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Amherst has a unique challenge. It has approximately 40,000 residents but only about half live on taxable property because of the tax-exempt nature of the colleges and University. The Town provides infrastructure, roads, sidewalks, recreational facilities, public safety services and more to all of these residents but does not get an equivalent amount of tax money. This puts more stress on the Town’s operating budget and its taxpayers.
Town officials are advocating to its State Legislators to reevaluate the State’s Payment in Lieu of Tax Program (PILOT) and specifically to examine the impacts of State Owned Land on Amherst.
Town officials continue to seek additional funding sources, such as private donations and tax credit payments related to the Inflation Reduction Act legislation, to further reduce the impact of the debt exclusion.
There are several tax relief and exemption programs in place for the following groups of taxpayers that qualify:
o Legally Blind Individuals
o Surviving Spouses
o Minor Children of Deceased Parents
o Individuals Experiencing a Financial Hardship
For more information on these programs, please visit https://www.amherstma.gov/106/Exemptions
The Town also offers a tax work off program for qualifying seniors. More information on this program can be found here: https://www.amherstma.gov/586/Tax-Work-Off-Plan
The Town has not addressed any of its aging facilities over the past 30 years and several facilities are currently being considered for replacement or renovation. Town officials are working to tackle this challenge now, as delays will result in higher project costs.
The Town’s budget was $90 million in FY23, and it includes several millions of dollars for capital improvements. These funds go towards road repairs, new sidewalks, small facility projects, vehicle replacements, technology equipment, sustainability improvements, etc.
The Town is planning to use funds within the existing budget to repay the money borrowed for renovation of the Jones Library, new Fire Station in South Amherst, and the Public Works facility. It is not anticipated that these projects will require a debt exclusion as the Town intends to fund these projects within the Town’s Levy Limit.
The Town is planning to replace three buildings within the Levy Limit and without any additional taxes from a debt exclusion (library, fire, DPW). The plan has been in place for several years and requires maximizing funds available for capital improvements, operating as efficiently as possible, and building up reserves. One goal of the school building project is to use tax dollars more efficiently by leveraging economies of scale that come from operating two elementary schools rather than three.
These funds generally fall into two buckets: 1) rainy day funds and 2) capital funds. Rainy day funds are needed to protect the Town against economic downturns or unanticipated emergency expenditures. These funds help the Town maintain a strong bond rating which in turn results in a better interest rate when it goes out to borrow funds. Town officials do not advise using any of the rainy day funds.
Town officials are building up capital funds to pay for a new fire station. By using capital funds for the fire station, the Town will not need to borrow money and will save millions in interest costs. If these funds were used for the new elementary school, the new fire station would be delayed unless the funding was handled differently.
UPDATE: On April 3, 2023; the Town Council voted to appropriate $5 million from its Capital Stabilization Fund to reduce the impact of the debt exclusion on tax payers. The Town will seek to replenish this appropriation from the Capital Stabilization Fund by pursuing new federal tax credit payments for energy efficiency improvements at the proposed new elementary school.