EASTHAM — The select board voted 3-2 on Monday to implement a residential tax exemption (RTE) for the current fiscal year, which began on July 1, joining the other three Outer Cape towns for the first time in allowing resident homeowners to exempt some of the assessed value of their homes from property taxes. Aimee Eckman, Jamie Demetri, and vice chair Suzanne Bryan voted in favor of adopting the policy; Bob Bruns and chair Jerry Cerasale voted against it.
The board then voted 4-1 to set this year’s exemption at 3 percent of the assessed value of the average residential property in town — a fraction of the former statewide legal maximum of 35 percent, or the new maximum of 50 percent that is available to designated “seasonal communities” on Cape Cod and the Islands and in the Berkshires under the state’s Affordable Homes Act.
Demetri was the lone vote against setting the amount at 3 percent, saying she supported an exemption of 5 percent or more.
“I think that at this point, our residents have waited a long time to see this coming around, and I want it to be impactful,” Demetri said. “Not that I think 5 percent is impactful,” she added.
Other board members and the town’s finance director, Rich Bienvenue, said the exemption would likely increase in the future.
“I always try to look long-term and be strategic,” Bienvenue said. “If we’re going to increase it in the future, we should be strategic about phasing that in.”
Bienvenue said he wanted future tax breaks that could be generated by the policy to offset the burden residents will face from projects like the town sewer system.
The board of assessors had also voted to recommend a 3-percent exemption, Bienvenue said. His presentation to the select board included charts on the savings to resident taxpayers — and the costs to nonresident taxpayers — for exemption levels of 3, 5, and 10 percent.
“I’ve had people mention to me their disappointment at 3 percent and their desire for it to be higher,” Bryan said. “But this is the safest option for the town. I support the idea of being able to stabilize people’s taxes with incremental increases.”
How the RTE Works
Three percent of the average assessed value of a residential property in Eastham is $24,332. At the town’s current property tax rate, that exemption amount translates to a saving of about $116 on the tax bill for a median-value single-family home here, Bienvenue said. (The initial tax benefit from a 3-percent exemption is $189.58, but some of that benefit is erased by the higher tax rate imposed on all remaining residential value after the exemptions are tallied.)
According to Principal Assessor Colleen Mercurio, 2,584 properties — about 45 percent of the town’s total — could qualify for the exemption.
For nonresident property owners, a 3-percent exemption would translate to about $74 of added property tax on a median-value single-family home in Eastham, Bienvenue said — that is, if all 2,584 resident-occupied properties claimed the exemption.
So far, the town has received exemption applications from only about 1,350 property owners, Mercurio told the select board.
If that number doesn’t change, Bienvenue said, then the savings to residents and the costs to nonresidents would both be different: residents would save more, about $150 on a median-value home, while nonresidents would pay less, about $38 on a median-value home.
That is because the adjustment to the overall residential tax rate will be smaller if fewer people claim the exemption, Bienvenue said.
An initial deadline has passed for residents to see the exemption on their fall property tax bills, Bienvenue said, but residents can still apply for the exemption until next April 1 and receive its value as an abatement.
An overlay account that was funded at spring town meeting will pay for those after-the-fact abatements, Bienvenue said.
Tense, but Brief
About 40 people attended the select board’s meeting at town hall on Monday to watch the vote, and the atmosphere was tense.
The decision to adopt an RTE had already been settled in a pair of votes in January, as the town has a policy of making an early decision at that point to give the assessing dept. time to prepare. The board had not decided what exemption amount to adopt, however.
Cerasale said that since the board had “probably heard virtually everything” about the RTE since its January votes, he would limit public comments on the policy to three in favor and three opposed.
Natalia Redyk, Mike Cicale, and Jonathan Georges, who spoke in favor of the RTE, all said it was an important tool to make living in Eastham more affordable for working people unequipped to deal with skyrocketing property values.
“When I get priced out of here and sell, the people who move in aren’t going to be DPW workers,” said Cicale, a former DPW employee.
Redyk said the RTE was “neither newfangled nor revolutionary” and that the select board should consider a higher exemption percentage.
“A hundred and fifty dollars is enough for an A.C. unit or school supplies, but we have neighboring communities with an RTE at 20 to 30 percent, which can save the local homeowners real money,” she said.
The RTE in Provincetown is 35 percent, which provides a tax discount of $1,734 to the resident owner of a median-value single-family home there, according to data from Provincetown Assessor Scott Fahle.
In Truro the RTE is currently set at 35 percent, while in Wellfleet it is 33 percent.
Tom Gardner, Fred Guidi, and Tom McNamara, who is president of the Eastham Part-Time Resident Taxpayers Association, spoke against the RTE, arguing that a more targeted measure would better address the needs of taxpayers and the town.
“What is the problem you’re trying to solve?” Guidi asked. “Is the problem that taxes are too high and we all can’t pay them?”
“It’s clear there is confusion and unanswered questions about what the problem is you’re trying to solve, how big it is, and why the RTE is a solution,” McNamara said. “Towns repeatedly seek to raise the RTE percentage in the face of not seeing the desired results — when does this absurdity end?”
After the public comments, board of assessors chair Dave Hobbs also spoke to the select board.
He had at first been opposed to the RTE, he said, but after consideration he decided it was an important way to help retirees afford to stay in their homes.
“We’re trying to help the people who need it,” he said. “We care about these older individuals, and we want them to be part of the community.”
When Hobbs finished, Cerasale called for discussion, but most board members spoke only briefly. “I think I’ve made a lot of discussion,” Demetri said. “I’m going to let the rest of the board have it out.”
“I think most of you know that I’m against the RTE,” Bruns said. “Simply put, I think it’s unethical to shift more of the tax burden from one group to the other based on assumptions of one group’s financial needs and another group’s ability to pay more.”
“I’ve said my piece often,” Cerasale said. He lamented the tension he’d observed between full-time and part-time residents, adding that “my hope is that after we vote, we all get together and try to see what we can do to help this wonderful town.”
Eckman, who plans to retire from the select board at the end of her fourth term next spring, also spoke briefly.
“We need to use every tool that we have to help keep our residents in their homes,” she said. “No one policy is going to solve everything, but when you layer in all these little things, they add up to something impactful.”
