Residents brace for 12% tax increase

Marlborough homeowners face an average tax hike of 12 percent, the largest increase in years.

Hardest hit are owners of single-family houses, particularly moderately priced houses in the downtown area, and small condominiums.

The owner of the average house, assessed at $312,000, will pay about $3,800 next year, following City Council approval last week of a budget strained by several years of increased costs, particularly health insurance, and declining aid from Beacon Hill.

''It's one of the highest, if not the highest, tax increases in Marlborough's history," said City Council president Arthur Vigeant.

Under the state tax-cap law, Proposition 2, communities may not raise their property-tax ceiling by more than 2.5 percent a year, not including new growth. But Marlborough, inundated with new development over the past decade, has never taxed residents the maximum, leaving it room to raise taxes without asking voters for approval.

''Until now, the new growth has offset spending increases," said City Assessor Anthony Trodella.

The value of average single-family houses rose 8 percent, and two-family houses climbed 7 percent. Commercial values stayed flat. But many families will be saddled with far heftier bills. Owners of some two-family houses will pay 20 percent more than last year, and owners of small condominiums may pay as much as 40 percent more.

The increases will fall especially hard on residents who own moderately priced houses, which are climbing in value faster than more expensive houses. City councilors raised the property tax exemption by $7,000 to partially offset the increase, but expressed regret over the financial hardship higher tax bills may cause.

''There could be a 20 percent [tax] increase on inner-city homes," Vigeant said. ''I'm worried about how homeowners are going to handle that."

The raised exemption allows homeowners to deduct $36,486 from their assessed property value, up from $29,000 this year. Proportionately, that provides a greater benefit to owners of lower-priced houses.

Vigeant said the increase was the inevitable result of budget increases exceeding inflation and moderate commercial growth, and he called for stricter fiscal discipline next spring. The city had to raise $8 million more than it did last year to pay for its $100 million budget, adopted last June.

Under the new tax rates, businesses will shoulder 46 percent of the total tax burden, and homeowners 54 percent. Residents will pay $13.78 per $1,000 of assessed value, and business owners will pay $26.68.

Susanne Morreale-Leeber, president of the Marlborough Regional Chamber of Commerce, said local business owners are pleased the city did not place more of the tax burden on their shoulders. Leeber said higher taxes would dampen the local economy by deterring business growth.

''Let's not shoot the golden goose," she said, adding that the tax rate was not to blame for the current 23 percent commercial vacancy rate, which has strained the city's coffers.

Mayor Dennis Hunt said he was disappointed in the size of the tax hike, but noted that Marlborough has avoided charging fees for municipal services.

''You look at any community, they are feeing families to death," Hunt said. He said he expected the sharp increase will prove an exception caused by an unusual combination of declining state aid and higher healthcare costs.

In January, officials discovered a $4 million deficit in the city's health insurance plan, which they bridged by raising employee contributions and diverting money from other city accounts.

The city pays 70 percent of healthcare costs for some 1,300 current and retired employees and family members.

Amy Loveless, executive director of the Council on Aging, said seniors had feared even steeper increases, and are now caught between feelings of relief and unease.

''They were holding their breath, but they haven't completely exhaled," she said. Coming at a time of surging prescription drug costs, high property taxes can have a ''pretty profound" impact on the elderly, she said.

Fatinha Kerr, who runs Marlborough Community Services, a social services agency, said that, while the additional tax burden is likely to deepen some homeowners' financial troubles, poor and working-class families tend to rent apartments, and would be affected only if their landlords raise rents to offset the tax increases.

''They have more pressing financial worries than the tax rate," she said. Kerr said she supported a higher city budget if it meant bolstering programs that will ''improve the quality of life for the majority of people."

The council last week declined to vote on Hunt's request to borrow $2 million to buy the Mauro Farm, saying the city cannot afford it now. A developer wants to build 27 houses on the 15-acre parcel. Hunt said he would now seek to purchase just part of the land for preservation.