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Meeting Opening and Tax Classification Hearing Introduction (Link: 00:00:00 – 00:00:00)
A committee member called the December 2nd meeting to order and announced that the meeting was being recorded. They opened the floor for general public comment, noting that questions or comments specifically about the tax classification hearing would be addressed during that portion of the meeting. After checking for any online public comments and finding none, they closed the public comment period.
The committee member then opened the tax classification hearing and welcomed Todd Laramie, assistant assessor, and John Kelly, Assessor, inviting them to come forward to present. The assessors thanked the committee for having them. One of the assessors mentioned they would share a presentation during their remarks. The committee member jokingly commented about the large crowd in attendance, to which one of the assessors responded with humor about the turnout.
Tax Classification Options Overview (Link: 00:02:00 – 00:05:00)
One of the assessors began presenting from a prepared document that had been distributed to the select board members. He explained that the purpose of the classification hearing was for the select board to determine the allocation of local property tax among four classes of real property and class five personal property for fiscal year 2026. The select board must adopt a residential factor, which determines the percentage of the tax levy applied to each class of real and personal property, with the board of assessors then applying these percentages to the individual classes.
The assessor outlined the first option, the residential exemption, which would allow a reduction in valuation of up to 35% of the average residential valuation for each qualifying residential parcel. He explained that this exemption would lower tax bills for residential properties valued less than the mean valuation while increasing tax bills for properties valued greater than the mean valuation. The assessor noted that this places an additional tax burden on other residences by decreasing the value of owner-occupied properties under the median assessed value and shifting the burden to all properties over the median assessed value, whether owner-occupied or not, including rental properties and vacation homes. Since almost all residential parcels in town are owner-occupied, the board of assessors determined there would be little to no benefit from adopting this exemption and therefore did not recommend it.
The second option discussed was the commercial exemption, which works similarly to the residential exemption by shifting the tax burden within the commercial class from small businesses to larger ones. This exemption allows up to 10% of the value of Class 3 commercial parcels occupied by businesses with more than 10 employees and evaluations of less than one million dollars. The assessor explained that since most businesses in Marblehead are small, there would be little to no tax relief, and the board of assessors did not recommend this option.
The third option was the open space discount, which establishes a class of property for land maintained in an open or natural condition that contributes to public benefit and enjoyment. The assessor clarified that open space does not include land with permanent conservation restrictions or land used to produce income. The board of assessors determined there are no vacant land parcels in Marblehead meeting these criteria, so this would provide no taxpayer relief, and they did not recommend an open space discount.
The final option discussed was the selection of the residential factor, which allows communities to shift tax burden to commercial, industrial, and personal properties to maintain a favored residential share. The assessor explained that a factor of 1 results in a uniform tax rate for all property classes, while any other factor results in a lower residential rate and higher commercial rate. He noted that dual tax structures are typically found in municipalities with significant commercial and industrial property, citing Salem, Beverly, and Lynn as examples. However, only roughly 4% of Marblehead’s total taxable valuation consists of commercial, industrial, and personal property. For this reason, the board of assessors recommended maintaining a single tax rate by voting for a residential factor of 1. A committee member suggested going through the entire presentation before discussing individual items.
Property Valuation Breakdown and Market Analysis (Link: 00:05:00 – 00:17:00)
A committee member suggested going through the presentation and asking questions as they proceeded. Another committee member noted that the recommendations had been consistent over time, with the same recommendations being made year after year. The assessors began walking through the presentation materials, starting with a pie chart showing the property breakdown.
Laramie explained that he had been with the town for just over a year, but looking at the historical data, Marblehead is primarily residential, with roughly 95% of assessed valuations being residential property. This percentage fluctuates slightly but remains consistently high, which is why the board recommends the process they outlined. A committee member confirmed that the $9.4 billion figure was based on this year’s valuations for fiscal year 2026.
Laramie explained that the town had just completed a certification year, which is a five-year revaluation process that every community goes through. In 2024, much of the work involved resetting land and building tables as part of an audit of the assessment system. The state reviews the methodology and examines sales information and values annually, but every fifth year they conduct a deeper dive to ensure adherence to state standards.
The assessors discussed the vigorous real estate market, noting that fiscal year 2026 values are based on calendar year 2024 sales. Laramie observed that the sales market throughout New England had been extremely active but appeared to be mellowing out somewhat. He noted that calendar years 2023, 2024, and 2025 had all seen vigorous sales activity. The industrial class in town is minimal, primarily located in the wharf area and possibly down by the waterfront.
The presentation showed significant growth in property values from 2022 to 2026, rising from $7 billion to almost $10 billion. Laramie noted that values in town had skyrocketed, but this trend was occurring everywhere. The breakdown by property class showed that single families, condos, and apartments in the residential class represented the majority of growth.
A committee member asked about new construction projects, specifically referencing five tear-downs in their area where properties had gone from $700,000 to $3 million, and when these would appear on the tax rolls. Laramie explained that assessments are done as of January 1st, so for fiscal year 2026, they assess what was there on January 1st, 2025. Properties torn down or remodeled after that date wouldn’t be reflected until fiscal year 2027, meaning there could be a year and a half lag time between when construction is completed and when it appears on the tax rolls.
The discussion revealed that new growth had shown a significant drop-off after COVID, with growth numbers averaging between $300,000 and $400,000. Laramie explained that growth is determined by ongoing projects in town, noting that Marblehead differs from larger communities with constant building or massive development projects. Instead, the town sees residential tear-downs where $600,000 houses are rebuilt and sold for much higher amounts, with some reaching $4 million.
Kelly noted that building permits had decreased in number, though the values of individual projects might be larger. He explained that during COVID, there was a huge increase in building permits as people stayed home and built home offices and classrooms, leading to increased new growth across many communities. Current building permit numbers were down, and he anticipated that tariffs on lumber and steel would further suppress construction activity.
The assessors discussed tracking construction projects, with Laramie explaining that they use a percentage complete factor for properties under construction and work with a company called Patriot for growth tracking. He noted that without an assessor in the office the previous year, some projects may not have been properly tracked, and he was working to identify anything that might have fallen through the cracks. The presentation concluded with a note that the median property value in Marblehead was just over one million dollars.
Assessment Methodology and Property Inspection Process (Link: 00:17:00 – 00:28:00)
Laramie explained that determining the exact median property value was challenging because he relied on extracting data from their software system. He noted that while the figure was in the ballpark, he was unsure if it represented the exact middle value. A committee member observed that since the methodology had been applied consistently, it provided a good data point for year-over-year comparisons. Laramie mentioned they would be upgrading their software system, which might provide better tools for extracting this type of information.
A committee member asked about improvements Laramie had made to valuation processes and databases since stepping into his role. Laramie explained that during the five-year certification process, the state required them to publicly display property values for five days to allow transparency and public review. The board had decided to make values public the previous year as well, posting them on the website organized alphabetically by street. This allowed hundreds of residents to review their proposed values and come to the office with questions.
Laramie described his open-door policy, explaining that he met with residents to help them understand the assessment process, methodology, and how values were determined for their individual properties. He noted that being from Marblehead was advantageous because he could easily identify properties and speak knowledgeably about different neighborhoods and their characteristics. This local knowledge helped him explain to homeowners why different neighborhoods were valued differently, even when residents appealed to the appellate tax board.
When asked about assessment methodology, Laramie explained that valuation relied primarily on direct sales comparisons, though cost approach and income approach could also be used depending on the property type. He noted that the cost approach was challenging in the current market due to high material costs, which is why they hired Patriot to assist with cost analysis using current cost manuals. The assessment process involved analyzing sales from comparable style homes and neighborhoods, then checking how well their methodology performed by examining sales that occurred after assessments were completed.
Laramie described his inspection process, explaining that he had visited hundreds of properties during the year for abatement reviews. He noted that the burden was on homeowners to prove assessments were incorrect, and he would prioritize inspections based on the likelihood that adjustments might be warranted. For year-to-year adjustments when not every property was inspected annually, he analyzed sales data to determine if adjustments to base rates or cost per square foot were needed for different property types or neighborhoods.
The state mandates that every property must be inspected at least once every ten years, and Laramie acknowledged they were behind on this requirement. During certification, the state gave them an additional year to catch up on properties that hadn’t been inspected since 2015. He emphasized the importance of detailed record-keeping, encouraging his staff to document visits and reasons for inspections to maintain institutional knowledge.
Laramie estimated he had inspected approximately 500 properties and was working to train his assistant assessor and clerk to help with inspections. He wanted to provide them with skills that could help advance their careers while also building capacity in the office. He noted that Patriot handled building permits, but he needed to provide closer oversight to ensure they were capturing all relevant information. Laramie praised his staff, noting they had learned quickly despite not having prior assessor’s office experience, and he maintained good communication with Patriot since he had previously worked for the company and knew the staff assigned to Marblehead.
Tax Rate Calculations and Impact Analysis (Link: 00:29:00 – 00:37:00)
Kelly praised Laramie’s work as an assessor, and committee members echoed these sentiments, noting how helpful and knowledgeable the assessor’s office had become. Laramie emphasized that explaining the assessment methodology to residents helped them feel more comfortable with the process, noting that while dealing with tax bills was never pleasant, providing the foundation for how assessments were determined showed it was not haphazard but based on sound methodology. A committee member mentioned that before being elected, when people asked about their assessments, they would recommend making an appointment with Laramie, and they had not heard back from anyone with unresolved problems.
The presentation moved to tax rate calculations, with Kelly noting they had two important slides remaining. Laramie presented a chart showing the effects of different residential factors, starting with the proposed factor of one and showing increments of 5% down to demonstrate how this would affect both residential and commercial/industrial/personal property tax rates. A committee member observed that the chart clearly supported the recommendation to maintain a factor of one, noting that even going to a factor of 1.5 would only reduce the residential rate by 20 cents per thousand, saving about $200 per million in valuation, while placing a huge burden on businesses with an increase of almost $4.30 per thousand.
The committee discussed how shifting the tax burden would not change the total tax levy but would redistribute it between property classes. A committee member noted that while they might personally benefit from shifting to commercial properties, it did not make sense given Marblehead’s property composition. They compared this to Salem, which uses a factor of 1.07 and sees significant benefits due to their substantial commercial and industrial property base.
The presentation showed the proposed tax rate of $8.60 per thousand, which represented a considerable decrease from the current rate. Committee members noted that part of this decrease was due to high school debt rolling off, with $28 million coming off the debt service. Kelly explained that the decrease resulted from a combination of increasing property values and the debt reduction, with both factors working in the right direction to lower the rate. A committee member observed that this appeared to be the lowest tax rate they could recall.
The final slide showed the impact on different property types, with calculations based on current factors. Kelly explained that these projections were based on current conditions, but noted that factors affecting these numbers do not all synchronize since classification is set in December while the budget is set in the spring and takes effect in July. The calculations showed relatively modest increases for different property types, with single-family homes seeing an average increase of $74.40.
There was discussion about whether the projections included the annual 2.5% increase and other budget factors that would come into play later in the budget cycle. Committee members noted some confusion about how the calculations worked, given that property values increased while tax rates decreased, resulting in the net changes shown. Laramie explained that the averages were calculated by taking total property values for each class and dividing by the number of parcels. A committee member noted that the presentation provided good information and asked if there were other questions before opening the discussion to public comment.
Public Questions and Discussion (Link: 00:37:00 – 00:47:00)
A resident from 8 West Port Lane asked several questions about the tax classification process. The first question concerned exempted property, and Laramie confirmed this included town-owned property and churches, explaining that everything gets classified under state use codes. The resident then asked about translating the data to median values rather than averages, noting that median might be more accurate or reflective of actual conditions.
Kelly explained that the Department of Revenue uses the mean (average) for reporting purposes, so assessors are trained to report using averages. He noted that using median was more of a local preference to reflect the disparity in property values in different parts of town. A committee member added that the average made the math easier when looking at specific property classes, while another noted that median was useful from a public understanding perspective because it avoided the skew of high-value properties. The resident asked if it was possible to get both statistics, and committee members indicated they would provide additional charts with both figures.
The resident sought clarification about why tax bills were still increasing despite the tax rate dropping to the lowest level anyone could remember. Committee members explained that while the tax rate was decreasing, property values were rising, and the overall levy was increasing by about 2.5 percent as allowed by state law. A committee member noted that the tax rate could sometimes be deceptive for this reason.
When asked how Marblehead’s tax rate compared to other towns, committee members indicated it was lower across the board compared to Swampscott and other comparable communities. They mentioned that Swampscott’s rate was around $11 per thousand and Salem’s was around $13, with Marblehead’s rate among the lowest in the state.
The resident asked about the possibility of raising the tax rate higher to avoid overrides and fund schools and infrastructure improvements. Committee members explained that the town only controls the levy amount, which is capped at 2.5 percent growth plus new growth annually. The tax rate is simply a mathematical calculation of the levy divided by total property values. Kelly clarified that the town makes decisions about the levy up to the 2.5 percent limit, while the housing and commercial markets determine property values.
The discussion turned to new growth, with the resident noting that the chart showed an increase from fiscal year 2025 to 2026. Kelly confirmed the numbers represented actual reported new growth, totaling approximately $287,000 when combining residential and commercial growth. Committee members explained that this figure represented the tax levy from new construction, which translated to roughly $30 million in actual property improvements when divided by the tax rate.
The resident’s final question concerned when residents would see these changes reflected in their tax bills. Laramie explained that actual tax bills go out at the end of December for January 1st, noting that the first two bills of the fiscal year were estimated bills. Kelly confirmed this was for fiscal year 2026, meaning residents would see the lower tax rate reflected in their actual bills. A committee member thanked the assessors for their presentation.
Voting on Tax Classification Measures (Link: 00:47:00 – 00:48:00)
A committee member called for votes on the tax classification measures. The first motion was not to adopt the residential exemption, which was moved, seconded, and passed unanimously. The second motion was not to adopt the small commercial exemption, which was also moved, seconded, and passed unanimously.
Before voting on the third measure, a committee member noted that it was important to clarify that the open space discount does not include properties classified under 61A and 61B, which may be a future discussion topic. The motion not to adopt the open space discount was then moved, seconded, and passed unanimously.
The final motion was to adopt a single rate factor of one, with all parcels to be levied at 100 percent. This motion was moved, seconded, and passed unanimously. A committee member asked if there were any select board announcements and thanked the assessors again for their work and service. The assessors expressed their appreciation for the opportunity to present.
Board Announcements and Meeting Adjournment (Link: 00:48:00 – 00:50:00)
A committee member asked if there were any select board announcements. Another committee member expressed appreciation for the response to comments made at the Board of Health, stating it upset them when town employees were mischaracterized. They noted their support for the leadership response and emphasized the commitment to working with others in context and collaborating with other officials as things that keep children safe.
Another committee member concurred, stating the importance of having debate and a deliberative process, noting that when things are said loosely, it becomes difficult to ensure proper deliberation. A committee member thanked them for their comments and stated they would continue to gather facts, move forward, and protect the town’s youth.
A committee member called for a motion to adjourn, which was moved and seconded. The motion passed unanimously and the meeting was adjourned.
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