When it comes to taxes, bills rate top billing

It’s that time of year when Massachusetts communities — and property owners therein — find out what their new tax hit will be.

Before delving into the misguided emphasis public officials and newspaper headline writers put on this process, we’ll give a general picture into the calculation of that quarterly bill.

Without wading into the weeds, individual real estate tax bills are based on the assessed value of your property, minus any exemptions for which you qualify.

Assessed value is the dollar amount assigned to a home or other piece of real estate for property tax purposes. It takes into account the value of comparable properties in the area, among other factors.

That’s replicated for every other residential property in your community.

That establishes the tax levy, the total amount of funds a municipality can collect. In Massachusetts, that levy limit automatically increases by 2.5% each fiscal year. That, plus new growth, constitutes a community’s levy ceiling.

The Department of Revenue then approves or adjusts a community’s tax bill, based on the above factors; it’s expressed as the number of dollars per $1,000 of assessed value.

In Billerica, the average residential bill in town went up due to an increase in property values.

Board of Assessors Chair John Speidel explained to the Select Board that property values in town had gone up an average of 8.1% since last year for residential properties, while business property values have increased by just 4.8%.

That meant that the mechanism used to calculate what the town could collect in taxes — the tax rate — had to be adjusted down, from $13 per $1,000 of assessed valuation to $12.64.

Tyngsboro residential taxpayers will still see a minor increase in their bills due to a rise in residential property values.

The average single-family home tax bill will settle around $6,665, an increase of $25.

Chief Assessor Lauren Woekel told the Select Board that a sales analysis of properties sold in 2019 and 2020 showed that “residential property values increased by 10%, and commercial/industrial values by 5%.”

That created a rare situation in this time of soaring property values — the average commercial property tax bill actually decreased by $349, to $7,758.

The average value of a home in Tyngsboro went up from $413,400 in fiscal 2021 to $455,600 in fiscal 2022.

To reflect those rising home values, the tax rate was set at $14.63 of $1,000 of assessed value, down from $16.07.

The same scenario — rising property values, lower tax rate — played out in Wilmington.

The good news — property owners there will experience the smallest residential tax increase in over a decade.

Increasing property values in Wilmington and other surrounding communities have resulted in a slightly higher average tax bill, with the average single-family tax liability estimated at $7,081 for fiscal 2022, up about $64 from fiscal 2021.

That triggered a decrease in the tax rate from $13.84 to $13.03 of assessed value.

It should be obvious from this three-town review that highlighting increased or lower tax rates in a report on property taxes misses the point.

Tax rates go up or down depending on the direction of property values. Had home values come down over the past year, tax rates would have done just the opposite in order for the municipality to collect what it’s due in tax revenue.

So, whenever tax rates — and not tax bills — get top billing, just take it with a grain of SALT — otherwise known as state and local taxes.