Letter: Is Barrington in a tax spiral?

Posted 9/6/19

To the editor:

Real estate taxes in the Town of Barrington are in turmoil.  

The headline of the July 2, 2019 Barrington Times prompted my thoughts, “Town takes new approach on …

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Letter: Is Barrington in a tax spiral?

Posted

To the editor:

Real estate taxes in the Town of Barrington are in turmoil.  

The headline of the July 2, 2019 Barrington Times prompted my thoughts, “Town takes new approach on assessments”. Further,  the commentary from Barrington Town Councilman Jacob Brier in the July 17, 2019 edition of the Barrington Times, “New approach to assessments is legal”.

The problem started a number of years ago when the town saw the selling price of what some term to be “mega-mansions” and soon started assessing and taxing those properties at or near their sale price. The real estate taxes on these mega-mansions range from $20,000 to $100,000 and more. The taxes from the mega-mansions provided a disproportionate amount of taxes. The  high taxes on the mega-mansions resulted in those properties becoming less desirable and difficult to sell. 

The cost of Barrington’s nationally recognized school system consumes significant taxes and the excellence of the school system attracts people to move to the town. That attraction is the result of a bargain. Someone moves to Barrington because of the excellent schools for the education of two children and purchased a home with real estate taxes of $14,000. The Barrington real estate taxes could be $6,000 more than they were paying on the home that they moved from. $6,000 would be an inexpensive cost for the education of two children compared to sending them to a private school when they can obtain the equivalent of a private school education in Barrington.

The lower priced homes in Barrington are selling for people to take advantage of the bargain, while the mega-mansions are either not selling or are selling for less than assessed value. The information in the Barrington Times articles stated that there were approximately 450 assessment increases and approximately 100 assessment decreases under the new assessment policy.

Based on recent information  in the Barrington Times in the East Bay Real Estate section, I tallied 57 residential real estate sales in Barrington.

Ninety one percent of the sales transactions were for sale prices below $800,000, evenly split 26 below $400,000 and 26 between $400,000 and $800,000 and 9 percent over $800,000. A true indication would be to have the assessed values of all of the properties at the time of sale to compare with the actual sale price. However, the data does show that the vast majority of sale transactions are below the category of mega-mansion.

Should my perception be reality, the real questions are to these: 

What happens when the mega-mansions sell at less than assessed value and the new assessed value is reduced resulting in a reduction of the amount of taxes to the town?

If the amount of town taxes starts to decrease, what are the alternatives for the town?

-Cut expenses (unlikely to happen)?

-Increase assessments on those lower priced properties that are in demand?

What happens when the purchase of houses currently perceived as a school bargain are no longer considered a bargain and those houses stop selling above assessed value?

The folklore is that empty-nesters pack up and move, leaving Barrington once the education of their children through the Barrington school system is over. Should this be true, or evenly partially true, a reasonable assumption is that some of the properties that come up for sale are from the empty-nester moves. This raises other questions:

Will there still be purchasers for those properties who still consider the adjusted taxes a bargain?

Will the tables turn where the lower priced properties start selling below assessed values reducing real estate taxes to the town?

Is the Town of Barrington in a tax spiral?

William J. Piccerelli

Barrington

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Scott Pickering has been on the East Bay Newspapers team for more than two decades, since starting as a reporter for the Sakonnet Times. He's been editor of most of the papers, was Managing Editor of all the papers for many years, and became General Manager in 2012. Today he can be found posting to EastBayRI.com, steering news coverage, writing editorials, talking to readers, working with the sales team, collaborating on design, or helping do whatever it takes to get the papers out the door. Reach him at spickering@eastbaynewspapers.com.