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Question from: Colleen Kirby Cho Is it really best for our townwide tax rate to include MWRA fees or should that be charged separately? Answer from: Peter Fuller Yes. My understanding is that MWRA fees are included in the property tax rate so that these fees can be deducted from income on Federal income tax returns. If billed separately these fees would not be deductible. Additional analysis from: Gordon Jamieson The tax deduction concept is a nice idea and sounds good at first glance. BUT this decision has been made solely by the BoS, as I understand it, each year right before they set the tax rate. Have all of the implications of this decision been carefully considered??? AND is this where an expense representing 35% of the annual cost of supplying water/sewer services through the town's water/sewer enterprise fund (13M total) belongs??? The arguments against: First - I am not aware of any other town/city that does this. Impacts? Real Estate—It makes Arlington's tax rate look artificially high. This high tax rate may make it more difficult to qualify to purchase home in town. State Aid—Does this make Arlington appear to have higher tax revenue than it actually does, since the 4.5M in water/sewer debt appears to NOT be substracted out of our revenues prior to calculating state/school aid??? Second - The fee is assessed only on taxable properties. Thus the fee is due whether or not you actually use any water at all. Impacts? Cost inequity. Non-profits and the town avoid paying their fair share of 35% of the water/sewer costs. Despite being able to consider this a 'connection' cost, not all homeowners pay the same amount to be 'connected'.
Drives usage v. conservation since water bills are artifically low because they do not cover the complete cost of service. Third - Tends to mis-direct taxpayer anger/angst MWRA debt costs have increased substantially over the past five years (ca. 47%). Thus our practice of placing water/sewer debt in the tax rate makes it appear that town taxes/spending are rising at a rate that is faster than they are actually rising. As no explanation accompanies the tax bill (and many of us just are just notified by our mortgage firm that you need to pay more) it tends to focus taxpayer anger in the wrong place; at the town rather than the actual guilty party, the MWRA. Lastly - While this practice is a nice accounting trick... Would you think it a good idea to place part of your gas/electric bill in your tax rate? Since, in a sense, this is exactly what we are doing. IMHO, it is always better from an accouting/cost analysis perspective to have costs and the associated bill be as directly linked as possible, as this provides you with the best understanding regarding how you can alter your behavior to reduce that expense should you desire so to do. And we think health insurance is out of control— Using data from town's assessor's office readily available at the town's web-site one can determine that: MWRA debt payments (currently included in our tax bills) have increased 230% since 1994. By contrast, Arlington Tax Levy (as limited by Prop 2.5 including growth) is up 31% over the same period of time. This is one reason why your taxes 'appear' to be increasing at a rate faster than the 2.5% provided by Prop 2.5 So, tell me who's running a tight ship (and who's not)?!?!? |
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