Aldermen Set Tax Rate

I feel compelled to add some context to recent reports about property taxes. While the Aldermen did, indeed, vote in a tax increase last week for 2019, this annual increase is the standard 2.5% and barely enough for Melrose to keep up with inflation, never mind the growth the city has experienced in recent years.

While our total tax revenue will increase this year, our tax rates have actually been dropping in recent years. At their peak in 2014, tax rates were $13.28 per $1,000 of assessed value. In 2018, these were $11.33 and, with the proposed tax increase for 2019, the tax rate will decrease to $10.81. This is a drop of $2.47 since 2014. The last time rates were lower than today was in 2008, the end of the last housing bubble.

How can rates fall when our taxes increase? Because while home values are rising, Proposition 2.5 limits annual property tax increases to 2.5%, creating a ceiling on the total amount of tax revenue the city can collect. Home values in Melrose rose roughly 7.1% over the past year. To comply with Prop 2.5 in this market, the tax rate must fall.

While Prop 2.5 protects us from excessive annual increases, its framers included an override provision to allow towns to raise more funds when required. Melrose is now at one of those points.
The last time we passed an override was in 1992. With limited dollars, we’ve tightened our belt, but the recent explosion in student population has created a budget gap which the standard 2.5% increase does not address.

Out of 323 school districts in Massachusetts, only twelve spend less per pupil than Melrose. We cannot cut our way out of this. We need more revenue. I implore my fellow Melrosians to join me in voting yes for the override.

Thank you,

Scott Koles
Melrose, MA 02176