WILLIAMSTOWN, Massachusetts – The average property tax bill for fiscal year 2025 is expected to have the smallest year-over-year increase since 2019, the Select Board learned Monday evening.

At the Board’s annual hearing on tax classification, Tax Assessor Christopher Lamarre outlined the tax implications of the city’s fiscal year 2025 budget.

Tax revenues, the total property taxes collected by the city, increased only 1.3 percent from fiscal year 2024. Revenues are the amount the city must raise to cover the budget approved at the annual city meeting in the spring.

In FY24, the fiscal year ending June 30, the levy was $20.3 million; in FY25, that figure is now $20.6 million, the smallest year-on-year increase since 2021, when it rose just 0.02 percent year-on-year.

In the last three financial years, the levy increased by 3.6 percent (FY22), 4.35 percent (FY23) and 4.11 percent (FY24).

The 1.3 percent increase for the fiscal year that began July 1 will be largely due to an increase in the city’s real estate values.

The projected tax rate for city expenditures (which must be confirmed by the Tax Office) is $13.80 per $1,000 of assessed value. This is the fourth consecutive year the tax rate has decreased and a $1.35 decrease from the fiscal year 2024 tax rate of $15.15/$1,000.

Despite the lower tax rate, the tax burden for most property owners will increase – but not as much as in recent years.

That’s because the median value of a single-family home – the point at which half of the homes in the city are valued higher and half are valued lower – is $439,100 in FY25, up $44,000, or 11.1 percent, from the median assessed value of $395,100 in FY24.

The tax bill on this hypothetical average-assessed home is expected to be $6,060, $74 more than last year’s tax bill of $5,986 – an increase of 1.2 percent. Six years ago, in fiscal year 2019, the average tax bill increased by $31 year over year.

Part of the difference between the increase in taxes (1.3 percent) and the increase in the average tax burden (1.2 percent) is due to a renewed growth in the tax base.

Home construction, renovations, etc. resulted in an increase in the city’s tax revenues of $17.8 million and $266,793 between fiscal year 2024 and fiscal year 2025, according to figures Lamarre presented Monday.

The total tax base for fiscal year 2025 is $1.5 billion (residential, commercial, industrial and personal property). Taking into account new growth and reassessments, this is an increase of $151 million, or 11.2 percent, over fiscal year 2024.

“That’s a big number,” Lamarre said of the total tax base. “These increases are due to sales prices exceeding assessed values ​​(from previous years). We are required by the Commonwealth to do an assessed value to sales ratio study where we compare sales prices to assessed values.”

“When people follow the sale prices of homes in this community, many of them raise their eyebrows when the sale prices are announced, and they do with me too. When that happens, we have to adjust what we call cost tables in our appraisal system. These cost tables have to be adjusted so that the median appraisal is within 90 percent of the median sale price of a given property class. In other words, if things are selling for $100,000 and I find that the appraisal is $80,000, I have to adjust the cost table so that the appraisal goes up to at least $90,000 but no more than $110,000.”

As always, the tax rate is determined by relatively simple mathematics: the amount of the levy is compared to the tax base to determine what percentage of the property value the owners must pay in order for the city to pay its bills.

The modest increase in the levy from fiscal year 2024 to fiscal year 2025 is the result of efforts by elected officials last winter to keep costs under control.

“Thank you to (City Manager Robert Menicocci) and the Finance Committee for making sure everything went as smoothly as possible,” said Select Board member Randal Fippinger, who attended Finance Committee meetings last winter and spring as an observer.

Excess capacity is just over $3.3 million for FY25, Lamarre reported.

“Many towns don’t have the capacity to dispense,” said Andrew Hogeland, a member of the Select Board and former president of the Massachusetts Municipal Association. “I’m not demanding that we spend the money, but it’s remarkable that we have that capacity when we need it.”

The Select Board’s task at the classification hearing – in addition to hearing a report on the city’s fiscal year 2025 finances – was to make decisions about whether to use four state-approved mechanisms to redistribute tax collection: the open space rebate, the residential property exemption, the small commercial property exemption, and the split of the tax rate between residential and commercial properties.

The Select Board’s other tasks on Monday:

It was decided to appoint a volunteer to fill the seat vacated by Hogeland until the annual municipal election in May can decide on the final year of his term.

Keywords: Tax year 2025, property taxes, tax classification, tax rate,