Every year, each of our select boards is required to conduct a tax classification hearing and decide how to allocate the town’s property tax burden. And every year, these hearings generate arguments about the residential tax exemption (RTE), an optional tax break that the boards can choose to adopt.
The basic idea is that most year-round residents get to pay a little less, and second-home owners must pay a little more. Understanding exactly how the progressive design of the RTE works requires some fancy math, and some of the arguments over its effectiveness in helping not-wealthy people to live here are technical.
But the loudest complaints of its critics are more emotional than political. Some part-timers feel insulted by the very idea that they should have to pay more tax than their year-round neighbor, especially given the fact that they can’t vote in the town elections that select the officials who decide whether to levy that higher tax on them.
The most aggrieved of these part-timers have even suggested that they would stop donating to local charities and arts organizations if the RTE were to be adopted. “Where would you be without us?” they ask.
The truth, of course, is that the Outer Cape would be a very different and poorer place without our seasonal people (and not just because of their wealth), and that the vitality and resilience of the year-rounders make this place worth returning to and, for many, retiring to.
Last month, the Eastham Select Board again decided not to adopt the RTE, having heard, apparently, a large number of “vehement” objections to it. Instead, town officials will look for ways to raise other taxes, like the short-term rental tax. This is a false choice. The RTE is not a way to raise more money; it is “revenue neutral.”
The RTE is simply a less-than-perfect way to make the existing tax burden more fair by asking those who have more to pay more. One of its best features is that those year-rounders who don’t need the tax break can simply not apply for it — thus increasing the size of the benefit for those who do need help.
The loss of working people and families in these towns is a growing catastrophe in the making. One argument against the RTE is that it won’t solve the problem. That’s true. But fixing this requires us to deploy every tool at our disposal, and the RTE is one of those tools.
Eastham’s leaders are wise to be looking at other sources of revenue, like a real estate transfer tax on very expensive properties. They should use such funds to preserve what is so valuable and endangered in community life, and each of our towns should do the same.