During a tax classification public hearing on Monday, November 16, the Mashpee Board of Selectmen voted 3-2 to maintain the status quo with a uniform tax rate for all properties in 2021.
The tax rate is expected to decrease five cents from $8.96 per $1,000 in assessed value in 2020 to $8.91 per $1,000 in assessed value in 2021, Mashpee Director of Assessing Jason R. Streebel said.
Selectman Andrew R. Gottlieb and Selectman David W. Weeden voted against maintaining a uniform rate for all properties, saying a split rate known as a residential exemption would provide greater benefit to most year-round residents.
“We talk all the time about trying to support our year-round residents who are struggling through what they’re struggling with and have challenges about income on Cape Cod,” Mr. Gottlieb said. “If it is within our ability to provide a tax break, a property tax break to 95 percent of the year-round residents in this town through our own vote, why wouldn’t we do that?”
The board voted unanimously to consider including articles on a Town Meeting warrant that would fund the costs associated with implementing a residential exemption for 2022.
A residential exemption would apply to residential properties that are the principal residence of the taxpayer, raising taxes on second homes and rentals while lowering them for most year-round residents.
The residential exemption would have no effect on the taxes imposed on businesses or nonresidential properties, Mr. Streebel said. The total tax levee would also remain unchanged.
The selectmen could set the exemption anywhere between 1 and 35 percent.
In effect, a residential exemption would raise the tax rate, but since a percentage of the total property valuation for principal residences would be exempt from taxation, tax bills would decrease for most year-round residences.
If a 35 percent residential exemption were to be applied in 2021, the tax rate would be $11.12 per $1,000 in assessed value, according to an approximated model of the residential exemption by Mr. Streebel.
The estimated 3,800 taxpayers who qualify for the exemption and own properties between $171,000 and $400,000 would see a decrease of $948 or more in their tax bill, according to the model.
On the other hand, the estimated 1,554 taxpayers who own property of the same value that is not a primary residence would pay about $864 more on their tax bill.
“My premise here is that most of us have the majority of the money that we have in the world tied up in our home; I don’t know about you, but I do,” Mr. Gottlieb said. “By definition somebody who has a second home objectively has more wealth than somebody who has a single home.”
“Therefore, shifting a property tax burden among those two classes of owners shifts some of the burden to those who by definition are better-suited to be able to deal with that tax burden,” he said.
Residents who qualify for the exemption would begin paying more in taxes when their assessed property value totals more than $840,000, according to Mr. Streebel’s estimates.
Mr. Weeden said he came to the tax classification hearing prepared to consider a residential exemption and a small commercial exemption and to debate the rates for each.
“It seems most beneficial to the most modest of homes, and those are the people who are struggling the most,” Mr. Weeden said of the residential exemption.
“I’m less sympathetic to the second-home owners that come here; I think they can afford to live here,” he said. “Everybody has heard the phrase that they’re trophy homes, so I’m less sympathetic to them and more sympathetic to the year-round residents who live here and struggle to live here because it’s hard to afford to live here.”
Mashpee has a varied housing stock. While about 65 percent of residential properties fall within the $171,000 to $540,000 value range, more than 350 properties are worth more than $1,391,000. Billionaires Robert K. Kraft and Valentine P. Gapontsev both own more than $10 million in residential property in Mashpee, according to assessing records from 2019.
Mr. Streebel told the board he would need advance notice to implement a residential exemption because a mail study and software upgrades would be necessary.
Mr. Gottlieb suggested that about $11,000 in costs associated with the mail study and software upgrades go before Town Meeting to gain feedback from town voters over whether a residential tax is something they would be interested in.
“Town Meeting could tell us we either like the idea and we want to pay for it or they could tell us it’s not fair and not pay for it,” Mr. Gottlieb said.
The chairman of the selectmen, John J. Cotton, noted a counterargument against the residential exemption but said, “I’m not against putting this in front of the voters and letting them speak.”
“I’ve heard this before and I heard this when I was running for selectman five years ago, which was those people that come here during the summer, maybe they’re only in the house a few weeks a year, a couple months a year, they bring money back into the town and they use the least amount of services but they’re paying equal to everyone else,” Mr. Cotton said. “I’m just saying that’s the other side of things, and I have to consider that.”
Selectwoman Carol A. Sherman agreed the residential exemption should be explored for 2022 but not implemented in 2021.
“What we do is we do this and now we investigate it for next year and have a Town Meeting article,” Ms. Sherman said.
Selectman Thomas O’Hara said he is opposed to a residential exemption.
“It’s almost as though its one of these taxation without representation,” Mr. O’Hara said. “It’s easy to become a hero here and vote to change the system and let the people with the second homes pay the bulk of the taxes and reduce the taxes for the residents in the town represented by us, but it just doesn’t—it wouldn’t make me feel good to do that. I think that the citizens that own these second homes pay an awful lot in taxes. They do own some beautiful homes, and good luck to them, and I’m happy to have them as neighbors, but they also create a lot of jobs, and they’re also very generous to the community.”
Mr. Gottlieb noted that a residential exemption is not “some foreign, weirdo idea.”
Multiple towns on Cape Cod, including Barnstable, Orleans, Provincetown, Truro and Wellfleet, have residential exemptions. Barnstable’s residential exemption has been in place for more than a decade.