Last week we reported that the Eastham Select Board had voted again, three to two, not to adopt the residential tax exemption (RTE), the option that enables a town to offer property tax relief to homeowners whose primary residence is in that town. One effect of the RTE is to marginally shift some of the tax burden away from full-time residents onto part-time residents. Provincetown, Truro, and Wellfleet all have adopted it; Eastham has not. (In a surprising development reported on this week’s front page, Eastham Select Board chair Aimee Eckman changed her mind after her vote last week and said she will support the RTE when it comes up for a vote in August.)
Another effect of the RTE is to give some part-timers the feeling that it’s not fair because some people who qualify for it don’t need the money.
I sympathize with the emotion but not with the logic. First, lots of taxes are “unfair” in the sense that they are imposed regardless of ability to pay, sales taxes, payroll taxes, and property taxes among them. The law bases property taxes entirely on assessed value — not the ability of the owner to pay the bill. The RTE gives towns a way to mitigate that unfairness. The fact is that, in general, people who live here all or most of the year have significantly less income than part-time residents.
The second problem with the fairness objection, and one that almost never comes up in discussions of the policy, is that the RTE is designed to be progressive. The full explanation involves some math (see page A11), but here’s the bottom line: the higher the assessed value of the property, the smaller the discount you get on your tax bill. Above a certain value (Assistant Town Manager Rich Bienvenue says it would be $1.88 million in Eastham) the RTE would actually increase a year-rounder’s taxes.
Third, taxpayers have to apply for the RTE, and not everyone who qualifies does so. In Provincetown, the assessor estimates that 20 percent of year-round residents forgo the discount. That means there’s more money available for those who do need it.
At last week’s meeting in Eastham, select board member Robert Bruns brought up an objection to the RTE that would seem to apply to taxes of any kind. “I don’t ethically get on board with pulling money from one group to give it to another,” he said.
The other argument against the RTE is that it “sows division” between year-round and part-time residents. That’s how Tom McNamara, president of the Eastham Part-time Resident Taxpayers Association, sees it. He said that part-time residents “are full-time residents of this community. We may not live here full-time, but we participate year-round.”
It’s understandable, perhaps, that some would feel slighted by a policy that makes them pay a few hundred dollars more in taxes on their vacation homes. I’m worried enough about the demographics here that I see it differently: we appreciate part-timers so much that we want you here with us all year long, and we’ll even give you a bonus if you do it.
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