Northborough officials project $561 tax increase in FY23

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NorthboroughNORTHBOROUGH – Northborough residents may be facing an average tax increase of $561 in the 2023 fiscal year, or 6.8 percent, according to a presentation to town boards and committees earlier this month.

“The reason for that, overwhelmingly, is the increase in the single-family home values,” Town Administrator John Coderre said Dec. 20.

Coderre presented a financial trend monitoring system report to the Board of Selectmen, School Committee, and appropriations and financial planning committees that projected that the average single-family home in Northborough would be valued at $546,657 in the 2023 fiscal year. That would be a 10 percent increase over current values. 

The town is further projecting values to increase by two percent each year to ultimately reach $591,719 in the 2027 fiscal year. 

Those values are based specifically on Northborough sales data. 

“We haven’t seen values pop up like this in a very, very long time,” Coderre said. 

He said the town is hoping to get more funds through state aid and local receipts revenue, which he said the town hopes will rebound with the pandemic in the rearview mirror. 

The single-family tax bill has increased by an average of $184 per year between 2011 and 2022. However, Coderre said, such figures will be unlikely moving forward.

“All the pressure because of what’s happening with state aid, the fact that we’re reaching build out — all of these things factor into additional pressure on the single-family home tax bill,” Coderre said.

Continued commercial and industrial development will help mitigate some of this impact on taxpayers, as will efforts to minimize budget increases, working to maintain services without significant staffing or service increases, Coderre said.

The town is anticipating a 3.39 percent increase in the budget for Northborough’s general government and education services.

That translates to spending about $41.9 million on education, including payments to Assabet Valley Vocational Technical High School, and $24.4 million on general government.

How Northborough got through the pandemic

As part of Coderre’s presentation, he reviewed the town’s financial health, saying Northborough is in “relatively good financial condition.” 

Coderre said Northborough moved through the COVID-19 pandemic with “flying colors.”

“We weren’t slashing and cutting services,” he said. “The schools were able to continue doing what they do. Public safety had the resources they needed. We had an appropriate, if not stellar response to the pandemic. We still continue to be a leader statewide in terms of vaccination rates and clinics and outreach and information.” 

Northborough’s planning and execution went perfectly, he said.

According to Coderre, Northborough cut increases in its operating budgets to one percent in the 2021 fiscal year, and it also constrained its increases in the 2022 fiscal year. The town used $378,000 in free cash in its 2021 operating budget. 

Coderre said the town did stop contributing to its savings account. Normally, Northborough places $200,000 every year into its Stabilization Fund. It did not do that in the 2021 and 2022 fiscal years. 

Additionally, during the pandemic, Northborough stopped contributing to its Other Post Employment Benefits Trust Fund (OPEB), which pays for other benefits that people who retire receive besides their pensions. 

In order to phase OPEB back into the operating budget, the town is proposing first phasing it into the 2023 budget using excess levy capacity. The town will continue to phase it in during the 2024 fiscal year.

Northborough also postponed over $800,000 in capital plans and projects in 2021. Because the town didn’t end the 2020 fiscal year with a lot of surplus funds, Northborough had less free cash to fund such pay-as-you-go projects.

“The result of that is we have a bubble of capital projects,” Coderre said. 

He added that some federal aid that is now available “is a perfect use” to deal with these capital projects. 

“The whole point of making these maneuvers and why we put ourselves in this position was so that we could deal with a budget surprise, a pandemic, a storm, a recession and buy ourselves a fiscal year to come up with more long-term strategies or to wait for federal and state assistance,” Coderre said. 

Board of Selectmen Chair Jason Perreault thanked staff members for their work at the end of the presentation. 

The methodologies served the town well through the pandemic, he said. 

“I’m just feeling very fortunate that we have this expertise at our disposal here to help our town get through this circumstance,” Perrault said. “Certainly, many other towns are facing much greater struggles and trying to make it through, and I think it has a lot to do with the people we have in place here who understand this and know…how to solve problems not just recognize problems, but how to find solutions to problems.”

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