LARGEST RESIDENTIAL TAX BREAK IN STATE PROPOSED BY MAYOR

SOMERVILLE
- Somerville homeowners would receive the highest property tax exemption in the
state under a proposal submitted by Mayor Joseph A. Curtatone to the Board of
Aldermen this week, and the City continues to explore increasing exemptions for
seniors, veterans, widows and those with disabilities that are already double
the state limits.

The
proposed home rule petition, which requires approval by the State, would boost
Somerville's residential property tax exemption from 30 percent to 35 percent. Homes
in Somerville with a residential exemption this year account for 58 percent of
the homes in the city. The average effect the 35 percent exemption would have
had this year on residences receiving the exemption by category, compared to
the current 30 percent exemption, is as follows:

This year, two-thirds of the properties in the city saw
modest tax bill increases between 1 and 9 percent. However, even while the
property tax bill on the average $400,000 home in Somerville remains third
lowest among 15 of the city's neighboring urban communities, the state's
required triennial revaluation resulted in more substantial increases in
assessed values for the first time since pre-Great Recession FY2007, which led to
some homeowners seeing larger increases. The approximate breakdown of
Somerville residential properties and the change in their property tax bill
from FY13 to FY14 is:

• 180
  properties had a decrease of 5 percent or more

• 270
  properties had a decrease between 1 and 5 percent

• 10,500
  properties had an increase between 1 and 9 percent

• 4,000
  properties had an increase between 10 and 24 percent

• 530
  properties had an increase between 25 and 49 percent

• 110
  properties had an increase of 50 percent or more

"This is no different than investing in any of the
programs we have to help people in our community who are vulnerable. The
property tax is perhaps the most regressive tax, levied without taking into
account a taxpayer's income or ability to pay the tax and disproportionately
affecting the middle class, retirees and small businesses," said Mayor Joseph
A. Curtatone. "Cities and towns across Massachusetts have been forced to increasingly
rely on the property tax as state aid has been severely cut since 2000. Residential
property tax bills in Somerville are still lower than in most neighboring
towns, but our families and seniors could face greater burdens in the future without
action. I said last month that we would act decisively, and increasing the
residential exemption is one of several steps we can take, along with all that
we are already doing and while continuing to explore more options for relief."

"I am pleased
that the City has undertaken the analysis of increasing the residential
exemption as I requested at the Board's recent public hearing on taxes and that
the Mayor is putting forth a proposal for discussion among the aldermen," said
Board of Alderman President Bill White. "When I authored the legislation that
increased the exemption from 17 to 30 percent, I sought to protect the families
and residents who, without this exemption, might have been forced to sell their
home years ago. The great progress that Somerville has made over the past decade
has made our city ripe for real estate speculation. An increase in the
residential exemption is one tool that should help us in our efforts to keep
Somerville affordable for our residents who wish to stay here."

Mayor Curtatone is also reconvening the Financial
Advisory Committee (FAC) to explore additional options for relief, including
for small business owners, as well as increased exemptions for seniors,
veterans, widows and those with disabilities. The FAC will develop
recommendations seeking to balance an equitable tax burden with preserving
investments in schools, public safety and City services.

The
City also examined increasing the residential exemption to 40 percent. However,
because exemptions do not drive down the tax burden but only shift it from one
group of taxpayers to another, increasing the exemption to 40 percent would
lead to larger tax bill increases for ineligible residences and those higher
costs would be passed on to renters living in those buildings.

For
example, there are 136 nine-plus family residences in Somerville that were
ineligible for the residential exemption this year. The average nine-plus
family residence has a value of $2.8 million and saw a $1,383 tax bill increase
this year. If the residential exemption were 40 percent this year, the tax bill
on the average nine-plus family home would have increased an additional $2,634;
if it were the proposed 35 percent, it would have increased an additional
$1,289.

"Today's Somerville renters are tomorrow's two-bedroom
condo owners and two-family home owners, who will settle in the community and
raise a family here. Neighborhoods should have a variety of housing types for a
variety of people, and we need to strike the right balance between supporting
homeowners and renters," said Mayor Curtatone. "Increasing the exemption to 35
percent instead of 40 percent means that we can still provide relief to the
middle class and retirees, while mitigating the burden Somerville renters could
face in the form of higher rents due to the building owner seeing a larger tax
increase."

The proposed residential property tax increase is one of
several strategies addressing affordability in Somerville:

• The share of total taxes paid by residential
  property owners decreased by 3 percent this year, more than three times the
  decrease in any previous year as the City continues to expand its commercial
  tax base through strategic community-driven development.

• Seeking new efficiencies have reduced
  discretionary spending in the City's budget. Somerville spends less per capita
  than most cities and towns in Massachusetts while maintaining nationally lauded
  services.

• The City's inclusionary zoning requires that
  affordable units be built alongside new units at rates far above the state's
  benchmark.

• The recently increased affordable housing
  linkage fee and passage of the Community Preservation Act bring in funds that
  are used to build more affordable housing through our Affordable Housing Trust
  Fund.

• Mayor Curtatone has also announced the City is
  pursuing the creation of a new affordable housing program specifically for
  working middle class families, and an overhaul of the City's zoning ordinance will
  create new fabrication and arts districts that preserve artist and maker spaces
  and live-work buildings.

• The community-developed 20-year comprehensive
  plan SomerVision sets a goal of creating 6,000 new homes in Somerville, with
  1,200 permanently affordable, putting downward pressure on both rents and
  property costs by increasing supply.