With Peterborough residents set to vote in town elections Tuesday, a campaign flyer sent to some residents from Select Board candidate Andrew Osterman, states that “We are all about to see our town property taxes go up more than 27%.” It stated that he was the only candidate to vote against the tax increase.
Contacted Friday, Osterman, who is challenging incumbent Tyler Ward, said he has used the figure in all his mailers because the town is facing a “historic” tax increase, in which the total tax bill could be more than $1,000 per month.
“I believe the biggest issue confronting Peterborough is affordability,” he said.
Osterman cites a Ledger-Transcript article about the town’s budget hearing in March as the source for his claim, but a 27 percent municipal tax increase was one of four possibilities presented in the article, and the final tax rate won’t be determined until November.
In 2022, the municipal portion of the town tax rate made up 35 percent of the total rate. Of the combined 2022 tax rate, which was $25.86 per $1,000 assessed valuation, $9.17 was the municipal rate, covering the municipal budget and warrant articles. Most of the rest, $15.72 per $1,000, was for schools, with the remaining 97 cents per $1,000 for county taxes.
As presented at the budget hearing, if the town’s assessed value does not increase and the Select Board does not apply any of the town’s unrestricted fund balance toward reducing the tax rate, the municipal tax rate would increase from $9.17 to $11.68 per $1,000, a 27 percent increase. This is the worst-case scenario, and one unlikely to occur, according to Town Administrator Nicole MacStay.
“We fully expect there to be an increase in assessed valuation,” she said.
Other scenarios presented at the hearing were as follows:
— No fund balance added, with a 10 percent increase in assessed value, resulting in a municipal tax rate of $10.62 per $1,000, an increase of about 16%.
— If assessed value increases 10 percent and the town applies $500,000 from the fund balance, the municipal tax rate would be $10.10 per $1,000, or about a 10% increase.
— If the town applies $500,000 from the fund balance and the assessed value goes up 15 percent, the municipal tax rate would be $9.66 per $1,000, or about a 5% increase.
However, MacStay said at this point, revenue, tax and assessed valuation numbers are just estimates.
“We won’t know what the final numbers are until the fall, when we go to set the tax rate,” she said.
MacStay said auditors will determine the town’s unrestricted fund balance as of the end of the fiscal year on June 30 in August and September.
In addition, the town’s contracted assessing agent, Corcoran Consulting, will determine the town’s total assessed valuation as of April 1.
“That work will probably not be completed until mid-September, possibly as late as the first of October,” MacStay said.
Osterman called the possibility of a 15 percent assessment increase “ridiculous.” MacStay said that while she does not expect a 15 percent increase, assessments have increased an annual average of 12 percent, although that figure does include the mid-cycle property revaluation in 2021, where the town’s total assessed value increased from $708,717,016 to $874,585,813.
“Is there a big number in there? Absolutely, no question about it,” MacStay said, adding that initial market data have already shown an increase.
Lilli Gilligan, the town’s director of finance, will estimate the town’s revenues for fiscal 2024, which starts July 1. Once the assessed valuation, fund balance and revenues are finalized, along with the tax bills from the schools and county, the Select Board will vote on the tax rate in November.
Last year, board members approved using approximately $1.06 million from the unrestricted fund balance toward reducing the tax rate. They did not use any in 2021, looking to save as much as possible to offset the impact of the cyber scam that cost the town $2.3 million.
Since 2016, with the exception of 2021, the amount of unrestricted fund balance used to reduce taxes has increased from $100,000 to last year’s $1.06 million. The overall assessed valuation has also increased annually, from $ 621,738,895 in 2016 to $ 883,270,701 in 2022.
During that time, the municipal tax rate has gone from $10.34 per $1,000 to the current $9.17.