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Eversource passes Dell EMC as top taxpayer in town

by | Nov 17, 2021 | Featured: News, News

During the town’s tax classification hearing Tuesday, the Select Board voted to make no changes to the methods the town uses to assign tax rates, and the board was informed that there is a new No. 1 taxpayer in town.

Eversource, which owns the liquefied natural gas (LNG) plant on Wilson Street, vaulted past Dell EMC this year, after being assessed at $191.8 million in real estate and personal property value.

“New growth has been computed to deliver — and this was a big news item for us — $3.4 million in new tax revenue in the new year,” explained Tim O’Leary, the town’s chief financial officer. “That’s much higher than we had budgeted and planned for. And it’s entirely driven by Eversource at Wilson Street and the renewal [of the LNG plant].

“If you recall the budget hearings last year, I came in and said I wanted to spend $70,000 on a court-ready appraisal for the renovation work that was going on at Eversource on Wilson Street, and the board approved it and Town Meeting approved it. We hired that appraiser, and that appraiser squared it under the line with an interim report which allowed us to identify $87 million in new growth value in business personal property at the Eversource facility — 44 percent of all our new growth.”

While this would seem to be a positive development for Hopkinton, O’Leary cautioned that getting Eversource to cut a check continues to be a major challenge.

“Their tax bill is going from about $3 million to about $5 million,” O’Leary said. “So, the good news is that we spent a significant amount of money … to get this assessment and we got information which is allowing us to deliver tax bills that are fair to everyone and that capture the value that was raised at Eversource.

“The bad news is Eversource is our most appeal-prone taxpayer — 93 percent of all the pending litigation we have at the appellate tax board is with Eversource. So it’s not like having the money in hand. So we’re closely evaluating how to adjust the overlay account, because appeals seem very likely. They have been appealing things that are very straightforward. They have been appealing settled matters — that have been settled by court — and exercising their right to re-litigate those matters.”

O’Leary said the plan is to increase the overlay contribution from $500,000 to $1.5 million this year, because of the $2 million jump in Eversource’s tax bill.

“We do not want to be in a position where we book that money as if we’re going to get every penny immediately, spend it, and then have to go to the taxpayers if Eversource wins an appeal of their tax rate,” he said. “So the good news is a lot more tax revenue. The bad news is we’re going to have bank some of it to make sure we can sustain these appeals.”

O’Leary also noted that the Eversource project is in “midstream,” meaning there could be another big valuation jump next year and “probably yet more litigation” to go along with it.

He also said having Eversource as the top taxpayer can be a positive for the town’s bond rating.

“Bond ratings agencies really look at the mobility of your top taxpayers and what their ability is to leave.” O’Leary explained. “And for better or worse, Eversource has a substantial footprint in our town, and it would be difficult for them to pick it up and take it somewhere else. So while we are now facing Eversource as our No. 1 taxpayer, they are also facing us. The bond agencies will like that news, that we have a utility as our large taxpayer that is pretty locked in.”

Other data shared by O’Leary showed that the town’s total valuation is $4.85 billion (83 percent residential, 17 percent business), up 7.7 percent from last year.

The average single-family home value is $681,800, up 3.9 percent from last year. O’Leary said it’s partly from appreciation but also because new construction tends to be more expensive than the average.

“It’s like adding tall kids to a basketball team and then measuring the average height,” he said. “So the average has gone up from value and because we’re adding on the high end of the spectrum here.”

The proposed tax rate for Fiscal Year 2022 is expected to be $17.03, down from $17.08.

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