I commend the Select Board for considering the issue of tax fairness.

And I hope they decide to leave the rates alone.

They are considering three different rate change scenarios, one of which would create a Residential Exemption for owner-occupied homes, another which would create a split-tax rate that would shift more of the tax burden to businesses, and a third would create an exemption for smaller businesses, shifting more of the burden to larger ones.

None of these changes would result in additional tax revenue for the Town – they merely redistribute the current taxation.

Gerry Weiss of the Select Board explains the three scenarios clearly in a column in the Bulletin.

The intention of the residential exemption would be to help people who are struggling with their growing tax bills. It assumes that people with homes with lower assessed values have less money than people whose homes have higher assessed values, and shifts the burden from one to the other.

I don’t happen to view the current system as “unfair” and don’t feel it needs to be fixed. But I recognize that it amounts to a flat tax, and progressive taxation such as we have with income, is not unfair either.

But there are problems with this concept.

Undeniably, there are people in Amherst for whom paying property taxes is increasingly difficult. But we don’t know who or how many and we don’t know their assessed home values. Just as there are people with less expensive houses struggling to make ends meet, there are those with more expensive houses in the same situation. Being “house rich and cash poor” is not unusual in a real estate market that has ballooned the way ours has for much of the last decade, up until about 18 months ago.

The proposed Residential Exemption lacks any ability to target those who need it, or to make any measurable difference for them. If that is the goal – to help those struggling with property taxes – wouldn’t it be better to find a way to really help them, along the lines of an Earned Income Property Tax Credit, perhaps – rather than saving 3600 homeowners a couple hundred bucks each, whether they need it or not?

Furthermore, because landlords (whose properties would not be eligible for the exemptions and hence would be facing higher taxes) would almost certainly pass the burden along to tenants by increasing their rent, that belies the notion that this change would assist our financially struggling neighbors. Renters too are both struggling and non-struggling, but it is probably fair to assume that homeowners are typically better-off financially than renters

Residential exemptions work in places where many non-residents also have homes – places like Cape Cod or Florida. You shift the burden to those for whom the house is not a necessity, but a luxury. Among the reasons this works: A) second-home owners don’t vote locally, so they can’t do anything about it; and B) in such highly-desirable locations, there are always new second-home buyers willing to replace any who are driven out by the high taxes.

Ours is not a second-home area. We would be shifting the burden from some of our neighbors to others of our neighbors, based only on an arbitrary judgment of how the value of their homes represents their solvency.

On to the business rates.

Split-tax rates that shift more of the tax burden to businesses are much like the residential exemptions in resort areas. If you are certain that those whom you are sticking with the higher rate will either not leave or will be easily replaced if they do leave, then this is not a bad scenario. It’s a classic situation of “what the market will bear.”

Amherst’s business community is not of that model.

Our business tax base is already very small. As Mr. Weiss details in his explanation, the small savings that would accrue to individual home owners would result in large increases to the individual businesses. That’s because we have a lot of the former and few of the latter.

And in recent years, larger businesses have left Amherst for reasons unrelated to taxes, but due to what many believe is already a hostile business climate. They have not been replaced. Circumstances are such that businesses do not flock to our Town. Increasing that sector’s share of the tax burden would only exacerbate that situation.

If one is “anti-business,” one might think, “Good then, let’s tax the heck out of them until they all go away.” But then what happens to the part of the tax levy no longer being paid by businesses? It has to come from somewhere, and the only somewhere left is to increase the residential share.

I believe arguments against an exemption for smaller businesses follow similar logic. Additionally, the dividing line between what makes a business large or small is whether they have 10 or fewer employees versus 11 or more. Not exactly the difference between Ye Olde Shoppe and Wal-Mart; more like the potential difference between Fred’s Pizza and Al’s Pizza. Add to this the complicating factors of most small businesses leasing rather than owning their space, and hence not benefiting from such an “assist,” and that concept just seems like a non-starter.

For all these reasons, I hope that the Select Board will again follow the recommendation of the Board of Assessors and not alter the tax rates.

-- Stephanie O’Keeffe