It’s the Economy

By Mickey Friedman
September 30, 2015

I’m not an economist. And never played one on TV. And most of the time I have no idea what they’re saying.

But there’s been a lot of talk recently in Great Barrington about tax rates so I’ve begun to pay attention. Michael Wise, the chairman of the Great Barrington Finance Committee, came up with a proposal to tackle the growing problem of affordability and high taxes. His ultimately unsuccessful answer was to create greater tax equity with a residential tax exemption and a split rate. To shift some of the tax burden to part-time residents and those with higher property assessments.

But as some of us learned at the public hearing, trying to create affordability and equity using the tax assessments of residential and commercial properties isn’t as effective as it first seems. Because there are several reasons why people can’t really afford the nominally expensive houses they own, and can’t really afford to pay rising real estate taxes.

Some have lost jobs, lost husbands or wives; some bought their houses many years for very little then watched as their assessed value has surged while their income hasn’t. Some have spent great amounts of money making their houses worth more. And renters – who struggle more than most with finding affordable housing – would face increased rents with these changes. Because as the owners of rental properties said time and again, they wouldn’t hesitate to pass on any raise in taxes to their renters.

To understand why life is becoming increasingly challenging here, it pays to look at our economy. Some facts from the 2013 Great Barrington Master Plan: “Since 1990 … Great Barrington’s population has been declining … faster than either South County or Berkshire County as a whole … between 2000 and 2010 – there were 409 fewer people, a decline of 5.5 percent.

“Great Barrington’s median age is older than nearly every other place except Cape Cod … Over 13 percent of all Great Barrington households are non-family households with a person age 65 years or over living alone. Overall, 30 percent of households contained individuals age 65 years and over … markedly higher than the state or nation …

“… there are fewer young people in Great Barrington … The number of school age children has been decreasing over the last decade.”

As for work: “A majority of Great Barrington residents, 52%, are employed in service, sales, and office occupations. Another 37% are employed in management, business, science and arts occupations …

“While sectors like retail trade and accommodation and food services employ the most people, they pay some of the lowest wages … the average reported weekly wage in these sectors was $509 and $330, respectively.

“In Great Barrington, 10.8% of workers are self-employed … This percentage is one-third higher than for the state (6.2%) and the nation (6.3%).

“This high percentage of self-employed is likely a reflection of recent economic hard times, and also of the fact that many self-employed earn only modest livings in locally prominent jobs like childcare, house cleaning, and construction. It may also be because in today’s economy firms are less willing to hire full time employees to which they must provide benefits.”

Income varies depending on where you live in Great Barrington. “According to Census estimates, the median household income of Great Barrington is $52,800. This is higher than Berkshire County’s median household income of $48,900. The estimated median household income in the Great Barrington CDP (central neighborhood area) is $43,000, or 19 percent lower than the town as a whole. In Housatonic CDP household median income is estimated at $29,000, 41 percent lower than the town estimate.”

And now the kicker for our homeowners and property-tax payers: “Most (75 percent) of Great Barrington’s local revenue is from the property tax, and most of that property tax revenue is from residential parcels. Residential land use is the single largest component of our tax base, providing over 80 percent of the town’s property tax revenue …”

As Michael Wise noted: “Taxes in Great Barrington are among the highest in Berkshire County. The average household tax bill here in FY2015 was $5,138. Only Williamstown’s $5,552 was higher.”

Taxes go up and up while income … Well that’s the problem. Because somehow while family income in Great Barrington is average or below average for Berkshire County, our taxes are second only to ritzy Williamstown.

It doesn’t take an economist to know we need answers that will make a practical difference. Some ideas: turn our next unused town building into a business incubator. Invest in new businesses to create more and better paying jobs. Negotiate a more equitable way to finance our regional school system. Invest in town-owned, high-speed, fiber-optic Internet access like Alford is doing. Build more affordable housing. And the obvious, politically difficult solution: Spend less.

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This piece was published first on September 10, 2015 in The Berkshire Record.

2013 Great Barrington Master Plan, Appendix, pp. 2, 4, 7, 8 available for download at:
http://www.townofgb.org/pages/index