Montague ups FirstLight tax by $1M
MONTAGUE — The town will ask the FirstLight Hydro Generating Co. to pay about $1 million more in taxes this year than last year, which is good news for other taxpayers — if it holds.
The proposed tax rates for the current year are lower than last year’s, driven by a substantial addition to the industrial tax base from the latest valuation of FirstLight property, but Director of Assessing Barbara Miller said this could be short-lived.
The rates could boomerang significantly next year if, in a worst-case-scenario, FirstLight were to overturn the valuation hike in a probable appeal, forcing the town to reimburse the utility.
Miller, however, said a significant court award is unlikely, saying she is confident the new valuation would stand up before the state tax board, and it is likely the town and FirstLight will reach an agreement before any appeal came to trial.
The issue will most likely be resolved by a new three-year agreement, Miller said. Miller said the triennial agreement has not yet been reached because it takes time to negotiate an agreement on such a sizeable change in value, and tax bills are due to be mailed.
Such tax agreements are not standard for big business but provided for under state law only for electrical generation facilities.
In the first year, an agreement could be reached through the tax abatement process, Miller said, with the utility filing to pay a lesser sum.
“If they’re willing to come up pretty close to that amount we might decide to grant the abatement,” Miller said. An agreement would then apply to the next two years, and an appeal to the state board would no longer be possible.
The quasi-judicial Massachusetts Appellate Tax Board decides tax appeals.
The Montague Board of Selectmen is scheduled to meet Monday to vote on the proposed rates for the tax bills to be mailed this winter.
Miller told the board a professional assessment of the FirstLight power plant on the Connecticut River power canal increased the property’s taxable value by more than $44 million or 60 percent this year, from $73 million to $117 million, equating to a $1,045,967 increase from last year’s $1,876,107 tax bill.
“FirstLight will undoubtedly be taking us to appellate tax court,” Miller told the selectmen. The quasi-judicial Massachusetts Appellate Tax Board decides tax appeals.
Miller said the town spent $20,000 on the outside assessment, and she and the appraiser were confident in the result.
“I questioned our appraiser very, very thoroughly over this appraisal,” Miller said.
If the worst case scenario were to play out, Miller said the town could be required to return a portion of FirstLight’s tax bill greater than the sum the town is legally permitted to hold in reserve for such cases.
In that circumstance, the town could seek special legislation to either raise the deficit over multiple years or borrow, she said.
Overall, the total taxable value of property in town increased 7.04 percent, but that percentage was more than accounted for by the new FirstLight valuation and $14 million in new growth from Western Massachusetts Electric Co., Miller said, indicating a large decrease in the combined value of all other property.
Montague has a split tax rate, with the selectmen each year setting the portion of the tax burden bourne by each class.
The proposed residential rate for the current fiscal year is $16.34 per $1,000 of assessed value for residents, a 4.1 percent decrease from $17.04 last year. Property in the commercial, industrial and personal property class would be taxed at a rate of $24.85 per $1,000, down 2.6 percent from $25.51 last year. Under the proposed 1.315 percent shift between classes, the residential class carries 60.487 percent of the levy and businesses 39.51 percent.
Miller said she wanted taxpayers to know the split rate means Montague taxes businesses at a higher rate than neighboring Greenfield, where businesses and residents are taxed at a single rate of $20 and change.
The tax hearings begun Wednesday continue Monday in the Town Hall, beginning at noon with the Turners Falls Fire District, followed by the Montague Center Fire District at 12:30 p.m., the Montague Lighting District at 4:30 p.m. and the Town of Montague meeting at 5 p.m.
You can reach Chris Curtis at: email@example.com or 413-772-0261, ext. 257