Westborough proposes using free cash, levy capacity to lower tax impact

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Westborough town iconWESTBOROUGH – Westborough town staff have been working on lowering a projected increase to the average single family’s tax bill.

Initially forecasted to jump by $1,290 for the next fiscal year, recent figures now project a $1,087 increase if the town opts to use resources like free cash and its excess levy capacity to dampen effects.

The average tax bill for condominiums would increase by $680.

Staff present evolving projections

Staff gave their $1,290 figure in December.

They’ve since regularly updated the Select Board on the projected tax impact and ways they plan to ease that impact. These include cuts to the town salary and wages line item within the budget.

In late January, Town Manager Kristi Williams presented measures that would have lowered the increase to $1,107.

Since then, Williams told the Select Board on Feb. 22 that the school district has level-funded its transportation budget, removing a $132,000 increase. The town has also gone through the second quarter of the current fiscal year and was able to increase its estimated receipts by $230,000, she said.

This latest increase of $1,087 takes those changes into account.

It also factors in a plan to use $1.037 million in excess levy capacity and $471,259 in free cash to offset costs.

Williams’ recommendation is that any savings realized by unknown budget items should be used to lower the use of free cash. The town has about $13.8 million in excess levy capacity.

Select Board responds

Select Board members have voiced concerns about the projected tax increase.

Patrick Welch spoke up in response to the projection when it was presented in January, noting concerns that it is too high.

“This is a difficult conversation,” he said.

Welch recognized the work that Williams’ team has put into the budget.

“There are people in this community who are facing difficult decisions,” Welch said, though. “We certainly don’t want to be forcing them to decide between a roof over their head [and] paying their taxes, prescriptions, those type of things.”

“I’m not trying to lay that blame on you, Kristi,” he continued, speaking directly to Williams. “It’s the way of the world. It’s taxes. We need to pay for our services. I totally recognize that.”

Select Board member Ian Johnson noted progress at the Select Board’s latest meeting n February.

“It’s creeping closer to getting that down to three digits,” he said.

Tax increase

Assessors estimate that the average single family tax bill in Westborough for the current fiscal year will be $10,328.

In 2022, the average bill increased by $325.

Tax bills in 2021, in turn, represented a $228 increase over 2020.

In comparison, the projected $1,087 spike for 2023 would be one of the largest individual increases in Westborough’s history.

Williams attributed that to budget increases and increases in property values.

Even if the town’s budget didn’t increase, Williams estimated in January that the average tax bill would still rise by $515 because the increase in the value of residential properties “far exceed” the values of commercial and industrial properties.

Her presentation last month showed how the value of commercial, industrial and personal property has fallen, which she said prompted this shift in the tax burden to residential property owners.

“We’re going from a 70- 30 [percent] split to a 72-28 [percent] split,” Williams said at the time, referring to the distribution of residential and commercial burdens.

Beyond those factors, the town’s health insurance costs are also helping drive up tax bill.

Westborough is estimating a nine percent increase in that health insurance budget, which covers town and school staff and retirees, for 2023.

A nine percent increase translates to just over $1 million. That alone contributes $133 to the estimated increase to the average single family tax bill.

As far as managing the increase, Westborough has continued some of its COVID-19 budget cuts. All personnel requests — including new positions and increases of hours — have been deferred.

Those deferred positions include a community development assistant, whose duties would have included implementing Westborough’s Climate Action Plan, and a new fire captain.

Despite that, there are still some new personnel still in the budget that were added outside of the personnel request process. These include a grant administrator/chief procurement officer that was added in October.

This is also the first year Westborough will fund the cost of eight firefighters positions that were initially funded using grant money. These included positions represent $153,657 of a total $213,209 in salary and wage increases.

While it includes those costs, the town’s budget does not include cost of living adjustments for four of its unions whose contracts will expire in June.

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