The average year-round resident in Tisbury will pay an extra $110 in property taxes next year, following a successful push from town businesses to shift the tax burden off commercial property.
A nonresident property owner whose Vineyard Haven home is of average value — $860,425, according to the town assessors — will see an even bigger increase of almost $138, while business properties of the same value will see their taxes decrease by some $1,015.
Currently, businesses pay property tax at 160 per cent the rate of residents, with year-round residents eligible to receive another 20 per cent off.
The new tax rate, which represents a 140 per cent ‘shift,’ as the differential rate is called, emerged as a compromise among the three town selectmen on Tuesday night after much dickering.
Jeff Kristal, who is both a resident and business owner, suggested at one point he might have been persuaded to go as low as 120 per cent, which would have given business owners twice as big a break, while also doubling the increases for residents. His preferred position, though, seemed to be 130.
Tristan Israel said he originally favored going to 150.
Chairman Denys Wortman favored 140, which was where the deal eventually was struck.
Property tax rates are a perennial bone of contention in most towns, but more so in Tisbury, which has the most complex formula on the Island.
The town is unique not only in setting differing rates for commercial and noncommercial property, but in favoring year-round residents over seasonal or part-time residents.
The selectmen’s considerations this year were aided somewhat by an explanation from assistant town assessor Ann Marie Cywinski, and by a spread sheet showing the impacts on various degrees of shift between various potential rates.
Ms. Cywinski began by noting the total tax take for the year would be $16.7 million, an increase of three per cent. She said the assessed value of residential property was down three per cent, while the assessed value of commercial property was unchanged.
The discussion first focused on the issue of the differential treatment of year-round versus part-time residents.
The town has had a split tax rate since 1988. People who meet the criteria are eligible for a 20 per cent reduction in their taxes based on the average residential class value of property.
That means they can get a cut equal to 20 per cent of the tax that would otherwise have been payable on a property valued at $860,425, which works out to a little over $1,034.
The credit, she said, applies equally to every resident, whether their home is worth $200,000 or $2 million.
The credit can only be applied to one property.
The explanation of how the system works took longer than the consideration of whether it should be continued. The consensus was that the split rate is a fair thing because it helps compensate Islanders for the higher costs of living here.
Melinda Loberg spoke in support of the interests of non-resident property owners and asked that the town remember to keep a balance.
The discussion of lowering the business tax rate drew more discussion, mostly from the various town businessmen who attended the meeting to argue in favor of it.
Most said the higher tax rates on businesses in Tisbury had the effect of depressing commercial activity.
Pat Gregory, owner of Educomp, cited data compiled by Christine Flynn at the Martha’s Vineyard Commission showing the growth in business numbers lagging behind Edgartown and Oak Bluffs.
Since the differential tax rate was adopted in 1988, the figures showed, the number of businesses based in Tisbury had grown by just 25, from 323 to 348. Over the same period, Oak Bluffs had gone from 174 to 214, and Edgartown from 211 to 346.
The bottom line came to this: in 2009, commercial property owners will pay $8.27 per $1,000 of assessed value of their property and residents will pay $6.01 (less the $1,034 credit for year-round residents).
After the meeting, Mr. Kristal said he was pleased with the decision.
“It sends the message that ... we’re in moving in a new direction,” he said.
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