HOLYOKE — City Assessor Anthony Dulude noted a 5% increase in single-family home values, as well as an expected $1.5 million increase in revenue, during an online City Council meeting Monday.
“It’s a new world we’re living in, and it’s a new world for all of us,” Dulude began the meeting.
The City Council must set residential and commercial property tax rates for the coming year, but it must wait on financial information from the state before proceeding.
The state-imposed levy limit, the amount in fees and revenues the city may collect, stands at $57.5 million. Last year, the levy limit was $54.7 million, and it was $53.9 million the prior year.
Dulude’s office assessed real and personal properties for fiscal 2021 at $2.3 billion, a $60 million gain in values compared to the previous year. Around $469 million worth of property is classified as tax-exempt or nontaxable.
Despite the coronavirus pandemic and a faltering economy, Dulude expects home values to rise into fiscal 2022, a trend that began five years ago.
The current tax rate stands at $19.07 per $1,000 in assessed valuation for residential properties and $39.70 per $1,000 for commercial properties.
In 2020, the average homeowner paid $3,770, or $93 more in taxes. The average value of a single-family home climbed from $197,000 to $207,000.
Two-family and multifamily home prices also showed positive gains. Dulude credited rock-bottom interest rates and a “global retreat” where homebuyers seek more rural or suburban locales during the pandemic.
“Single-family home sales continue to drive the value up. The city did lose roughly $26 million in commercial value,” he said. “Some industrial values did switch over to commercial due to the cannabis growing industry as we reclassified industrial buildings.”
The Assessor’s Office reclassified marijuana growing facilities as commercial-agricultural, a more accurate description.
The industry will remain an economic bright spot in Holyoke for years ahead as more retail and cultivation operations open. Cannabis companies have leased or bought former mills for large-scale growing and cultivation facilities, pouring millions of dollars to renovate and modernize buildings that date back a century or more.
Projects like Amazon’s Distribution Center in West Holyoke, PeoplesBank’s conversion of the former Yankee Pedlar, Dunkin’ Donuts and Easthampton Savings Bank “spurred some economic growth.”
“Once the budget is balanced, the City Council will decide which tax rate is best for the city,” Dulude said.
Helene Florio, the Holyoke Taxpayers Association president, said she was pleased with the higher home values. However, she was concerned about the $26 million drop in commercial value.
“We keep on hearing from people that have had to close, go out of business, or having problems getting people to come back,” Florio said. She added that businesses have had to adapt in the COVID-19 era to survive.
While Florio welcomed the new revenues, she asked the City Council to remember the sacrifices made by businesses as it sets the tax rate. She favored setting aside any revenue gains.
City Councilor Joseph M. McGiverin said the council has no plans at present to balance the budget.
Dulude expects final budget figures by next week, which should help the council identify financial transfers. “We don’t have ‘free cash’ yet, which drives most of our decisions for financial transfers,” Dulude said.
The state Department of Revenue must certify Holyoke’s free cash amount, a “major hurdle for balancing the budget,” Dulude noted. He added the “rumor” on the projected free cash amount is zero.
McGiverin said only Mayor Alex B. Morse presents the council with a list of financial transfers, appropriations or budget amendments.
“None of that is in front of us. We cannot take a tax class vote at this moment,” McGiverin said. “The state budget is still in the conference committee.”
At one point, the Zoom hearing was hacked by an outside caller who repeatedly made strange sounds, including meowing like a cat.