Though still over a year away, Hingham officials are looking to provide some relief for an anticipated $320 tax hike in fiscal 2015 resulting from the cost of the new middle school.
Hingham residents voted for a new $60.9 million middle school in Town Meeting in 2011. However, the main portion of repaying the debt for the project won't begin to affect taxpayers until fiscal 2015, which begins July 1, 2014.
“Tax relief is not for this year,” said Town Administrator Ted Alexiades at a meeting with residents on Wednesday. “[But] we know it’s going to go up.”
In fact, the way things stand, taxes are set to increase quite a bit.
The average property tax bill, based on a single-family house valued at $651,950, was expected to rise to $8,352 in fiscal 2015 from $8,032 this year.
With some Hingham residents already struggling to handle their taxes, officials have been looking at ways to reduce that amount.
“This will be the only tax relief proposal that I have heard of in Massachusetts,” Alexiades said. “I’m pretty confident [to] say it’s one of the few in New England, if not the United States, in this economic condition we’re having now.”
School Committee members already reduced the amount of the overall project to $58.4 million, though that had little impact on the overall tax rate.
The market has also helped in some ways. Due to a AAA credit rating maintained throughout the fiscal struggle, Hingham was able to lower its expected interest rate on the project’s debt to 2 percent from 4 percent, shrinking the projected $320 increase.
Though selectmen are reviewing a number of proposals, one plan would be to use money from the local meals tax.
Meals tax money, generated by a surcharge of 0.75 percent on meals purchased at Hingham restaurants, has been accruing since the town voted to install the measure two years ago. Already, the town has collected $1 million.
Expected annual revenue from the tax is at $600,000. That, combined with the money already accrued, could help lower the tax burden to $8,120, cutting the projected increase to $88 from $320.
Other plans include offering residents a check from meals tax money or giving residents a tax credit. A fourth option would be to pay off retirement obligations, which has long-term financial benefits, but would not provide any relief to current taxpayers.
Alexiades has been out in the field looking for feedback on which option to pursue, and selectmen will further discuss the options during Thursday’s meeting.
Whatever option is chosen, the town will have to vote on it during next year’s Town Meeting.
“We have a year to decide how we want to do this,” Alexiades said. “The impact on the property taxes is the wave is coming in 2015. We know what’s going to come towards us. We know we’re going to get a big [bump] on the tax service.”
Although the town hasn’t decided how to reduce taxes, residents attending a meeting about the tax bump were enthusiastic about some sort of change.
“I think the meals tax is a good [option]. Maybe increase it,” said Rick Berry, a 69-year-old who has lived in the town all his life.
His wife, Kathy Berry, and friend Dianne Haley agreed that taxes have gone sky high, and that something needed to be done.
“Especially for us older people on fixed income,” Haley said. “It’s a $400 increase every year. Fiscal year 2015, it’s going to jump? We’re going to be eating dog food.”