Summer Residents: RTE Unfair, Divisive; Select Board To Vote On Tax Measure Next Week

CHATHAM – The select board will vote next Tuesday, Sept. 1, on implementing a 20 percent residential tax exemption. While a majority of the board favors the exemption, members received an earful from summer residents last week who oppose the measure. 

 Summer resident after summer resident took to the microphone at the Aug. 18 summer town meeting to decry the residential tax exemption (RTE) as unfair, divisive and of questionable efficacy. They questioned who the property tax break would help and whether other, more targeted measures could be implemented to provide relief to struggling year-round homeowners.

 “If there are people in this town who need help, by all means, the town manager should come up with a plan and let’s help those people,” said Suzanne Miska. But shifting the property tax burden from year-round to non-resident property owners is “unacceptable,” she said.

 Proponents of the RTE say it will help year-round homeowners who are struggling with the high cost of housing, food and other necessities. Select board Chair Jeffrey Dykens allowed that it is a broad approach that doesn’t take income or other measures of wealth into account, but said it would help provide “some modest relief” to local residents.

 “I know you think it’s a cudgel, but it’s a tool in our toolbox,” he said. “Year-round residents are frankly buffeted by market forces that are beyond their control. Chatham’s popularity in fact has driven property values so high that it is nigh impossible to get a foothold in this town, purchase property and live here.”

 The RTE is opposed by the summer residents advisory committee, which sponsored the summer town meeting, as well as the town’s finance committee, which last week issued a 13-page report recommending that its implementation be delayed while other avenues of relief are explored.

 About 920 of the town’s approximately 3,200 year-round property owners have been approved for the exemption, which, if approved, will apply to the current year’s tax bills, said SRAC member Thomas Garvey. A “significant” number of the approximately 1,000 year-round properties held in trusts may not qualify, he said, nor would about 100 or so that are owned by LLCs or other entities. Renters also will not receive any benefit from the RTE, he said.

 “There’s going to be a group of people who will not benefit from the proposed exemption,” he said. “We continue to believe that those people that are in town that need assistance should get assistance from the town, we just don’t agree with the structure of the proposed exemption.”

 An analysis by the assessing department shows that a property at the average value of $1.6 million will save $748 on its property tax bill under the 20 percent exemption. A property with the same value owned by a nonresident would pay $575 more. The measure is revenue neutral — it does not change the amount of property taxes the town will raise — but it shifts the tax load from resident to nonresident owners, Garvey said.

 “Overall, the state’s residential tax exemption is a blunt tool [and] applies the same benefits to a home whether someone is in financial hardship or very financially comfortable,” said Garvey. There is currently no mechanism in the law to apply a means test to the RTE, he added. There has also been no studies to determine the effectiveness in other Massachusetts towns that have adopted the RTE, including several on the Cape, he said.

 “We just think the RTE is the wrong tool,” said SRAC Chair Jeff Spalter. 

 “I just want to say that I’m kind of saddened by what’s going on right now with this residential tax exemption,” said 14-year summer resident Noreen Powell. Many summer residents support local nonprofits such as food banks and churches that have programs to help those in need, but changing tax policy without a means test is not the right move.

 “It does feel like a kick in the gut to summer residents,” she said. “It feels very hurtful and divisive.”

 Many seasonal homeowners are not wealthy, said Miska. “I don’t appreciate being told that I’m a millionaire, that I have all this money, because if I do, somebody needs to tell me where it’s located, because I didn’t bring it with me,” she said.

 Karolyn McClelland, chair of the town’s community housing partnership, said several members of the SRAC receive resident-only property tax breaks in their home states. That’s comparing “apples to oranges,” Spalter said, since many of those exemptions are available statewide, while the RTE redistributes tax liability locally and hurts not only summer residents but some year-round property owners as well.

 Dykens and fellow select board members Stuart Smith and Randi Potash have said that they favor the RTE, while Dean Nicastro and Cory Metters have opposed the measure. Potash said she spoke with state Senator Julian Cyr, D-Provincetown, about incorporating a means test and was told because that would require homeowners to submit detailed personal finance information to the town, “it’s not going to happen.” 

But she defended the RTE, noting that second home purchasers have driven up property values in recent years, putting most homes out of the range of local working people. Tax funds the town must raise through property taxes support services — such as police, fire and public works — that are geared toward the higher summer population and “in excess” of what year-round residents require, she added.

She said she heard a lot of support for the RTE among voters when she ran for select board, and supports putting it in place to see what impact it has. The board must vote on the RTE annually and can revoke it if it wishes, she noted. 

While he agreed the RTE is a blunt instrument, Peter Metz, a 30-year summer resident, supported “running an experiment” to find out if it helps year-round residents.

“If you want to do the right thing, sometimes you have to take a little bit of a chance,” he said. “But make sure it’s revocable.”

Dykens noted that the town has sought special legislation to increase its ability to support seniors in need through property tax reductions and other measures, and Nicastro added that a taxation aid committee set up last year is charged with identifying and helping seniors and veterans who are in financial difficulties. He said he’d like to see the town file special legislation to expand the group’s charge to cover all year-round residents, not just seniors and veterans.

The finance committee’s report reaches a similar conclusion, calling on the select board to delay the RTE while other avenues to support struggling year-round residents are explored. The group identified some 28 support programs in town, but found that there is no centralized clearing house and that a large segment of the population who are not senior citizens or do not have children have no assistance programs.

The Sept. 1 tax classification hearing, where the select board will vote on implementing the RTE and determine the percentage (as a designated seasonal community, the town can adopt an RTE of up to 50 percent), will be held at 5:30 p.m. at the annex.