Barre to look at loophole in tax stabilizations
Toolbox
By David Delcore Times Argus Staff - Published: June 21, 2007
BARRE – The city's assessor would like to re-write several tax stabilization agreements that have been issued in recent years, including one formerly held by Mayor Thomas Lauzon and another that was granted more recently to the business partly owned by Councilor Kevin Spaulding.
Assessor Joe Levesque told city councilors this week that he believed the agreements should be revised so the assessments of the properties involved can be altered annually. He also suggested the council consider closing a loophole that has inadvertently required local taxpayers to collectively pay a portion of the education tax bills for businesses like Community National Bank and Buttura & Sons Granite.
According to Levesque, the six active stabilization agreements, like the one Lauzon obtained for Community National Bank and Spaulding subsequently received for Miles Supply Co., added roughly a half-cent to the tax rate this fiscal year and that figure will likely climb above .6 cents for the fiscal year that starts July 1. That rate increase will be needed to pay the state education taxes on the full values of the stabilized properties, according to Levesque, who said taxpayers are collectively picking up nearly $13,000 in education taxes for Community National Bank alone.
Although Levesque said it was ultimately up to the council to decide whether to continue that practice, he said the past practice of setting "fixed values" in the agreements must be abandoned, in favor of a more fluid fair market approach.
"The council has the right to set any taxable amount … you want, (but) the assessor sets the value," he said, suggesting the stabilization agreements could be redrafted to reflect plans to incrementally increase the percentage of assessed value that would be taxed each year for the term of the agreement without arbitrarily fixing that value in advance.
Lauzon, who was quick to note that he has sold the Community National Bank building since obtaining the stabilization agreement, said he had no problem with a percentage-based stabilization system that does not fix the value of the property for the duration of the agreement.
"Both as mayor and as a one-time recipient of tax stabilization agreement, I always understood it to be a percentage," he said. "I don't think any reasonable person … could expect a property value to remain stagnant for 10 years."
However, Lauzon questioned whether the council could retroactively rescind agreements to stabilize both municipal and education taxes.
"Can we unilaterally go back to the building owner(s) and say: 'Well, we're going to change this now," he asked. "My suspicion is the answer is: 'No.'"
Lauzon said the problem, which was first identified by former Mayor Peter Anthony, has been corrected and the city would no longer offer to stabilize taxes for educational purposes. That relief, he said, must come from the state.
The problem, Lauzon said, is the developers, like him, who received the flawed stabilization agreements from the city, lost their opportunity to seek that similar relief from the state.
"That bothers me," he said.
Councilors agreed to have City Attorney Oliver Twombly review the six active agreements before deciding whether to change them before tax bills are calculated next month.
In addition to contracts with Buttura & Sons, Miles Supply and Community National Bank, the city has active stabilization agreements covering Sean and Nora's Restaurant, the old firehouse on South Main Street and the North Main Street property where Videovision's office and studio are located.
In other business Tuesday, councilors:
42