Real Data, Real Comparisons: Letter

For anyone still on the fence about how to vote for the override (or even those of you who may have decided to vote against it), this letter is for you. You may be thinking that you can’t afford this override but the truth is you can’t afford to not have it. And you may be thinking that Melrose taxes and school expenditures are already in line with peer communities but when you look at true peers, we are well below them.

A few weeks back, there was a letter incorrectly showing the tax rate increasing by 2.5% each year. That’s not how real estate tax rates work in Massachusetts. Prop 2-1/2 caps the total amount a city or town can collect in real estate taxes (the “levy”), not the tax rate. To keep our total under the 2.5% limit while our home values have been going up in Melrose, our actual tax rate has gone down. Our residential tax rate in 2015 was 12.96% and it has gone down to 10.81% for 2019. After the override, it would bump up to around 11.34% and by 2022 it would be down to around 10.73% - lower than the rate today. (Projections like this are hard to figure since there are many variables involved but going out three years isn’t too speculative.)

Like every other community in Massachusetts, regardless of what happens with the override and property values, Melrose will continue to tax at what is allowed by Prop 2-1/2. So if the override fails and Melrose is no longer as hot a market and property values do not continue to go up but the tax levy is still capped at 2.5%, that means the tax rate will go up. In which case you will still be paying the highest taxes that Prop 2-1/2 allows except you’ll have less value in your house and less city services to show for your taxes. That’s not saving money- that’s getting less for the money you are spending.

To see how Melrose compares to other communities, I looked through data for many different cities and towns and compiled the data into charts and graphs. I’ve posted the full data and results and sources publicly at kentruesdale.blogspot.com for anyone to look through. But to summarize the data, there are only two cities and towns that have similar per capita income, similar residential tax percentage and similar total tax levy that are in similar geographic proximity to Boston: Reading and Milton.

Milton’s per capita income is only 9% higher than Melrose but their average single family tax rate is 50% higher than Melrose and their per pupil expenditure is 22% higher than Melrose and they pay their teachers 27% more than Melrose.

Reading, which is our closest comparable community, has an average single family home value only 7% higher than Melrose but an annual average single family property tax is 40% higher than Melrose. To show how much higher that is, it would take a $22M override for Melrose single family taxes to be raised up to the amount of Reading’s. The override we are voting for in Melrose is less than a quarter that size.

When looking at the communities that are similar to Melrose in the ways that matter for determining property tax, it’s clear Melrose’s issue isn’t a spending problem but a revenue problem.

Finally, there may be some of you reading this who may still be in denial about the realities of our city’s plight. You may even find yourself echoing the statements made by opponents of the override and say the override “just can’t be” needed in this amount or thinking that we are “doing fine” today. I know it is tempting to not want to believe things that are unpleasant and it’s hard to plan for the future. I’m not thrilled with the idea of needing an override either. But we don’t do an override for today, we do it for tomorrow. And considering how we compare to other communities and given the facts about why the override is needed, a vote for the override is a vote for facts and reason while a vote against it is a vote for some imaginary utopia where we get the services we need but without having to pay for them.