the rents, advertise for new tenants, and amortize their initial capital costs etc. If their taxes go up you can be sure that the tenants will ultimately pay enough more to cover that, no matter what the owners of other buildings in other towns are charging. 

Competition does not repeal basic economics, and RE taxes are a basic cost, though certainly not the only costs. People can certainly rent in Woburn, instead of Lexington but then they need to send their kids to the Woburn schools, and commute from Woburn to work, maybe via 128 at rush hour an extra 4 miles or so to Waltham (ugh). 

(Maybe we should raise the RE tax on residences enough to discourage anyone with, or without, children from moving to Lexington, so then we would have no need for new schools, and we would then be able to lower taxes, but have much lower “new growth” except for commercial properties so we would need to override prop 2.5 more to raise enough more taxes to pay for basic services, forcing more people out of Lexington due to higher taxes, but with fewer people we would need less basic services like fire, police DPW etc so we could cut taxes.<— This is an obviously circular logical argument, tongue in cheek, and not a serious proposal.)



David L. Kaufman, Pct 6

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”  —Kenneth Boulding, Prof. of Economics



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David L. Kaufman

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Sep 30, 2016, 8:51:56 PM9/30/16
to Glenn Parker, Town Meeting Members
Glenn,

Thanks for the clear explanation.

David L. Kaufman, Pct 6


“Wisdom too often never comes, and so one ought not to reject it merely because it comes late.”  —Supreme Court Justice Felix Frankfurter

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Joel Adler

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Oct 1, 2016, 5:42:49 AM10/1/16
to davidl...@rcn.com, lex...@googlegroups.com
David,
             Please keep your tongue off of my cheek.

                     Joel 
 
 
On 09/30/16, David L. Kaufman<davidl...@rcn.com> wrote:
 
While it is clear that landlords try to get the maximum rate they can for any rental, they are not actually changing rents for occupied units daily since tenants usually have leases with set terms. In any case they must cover the tax component expenses of their rentals and have to have a profit margin, or they go out of the landlord business and sell the building to someone who can charge enough more to cover that cost. Real estate taxes are just one component of their cost, since they also have to maintain the building, insure the building against hurricanes etc., mow the lawns, collect the rents, advertise for new tenants, and amortize their initial capital costs etc. If their taxes go up you can be sure that the tenants will ultimately pay enough more to cover that, no matter what the owners of other buildings in other towns are charging. 

Competition does not repeal basic economics, and RE taxes are a basic cost, though certainly not the only costs. People can certainly rent in Woburn, instead of Lexington but then they need to send their kids to the Woburn schools, and commute from Woburn to work, maybe via 128 at rush hour an extra 4 miles or so to Waltham (ugh). 

(Maybe we should raise the RE tax on residences enough to discourage anyone with, or without, children from moving to Lexington, so then we would have no need for new schools, and we would then be able to lower taxes, but have much lower “new growth” except for commercial properties so we would need to override prop 2.5 more to raise enough more taxes to pay for basic services, forcing more people out of Lexington due to higher taxes, but with fewer people we would need less basic services like fire, police DPW etc so we could cut taxes.<— This is an obviously circular logical argument, tongue in cheek, and not a serious proposal.)


David L. Kaufman, Pct 6

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”  —Kenneth Boulding, Prof. of Economics


On Sep 30, 2016, at 3:59 PM, Vicki Blier <v...@blier.net> wrote:

I was just addressing David's concern about tenants suffering from their landlord's property tax increase.

I'm not defending the methodology other than to point out the fiscal risk of exposing the town to getting sued over an assessment, should the town wander too far from standard assessment practices. 

I don't know if our Bd. of Assessors is too cautious or if they're striking the right balance.  

I wouldn't know how to figure that out.

Vicki




     

On Fri, Sep 30, 2016 at 3:25 PM, <gjb...@rcn.com> wrote:
Vicki,

The fact that they are squeezing every last penny from tenants and could not pass along real estate tax increases is a good argument for increasing assessments if they are underassessed from market value.  The increase would have to come from their profits.  No one has reported on the relative profitability of Lexington rentals. I would guess that they are doing very well.  If they cannot operate profitably while paying their fair share of real estate taxes, the market would dictate that they sell the properties.

Gloria

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andrei radulescu-banu

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Oct 1, 2016, 8:00:50 AM10/1/16
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...Or please use a different tongue, s'il vous plait.

Andrei



     

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David Kluchman

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Oct 1, 2016, 11:44:58 AM10/1/16
to Glenn Parker, Town Meeting Members

This was excellent.  Thanks.

David Kluchman (sent from phone)
617-947-4774

dklu...@gmail.com

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Glenn Parker

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Oct 1, 2016, 5:08:16 PM10/1/16
to David Kluchman, Town Meeting Members
Thanks, David.

Regards,
Glenn


On 10/1/16 11:44 AM, David Kluchman wrote:
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