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Average City Property Tax Rates to Remain Constant

By Rosa Cao

Cambridge residential property tax rates, originally projected to rise by 2.5 percent, will instead remain constant this fiscal year. This year, an election year for Cambridge city councillors, marks the first time in 10 years that taxes have not risen.

Contentious tax increases last fiscal year resulted in some homeowners’ taxes jumping by 11 percent or more because of updated appraisals of their properties.

This year, 46 percent of homeowners will see their tax payments decrease, while about 50 percent will experience an increase of under $250, according to information provided by the City of Cambridge. The average payment is quoted at $7.38 per $1,000 of property value, the lowest in Massachusetts. The windfall for taxpayers is being funded in large part by $10 million from reserve accounts, which total $53.5 million this year, up from $35 million last fiscal year.

“I’ve been really happy with my taxes,” said Cambridge resident Maura Kilcommons. While Cambridge is an affordable place to live, “I’m lucky, I bought my house 15 years ago,” she said. As for the free cash reserves, “if they can use some of that money to alleviate the pressure on those who are old, who can’t afford the high payments — I think that’s great.”

Lawmakers cited increases in non-property tax earnings, such as the motor vehicle excise tax, hotel taxes, and interest earnings as resources that allowed them to minimize the percentage of the annual tax levy that fell on residential property owners.

Anticipated future sources of income include the newly-negotiated Payment in Lieu of Taxes agreements with Harvard and MIT.

In particular, rises in a recovering commercial real estate market mean that taxes on commercial property will account for 63.2 percent of the levy, 1.9 percent more than last year. The total value of residential property in Cambridge has appreciated at a greater rate over the past five years and remains significantly higher than that of commercial property. Since 1984, commercial property in Cambridge has been taxed at the highest level (relative to residential property) allowed under state law.

Cambridge resident Elie Yarden said he was concerned about inflated property values, which in turn drive taxes higher, potentially driving people from their homes.

John Moot, president of the Association of Cambridge Neighborhoods, said that the City’s free cash might be used for the West Cambridge Youth Center and other large capital projects, rather than for what are essentially tax rebates, to make up for the hike last year.

Stash Horowitz, vice president of the association, said the low tax rate might be unsustainable “if commercial value don’t continue to rise,” and said the city should try to reduce expenditures rather than dig into its reserves.

The city budget has been rising by about $20 million per year for the last few years, while the property tax levy has been increasing by about half that. Other sources of income for Cambridge include charges for services and transfers from the state government.

Property taxes represent almost 60 percent of the city’s operating revenue, while fines, licenses, and the PILOT agreements with Harvard and MIT together account for under 7 percent. The City Council also projects next year’s residential property tax levy to be low.

The city’s property database has recently been enhanced to show assessed values for residential units based on sales of similar units in the same neighborhood. In a meeting on Sept. 26, councillors said they hope this information will improve the transparency of the assessment process and convince residents that their taxes are fair.